Limitations on the Use of Transaction Value Method
Memorandum D13-4-4

Ottawa, July 17, 2013

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In Brief

  • This memorandum has been revised to include a link to the amended paragraph 48(1)(c) of the Customs Act effected June 11, 2009. No policy or procedural amendments are included herein.

Limitations on the Use of Transaction Value Method

This memorandum outlines and explains the circumstances under which the transaction value of imported goods may not be accepted as the value for duty of those goods.


Section 48 of the Customs Act


1. Paragraphs 48(1)(a) to (d) describe four sets of circumstances that, if they occur, may preclude accepting transaction value as the value for duty of imported goods.

Restrictions (Paragraph 48(1)(a) of the Customs Act)

2. A restriction on the disposition or use of the imported goods would preclude determination of the value for duty under section 48.

3. Certain types of restrictions, described in subparagraphs 48(1)(a)(i) to (iii) may, however, be disregarded when determining whether the sale of the imported goods is subject to a restriction.

Conditions or Considerations (Paragraph 48(1)(b) of the Customs Act)

4. A condition or consideration, for purposes of establishing a value for duty, refers to an obligation undertaken by the purchaser or the vendor of the goods in connection with the sale or the price paid or payable for the imported goods.

5. The existence of a condition or consideration for which a value cannot be determined in respect of the goods will preclude accepting a transaction value as the value for duty of the goods to which it relates. For example, the purchase price of a new vehicle is reduced by an amount ascribed by the vendor to a trade-in vehicle. The amount ascribed to the trade-in is a notional value established by the vendor and may vary from one vendor to another. It cannot be considered in establishing the value for duty of the imported vehicle.

6. There are two types of conditions or considerations that are exempted from the above described treatment:

Subsequent Proceeds (Paragraph 48(1)(c) of the Customs Act)

7. If the value of any part of the proceeds of any subsequent resale, disposal or use of the goods cannot be determined and added to the price paid or payable for the goods under paragraph 48(5)(a), then a value for duty for those goods cannot be determined under the transaction value method. For additional information refer to Memorandum D13-4-7, Adjustments to the Price Paid or Payable and Memorandum D13-4-13, Post-importation Payments or Fees (Subsequent Proceeds).

Related-Party Transactions (Paragraph 48(1)(d) of the Customs Act)

8. If the purchaser and the vendor are related persons and the relationship has influenced the price paid or payable of the imported goods, then the value for duty cannot be established under Section 48. For additional information refer to Memorandum D13-4-5, Transaction Value Method for Related Persons.

Additional Information

9. For more information, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time/except holidays). TTY is also available within Canada: 1-866-335-3237.


Issuing office:
Trade Programs Directorate
Headquarters file:
Legislative references:
Customs Act
Other references:
D13-4-5, D13-4-7, D13-4-13
Superseded memorandum D:
D13-4-4, June 1, 1986
Date modified: