Which statement best describes the transaction value method used in customs valuation?

• A. It relies on the buyer's stated price, with no adjustments.
• B. The customs value is based on the price actually paid or payable for the goods, with allowable adjustments.
• C. It is determined by the average market price in the exporting country.
• D. It uses the declared value based on quantity alone.

Answer: (B)

Transaction value is determined by the price actually paid or payable for the goods when sold for export to the country of importation, with allowable adjustments. This means you start with the buyer’s price for the goods and then add or subtract specific items that are considered part of the price or necessary to complete the sale, such as packing costs, selling commissions, royalties or license fees, and the value of any assists or related services or goods supplied by the seller. These adjustments ensure the value reflects the true economic cost of the imported goods, rather than just the sticker price. Costs like freight, insurance, and other charges incurred to bring the goods to the port of importation are typically addressed under other valuation methods, not as part of the transaction value itself.