Introduction
Importers in Türkiye may encounter a practical difficulty when the invoice price of imported goods is lower than the unit value specified in an import surveillance communiqué. In such cases, the importer is normally required to present a surveillance certificate. Where no certificate is available, importers often declare an additional amount—usually under the “other foreign expenses” field—in order to bring the customs value up to the surveillance threshold and secure the release of the goods.
This practice increases the basis on which customs duties and import VAT are calculated, even though the additional amount may not reflect the price paid to the foreign seller or any other actual cost of the transaction.
The resulting disputes concern the relationship between two separate legal mechanisms: import surveillance and customs valuation. A decision of the Turkish Tax Litigation Chambers Board of the Council of State (Vergi Dava Daireleri Kurulu, “VDDK”) dated 24 January 2024 has clarified that a surveillance value cannot replace the declared transaction value unless the customs administration first examines that value and establishes a lawful basis for rejecting it.
1. Customs valuation under Turkish law
The customs value of imported goods is determined under Articles 23 to 31 of Customs Law No. 4458 and the relevant provisions of the Customs Regulation. These provisions are based on the WTO Agreement on Implementation of Article VII of GATT 1994, commonly known as the WTO Customs Valuation Agreement.
The system gives priority to the commercial value of the individual import transaction. Under Article 24 of Customs Law No. 4458, the primary method is the transaction value: the price actually paid or payable for goods sold for export to Türkiye, adjusted where required under Articles 27 and 28.
The transaction value method applies where the statutory conditions are met. In particular, there must be no disqualifying restrictions on the buyer’s use of the goods; the sale or price must not depend on conditions whose value cannot be determined; and any relationship between the buyer and seller must not have influenced the price.
If the customs value cannot be determined under the transaction value method, Article 25 provides for four alternative methods to be applied successively:
- the transaction value of identical goods,
- the transaction value of similar goods,
- the deductive value method and
- the computed value method.
The order of the deductive and computed value methods may be reversed at the importer’s request. If the customs value still cannot be determined under Articles 24 and 25, Article 26 permits its determination through reasonable means consistent with the principles and general provisions of the WTO Customs Valuation Agreement, Article VII of GATT and the valuation provisions of the Customs Law, using data available in Türkiye. This is commonly referred to as the fall-back method.
Apart from this limited exception, the order is mandatory. The customs administration cannot move directly to a market price, a surveillance value or another reference figure without first establishing why the preceding valuation method is unavailable.
The administration may question a declared value and request further evidence where it has reasonable doubts about its truth or accuracy. A price below values observed in comparable transactions may justify such an examination. It does not, on its own, establish that the invoice price is false. If the administration decides to reject the transaction value, it must identify concrete reasons and continue through the remaining valuation methods must be applied in the order prescribed by the Customs Law..
The Ministry of Trade has adopted the same general approach in its guidance on customs valuation. In particular, it has indicated that a low price alone is not sufficient to bypass the transaction value method and that the reasons for moving from one valuation method to another must be explained. Turkish Ministry of Trade – Administrative Guidance on Customs Valuation
2. Import surveillance and surveillance values
Import surveillance is a trade-policy measure governed by the Council of Ministers Decision on Import Surveillance No. 2004/7304 and its implementing regulation. Product-specific communiqués determine which goods are subject to surveillance and set out the applicable unit values and documentary requirements.
The purpose of surveillance is to monitor developments in the importation of particular goods, including import volumes, import conditions and their effects on domestic producers. Under Article 4 of Decision No. 2004/7304, prospective surveillance is implemented by requiring a surveillance certificate in addition to the documents otherwise required under customs legislation. Decision on Import Surveillance No. 2004/7304
The value specified in a surveillance communiqué is therefore a threshold for applying a trade-policy requirement. It is not a customs valuation method and does not constitute conclusive evidence of the commercial value of the goods.
This distinction is important. The term “reference price” is sometimes used broadly for indicative values employed in customs practice. In the context of Turkish import surveillance, however, “surveillance value” is a more precise term. It refers to the unit value below which a surveillance certificate is required. It does not create a statutory minimum import price or directly impose an additional customs duty.
A transaction below the surveillance value may attract examination, but the customs value must still be determined under Customs Law No. 4458. The surveillance threshold cannot be treated as the taxable value merely because the actual purchase price falls below it.
3. Additional value declared as “other foreign expenses”
Where the invoice price is below the surveillance threshold, an importer without a surveillance certificate may increase the declared value to that threshold. In practice, the difference has often been entered in the customs declaration as “other foreign expenses.”
The name given to an amount in the declaration does not determine whether it legally forms part of the customs value. Under Article 27 of Customs Law No. 4458, certain identifiable elements may be added to the price actually paid or payable. These include, subject to the statutory conditions, specified commissions and brokerage costs, packing costs, assists supplied by the buyer, certain royalties and licence fees, proceeds accruing to the seller, and transport, insurance and related expenses up to the place of entry into Türkiye.
By contrast, the difference between the invoice price and the surveillance value may not correspond to any payment made or payable to the seller. Nor may it represent freight, insurance, commission, royalty or another cost actually incurred in connection with the imported goods. It may have been declared solely to avoid the documentary requirement arising from the surveillance measure.
If this is the case, entering the difference as “other foreign expenses” does not convert it into a genuine component of customs value. Treating it as such would allow the surveillance threshold to operate indirectly as a minimum customs value, without examining the transaction value under the Customs Law.
This conclusion does not mean that every amount entered under the same declaration field must be excluded. If an amount represents an actual cost or payment that falls within the valuation rules, it may properly be added. The decisive question is the true nature of the amount, not the field in which it appears.
4. Declaration under reservation and available remedies
An importer that increases the declared value solely because of a surveillance measure may record a reservation—an ihtirazi kayıt—stating that the invoice price represents the genuine transaction value and that the additional amount is disputed.
Such a reservation may help demonstrate that the importer did not accept the additional amount as part of the actual customs value. It may also identify the portion of the resulting customs duties and import VAT that is being challenged.
A reservation does not, however, automatically invalidate the assessment or create an unconditional right to reimbursement. Nor does it replace the administrative objection procedure. Its legal significance depends on the content and timing of the reservation, the nature of the assessment and the evidence supporting the declared transaction value.
The distinction between qualified and unqualified declarations is nevertheless material. Where the importer voluntarily increases the value without recording any reservation, the administration may argue that the assessment is based on the importer’s own declaration rather than an adverse adjustment made by the customs authority. Turkish judicial decisions have therefore treated declarations made under reservation differently from those made without reservation.
Under Article 242 of Customs Law No. 4458, customs duties, penalties and administrative decisions may be challenged by filing an objection with the superior customs authority or, where no superior authority exists, with the authority that issued the decision. The objection must generally be filed within 15 days of notification.
If the objection is rejected, an action may be brought before the competent tax court. In surveillance-related valuation cases, the importer will typically seek annulment of the decision rejecting the objection and repayment of the customs duties and import VAT collected on the additional amount. Compliance with the administrative objection procedure is a prerequisite for judicial review. Turkish Ministry of Trade guidance on Article 242 objections
The importer will generally need to show that:
- the invoice price was the genuine price paid or payable;
- the additional amount did not represent an actual payment or a legally permissible adjustment;
- the increase was made under reservation because of the surveillance requirement; and
- the objection and subsequent court action were brought within the applicable time limits.
The administration, for its part, may reject the transaction value where it has concrete evidence that the declared price is unreliable or that the statutory conditions for applying the transaction value method are absent. In that event, it must determine the customs value by applying the subsequent methods in the order laid down by law.
5. The VDDK decision of 24 January 2024
Before 2024, regional administrative court chambers had taken differing approaches to cases in which importers declared an additional amount under reservation to reach a surveillance value.
One approach regarded the increased customs value as a consequence of the importer’s own declaration. Since the importer had chosen to increase the value instead of presenting a surveillance certificate, the resulting assessment was considered lawful.
The competing approach focused on the mandatory customs valuation rules. According to this view, an amount declared solely to meet a surveillance threshold could not replace the actual transaction value unless the customs administration first examined and lawfully rejected that value.
The conflict was referred to the VDDK under the statutory procedure for resolving inconsistencies between final decisions of regional administrative court chambers. The VDDK’s ruling was therefore not an ordinary appellate decision confined to one importer’s case; it was intended to eliminate a divergence in the regional case law.
In its decision dated 24 January 2024, File No. E.2023/6 and Decision No. K.2024/1, the VDDK adopted the second approach. The decision was published in the Official Gazette on 26 March 2024. Council of State, VDDK Decision Bulletin No. 16
The Board held that the transaction value must be considered first when determining the customs value of imported goods. Only where the conditions for applying that method are found not to exist may the administration proceed to the other methods in their prescribed order. The reasons for abandoning the transaction value must be demonstrated concretely.
The decision does not mean that customs authorities must accept every declared price that falls below the surveillance value. They may examine the invoice price and request documents showing that it is the price actually paid or payable. If the available evidence gives the authorities legally sufficient reasons to reject the transaction value, the customs value may be determined by applying the alternative methods prescribed by Customs Law No. 4458 in the required order.
However, the fact that the declared price is lower than the surveillance value is not, by itself, sufficient to reject the transaction value. Nor may the surveillance value automatically be used as the customs value. Before departing from the transaction value method, the customs administration must examine the individual transaction and state the concrete reasons why that method cannot be applied.
The same reasoning applies to the amount entered as “other foreign expenses.” Its appearance in the declaration does not make it an actual foreign expense if it was included only to bring the declared value up to the surveillance threshold.
6. Scope of the decision and practical implications
The VDDK decision strengthens the position of importers that increased the declared value under reservation. It does not establish an automatic right to recover all taxes paid in connection with surveillance measures.
Each case must still be assessed on its own facts. The outcome may depend on whether a sufficiently clear reservation was recorded, whether the commercial documents support the invoice price, whether the administrative and judicial time limits were observed and whether the administration made concrete findings that justified rejecting the transaction value.
The decision also does not invalidate the surveillance measure itself or remove the obligation to obtain a surveillance certificate. It concerns the determination of customs value and the legality of treating the additional amount as part of that value.
Foreign exporters should therefore retain documentation explaining the commercial basis of prices that fall below Turkish surveillance values. Sales contracts, purchase orders, payment records, price lists and correspondence may later be relevant to a customs valuation dispute. Where a comparatively low price results from quantity discounts, product specifications, long-term supply arrangements, seasonal conditions or similar commercial factors, those circumstances should be documented consistently.
Turkish importers should examine the applicable surveillance rules before filing the customs declaration. They should determine whether the goods fall within the relevant tariff classification, whether the declared unit value is below the surveillance threshold and whether a surveillance certificate will be required. If an additional amount is to be declared, its legal and financial consequences—and the possible need for an express reservation—should be considered before customs clearance.
For foreign counsel and businesses trading with Türkiye, the central point is that surveillance and valuation must be kept legally separate. A surveillance value may trigger a certificate requirement and closer examination, but it cannot replace the transaction-specific valuation methods prescribed by the Customs Law.
Conclusion
Turkish customs law requires the customs value of imported goods to be determined primarily on the basis of the transaction value. That method may be rejected only on legally recognised grounds supported by concrete findings, after which the remaining valuation methods must be applied in their statutory order.
Import surveillance serves a different purpose. The value specified in a surveillance communiqué determines whether a surveillance certificate is required; it is not, by itself, the customs value of the goods.
The VDDK’s decision of 24 January 2024 confirms this distinction. Where an importer has increased the declared value under reservation to reach a surveillance threshold, the customs administration must still examine the actual transaction value and explain any decision to reject it. An amount declared as “other foreign expenses” cannot be treated as a genuine component of customs value merely because it appears in the declaration.
The decision does not guarantee reimbursement in every case. It does, however, confirm an important limit on the practical operation of surveillance measures: they cannot be used as a substitute for the customs valuation analysis required by law.
This article is intended for general information only and does not constitute legal advice. The applicable rules and remedies should be assessed in light of the facts of each transaction.