On 18 October 2022, the MoF issued regulation No. 144/PMK.04/2022 (“PMK-144”) concerning Customs Values for Import Duty Calculation, which revokes the previous regulation, i.e. MoF regulation No. 160/PMK.04/2010 as most recently amended by No. 62/PMK.04/2018. The objective of the changes is to provide more legal certainty in the framework of determining customs value, improve services and supervision in the customs sector, and maximize the utilization of information technology systems in business processes in the customs sector.

The major changes in this new regulation are as follows:

1. Transaction Value (Method I)
   • The new regulation provides greater clarity on the Insurance as part of the Transaction Value by mentioning “Insurance Costs for the transportation of imported goods to the destination port of import in the Customs Territory,” while previously it only mentioned “Insurance Cost”;
   • There is an additional cost that should be added into the price actually paid or the price that should be paid (transaction value), i.e. guarantee fee as a condition of sales; and
   • There is an additional cost that should not be included in the price actually paid or the price that should be paid (transaction value or Method I), i.e., Internal tax costs in the exporting country.
2. Transaction Value of Identical Goods (Method II) and Similar Goods (Method III)
   • The transaction value of identical goods and/or similar goods used as the basis for determining customs value should fulfill additional requirement, i.e. using the same mode of transportation;
   • There is an additional exception for Import Declaration (PIB) fulfillment criteria, i.e. not filed by the same Importer, except Importers who have been designated as the Customs’ Main Partner (MITA Customs) or Authorized Economic Operator (AEO); and
   • There is clarity regarding PIB that can be used as a comparison of identical and/or similar goods, i.e. it now can use a PIB registered at another Customs Office.
3. Fallback Method
   • The Fallback Method may use data from Outside the Customs Territory, provided that the data is available within the Customs Territory and is based on objective and measured data.
4. New Procedures for Customs Value Declaration
   • Previously, the importer was required to submit a Customs Value Declaration if there is a customs value information (inquiry) issued by the Customs Office (after the registration of PIB). Under the new regulation, it is stipulated that the Importer or the owner of Goods shall voluntarily declare the Customs Value in the PIB; and
   • The Customs Office will conduct risk assessment on the Customs Value declared by the importer.
5. Customs Value Examination
   The Customs Officer examines the Declared Customs Value in the Import Declaration, and based on Risk Assessment result, the Customs Officer may:
   • Issue a request for data and/or documents in the case of requiring additional actual proofs or objective and measured data;
   • Issue a Customs Value Confirmation; and
   • Access information related to import transaction, financial information etc. by using data or application in the Directorate General of Customs and Excise or relevant department.The Importer and/or the Owner of Goods must submit the additional actual proofs or objective and measured data within 3 (three) working days since the data and/or document request is issued. The Importer and/or the Owner of Goods must attend the Customs Value Confirmation within 3 (three) working days since the Customs Value Confirmation is issued. If the Importer and/or the Owner of Goods does not submit the additional actual proofs or objective and measured data or attend the Customs Value Confirmation within 3 (three) working days, the Customs Officer will use all information available in the Directorate General of Customs and Excise or relevant department for the Customs Value examination.
6. Customs Value Stipulation by the Customs OfficerThe Customs Officer determines Customs Value based on:
   • Risk Assessment result,
   • Customs Value examination;
   • Request for data and/or documents for additional actual proofs or objective and measured data;
   • Customs Value Confirmation result; and/or
   • Other customs value examination result.

The new regulation will be effective starting 1 January 2023.

Considering the fundamental changes in the approach of Customs Value determination, it is highly suggestible for you to revisit the internal procedure of import administration, as there may be components which should be reconsidered further in determining the Customs Value. Our customs team would be more than happy to assist you in this regard.