Customs Suspects an Artificially Low Import Price: How Can Foreign Companies Defend the Transaction? — 2026 Current Guide

How can foreign companies defend a low import price challenged by Turkish Customs? Learn the required evidence, customs valuation methods, related-party risks, penalties and appeal options in 2026.

A low import price does not automatically mean that the importer under-declared the customs value. International transactions may legitimately involve volume discounts, promotional pricing, distressed inventory, new-market strategies, seasonal reductions, product defects or special contractual terms.

Nevertheless, Turkish Customs may investigate an invoice that appears significantly below comparable transactions or historical prices. The importer and foreign supplier must then demonstrate that the price is genuine, commercially justified and properly recorded.

If the explanation is not accepted, Customs may reject the transaction value, apply an alternative valuation method and assess additional customs duty, import VAT, interest and penalties.

What Is an Artificially Low Import Price?

An artificially low import price is a price that Customs believes does not reflect the actual amount paid or payable for the imported goods.

Customs may suspect artificial pricing where:

• The invoice price is far below comparable imports;
• The price differs from the supplier’s normal price list;
• Bank payments exceed the invoice amount;
• A third party pays part of the price;
• Discounts are undocumented;
• Credit notes are issued after clearance;
• Royalties or commissions are omitted;
• The importer and supplier are related;
• The goods are resold at a much higher price;
• The declared value is inconsistent with accounting records.

A low price can still be lawful. The issue is whether it is supported by objective, quantifiable and contemporaneous evidence.

Transaction Value Is the Primary Method

The first question is whether the transaction value can be accepted. This generally means the price actually paid or payable for goods sold for export to Turkey, subject to legally required additions.

The Turkish Ministry of Trade explains the transaction-value method and the sequence of alternative valuation methods in its official customs valuation guidance.

The importer should explain why:

• The sale was genuine;
• The parties agreed the price before shipment;
• The buyer was required to pay only the declared amount;
• No hidden side payment existed;
• Any relationship between the parties did not influence the price;
• All required additions were included.

Customs should not replace a genuine transaction value merely because it appears commercially unusual.

Legitimate Reasons for a Low Import Price

Foreign companies may defend a low price by documenting:

• Large-volume purchases;
• Long-term customer discounts;
• Promotional or introductory pricing;
• Seasonal clearance;
• Excess or obsolete inventory;
• Goods with cosmetic defects;
• Short remaining shelf life;
• Customer-specific specifications;
• Regional market differences;
• Different warranty coverage;
• Ex-works rather than delivered pricing;
• Prepayment or financing arrangements;
• An exclusive-distributor discount;
• A distressed sale;
• A product launch strategy;
• Currency or market volatility.

The explanation should be supported by documents created before or at the time of the transaction. A justification prepared only after Customs begins an investigation may receive less weight.

Evidence That Can Prove the Commercial Price

A foreign company should prepare a transaction-value evidence file containing:

• Sales contract;
• Purchase order;
• Order confirmation;
• Original invoice;
• Price list;
• Discount policy;
• Promotional campaign records;
• Bank statements;
• SWIFT confirmations;
• Letter of credit;
• Supplier account statement;
• Credit and debit notes;
• Accounting entries;
• E-invoice and ERP records;
• Freight and insurance invoices;
• Product specifications;
• Quality or defect reports;
• Market quotations;
• Comparable customer sales;
• Transfer-pricing documentation;
• Royalty and licence agreements;
• Commission arrangements.

A written reconciliation should connect the invoice, payment, customs declaration and accounting entry for every shipment under review.

Bank Payments and Price Reconciliation

Bank records are often decisive. Customs may compare:

• The amount invoiced;
• The amount transferred;
• The paying entity;
• The receiving entity;
• Payment dates;
• Currency;
• Advance payments;
• Instalments;
• Set-off arrangements;
• Third-party payments.

A difference between invoice and bank transfer does not automatically prove undervaluation. It may result from bank charges, multiple invoices, deposits, freight payments, credit notes or currency conversion.

The company should prepare a clear payment reconciliation explaining every difference. If a parent company or group entity paid the supplier, the legal and accounting basis should be documented.

Related-Party Pricing

A low price in a related-party transaction attracts greater scrutiny, but related-party status does not automatically invalidate the transaction value.

The importer should provide:

• Group-structure documents;
• Shareholding information;
• Intercompany agreements;
• Transfer-pricing reports;
• Comparable uncontrolled prices;
• Resale-price analysis;
• Cost-plus analysis;
• Profit-margin information;
• Year-end adjustment records;
• Board or management approvals;
• Evidence of commercial negotiations.

The defence should show that the price was determined under commercial conditions and that the relationship did not influence the amount declared to Customs.

Transfer-pricing and customs valuation analyses should be coordinated. However, they are separate legal assessments. A price accepted for income-tax purposes may still require a specific customs explanation.

Customs Additions That May Increase the Value

Even where the invoice price is genuine, Customs may ask whether legally required additions were omitted.

Potential additions may include:

• Commissions and brokerage, except buying commissions;
• Container costs;
• Packing costs;
• Free-of-charge materials or components;
• Tools, moulds and production equipment;
• Engineering and design work;
• Royalties and licence fees that are a condition of sale;
• Resale proceeds payable to the seller;
• Transport and insurance costs up to the Turkish entry point.

These additions must be based on objective and quantifiable data. The importer should analyse each item separately rather than accepting an unexplained adjustment.

Costs that may be excluded when separately identified can include post-import transport, certain post-importation assembly, qualifying financing interest, buying commissions and import taxes.

Comparable Prices and Reference Values

Customs may compare the declared price with:

• Identical goods;
• Similar goods;
• The supplier’s sales to other customers;
• Historical imports;
• Published price lists;
• Market data;
• Reference values;
• Customs databases.

A comparison is meaningful only if differences in quantity, quality, model, delivery term, warranty, origin, date and market are taken into account.

The importer may challenge a comparison based on goods that are not commercially comparable. A reference value should not automatically replace a genuine transaction price without a legally sufficient valuation analysis.

Alternative Valuation Methods

If Customs rejects the transaction value, it may consider:

1. The transaction value of identical goods;
2. The transaction value of similar goods;
3. The deductive value method;
4. The computed value method;
5. The fallback method.

The importer should request a detailed explanation of the method used and the adjustments made. The authority should identify the comparable goods, data sources and calculation steps.

A decision that simply states that the price is “too low” may be challenged if it does not adequately explain why the transaction-value method was unavailable.

Post-Clearance Customs Investigation

A low-price investigation may begin after the goods have already been released. Customs may review:

• Several import declarations;
• Multiple suppliers;
• Group-company transactions;
• Historical discounts;
• Transfer-pricing adjustments;
• Royalty payments;
• Payment records;
• Resale data.

Under the general framework of Customs Law No. 4458, under-assessed customs duties may generally be notified within three years from the date the customs debt arose, subject to statutory exceptions.

The importer should preserve all relevant documents and review the declarations covered by the audit. It should not provide unrelated historical data without understanding the legal scope of the request.

Financial and Penalty Risks

If Customs concludes that the declared price was artificially low, the importer may face:

• Additional customs duty;
• Import VAT on the revised customs base;
• Additional customs duties;
• Anti-dumping or safeguard duties;
• Interest;
• Administrative customs penalties;
• Storage and demurrage costs;
• Contractual claims from business partners.

A formal accounting error may be treated differently from an intentional false declaration. If Customs suspects fabricated invoices, hidden payments or deliberate duty evasion, further administrative or criminal investigation may be considered.

A low price alone does not automatically establish fraud or criminal intent.

How Should Foreign Companies Respond?

A foreign company should:

1. Verify the authenticity and scope of the Customs request.
2. Identify every shipment and invoice covered.
3. Record the response deadline.
4. Preserve original electronic and paper records.
5. Prepare a transaction-by-transaction reconciliation.
6. Explain discounts and commercial conditions.
7. Provide supplier and bank confirmations.
8. Analyse related-party pricing.
9. Separate freight, royalty and post-import costs.
10. Challenge unsupported comparisons.
11. Coordinate its response with the Turkish importer.
12. Obtain Turkish customs-law advice before making admissions.

The response should be factual, consistent and supported by contemporaneous records. Documents should never be backdated, altered or created solely for the investigation.

Challenging a Customs Valuation Decision

The importer may challenge:

• Rejection of the transaction value;
• The use of reference prices;
• Selection of comparable goods;
• Incorrect inclusion of royalties or commissions;
• Incorrect freight calculation;
• Failure to consider discounts;
• Related-party conclusions;
• Import VAT;
• Penalty calculation;
• Notification or limitation defects.

Under Article 242 of Customs Law No. 4458, an objection is generally filed within 15 days from lawful notification of the customs decision.

If the objection is rejected, proceedings may be brought before the competent tax court within the applicable procedural period. A lawsuit does not automatically suspend collection. A separate suspension-of-execution request may be necessary where immediate payment would cause serious and difficult-to-repair harm.

Settlement may be available for certain customs debts and penalties. The importer should compare settlement with litigation and contractual recovery from the supplier.

2026 Compliance Priorities

In 2026, Turkish Customs increasingly compares declared prices with:

• E-invoices;
• E-ledgers;
• ERP data;
• Bank records;
• Freight platforms;
• Transfer-pricing reports;
• Resale data;
• Supplier databases;
• Previous customs declarations.

Foreign companies should maintain a permanent customs valuation policy, document discount structures before shipment and ensure that finance, sales, procurement and customs teams use consistent information.

Frequently Asked Questions (FAQ)

1. Is a low import price automatically illegal in Turkey?

No. A low price may be lawful if it is commercially justified and supported by objective evidence.

2. Can Turkish Customs reject an invoice without proving fraud?

Yes. Customs may reject the transaction value without a criminal finding, but it should provide a legally sufficient valuation reason.

3. What is the strongest evidence of the actual price?

Contracts, purchase orders, bank records, supplier confirmations, accounting entries and a clear payment reconciliation are usually important.

4. Can promotional discounts be accepted?

Yes, if the discount was genuine, commercially available or contractually agreed and supported by contemporaneous records.

5. Are related-party transactions automatically rejected?

No. The importer can prove that the relationship did not influence the price.

6. Can Customs request the foreign supplier’s bank records?

It may request payment evidence through the importer, exporter or relevant customs authority during a valuation investigation.

7. Can Customs add royalties to the invoice value?

Potentially, where the royalty relates to the imported goods and is a condition of sale. The agreement and payment structure must be examined.

8. Can Customs use a reference price instead of the invoice?

Only where the transaction value cannot be accepted under the valuation rules. The method and calculation should be explained.

9. What is the deadline to object to the assessment?

An objection is generally filed within 15 days from lawful notification under Article 242 of Customs Law No. 4458.

10. Can a foreign company directly challenge the Turkish customs debt?

The Turkish importer generally faces the customs assessment, while the foreign company supports the defence and may pursue contractual remedies.

This article is intended for general informational purposes only. To avoid any loss of rights, we recommend consulting your lawyer regarding your specific circumstances.

Legal Support for Low Import Price Investigations

Fırat Fesih Kaya Law Office advises foreign companies, international groups, Turkish importers, manufacturers, distributors and logistics providers facing customs valuation investigations.

Lawyer Fırat Fesih Kaya can assist with transaction-value evidence, bank and accounting records, discount analysis, related-party pricing, royalty assessments, alternative valuation methods, customs audits, administrative objections and tax-court proceedings.

For urgent legal support:

Mobile / WhatsApp: +90 532 769 22 22
Office: +90 312 434 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yıldırım Tower, Balgat, Çankaya / Ankara, Turkey