Turkish importers that provide molds, dies, tooling or production equipment free of charge to foreign manufacturers may face additional customs valuation obligations. Learn how assists are valued, allocated and documented in Turkey.

A Turkish importer may purchase or own molds, dies, tooling and specialized production equipment and provide them free of charge to a foreign manufacturer.

This structure is common in:

• Automotive manufacturing;
• Plastics;
• Electronics;
• Machinery;
• Medical devices;
• Consumer products;
• Metal components;
• Packaging.

Although the foreign manufacturer does not invoice the Turkish importer for use of the tool or mold, this does not necessarily mean its value can be ignored for customs purposes.

Under Turkish customs valuation rules, tools, dies, molds and similar items supplied directly or indirectly by the buyer free of charge or at reduced cost for use in producing imported goods can require an appropriate portion of their value to be added to the price actually paid or payable, to the extent that value has not already been included.

1. What Is a Customs Valuation “Assist”?

An assist is broadly a good or service supplied by the buyer directly or indirectly, free of charge or at reduced cost, for use in producing goods that are subsequently imported.

Relevant categories can include:

• Tools;
• Dies;
• Molds;
• Production equipment;
• Components;
• Materials;
• Consumable production materials;
• Certain foreign engineering and design work.

For manufacturers and multinational groups, molds and tooling are among the most important assist-related customs risks.

2. Free Supply Does Not Mean Zero Customs Value

Consider this example:

Turkish importer purchases a mold: EUR 500,000.

The importer sends the mold to a manufacturer abroad.

The foreign manufacturer uses it without charge to produce components sold back to the Turkish importer.

The manufacturer invoices only:

EUR 20 per component.

The importer should not automatically declare only EUR 20 as the customs value basis.

Customs may require an appropriate portion of the mold’s value to be added because the mold was supplied by the buyer for use in producing the imported merchandise.

3. The Same Rule Can Apply to Reduced-Cost Tools

The tool does not need to be completely free.

Suppose:

Actual mold value: EUR 400,000.

Manufacturer pays importer: EUR 50,000.

The remaining economic benefit may require analysis because the customs rules also cover qualifying items supplied at a reduced cost.

4. Determine Who Actually Supplied the Mold

Identify whether the tool was supplied by:

• Turkish importer;
• Turkish importer’s parent;
• Related company;
• Customer acting for the importer;
• Another party on the buyer’s behalf.

Indirect supply can also matter.

Corporate structure alone should not be used to assume that the tool is irrelevant.

5. Determine Who Owns the Mold

Ownership documentation can help establish:

• Acquisition cost;
• Payment;
• Depreciation;
• Useful life;
• Production rights.

But ownership alone does not resolve the customs issue.

The more important question is whether the buyer supplied the mold for use in producing the imported goods.

6. Identify Exactly Which Goods Are Produced With the Mold

A mold may manufacture:

only goods imported into Turkey

or

goods sold to several countries.

This distinction is critical.

The importer should establish exactly how much production is attributable to goods imported into Turkey.

7. Allocation Is One of the Most Important Issues

Customs rules do not necessarily require the entire mold value to be added to the first imported shipment.

An appropriate portion of the qualifying value is relevant.

The allocation methodology therefore becomes essential.

8. Example of Unit-Based Allocation

Suppose:

Mold value: EUR 600,000

Expected production: 600,000 units.

A simplified allocation could produce:

EUR 1 mold value per unit.

If 20,000 units are imported into Turkey, the relevant allocation for those imports may therefore require analysis based on EUR 20,000.

The actual methodology should reflect the facts and applicable customs rules.

9. Expected Production Must Be Realistic

Avoid unsupported estimates such as:

“This mold will produce 5 million units.”

The importer should preserve evidence supporting expected output, including:

• Engineering specifications;
• Manufacturer estimates;
• Tool-life studies;
• Production contracts;
• Historical production data.

10. Actual Production May Differ From Expected Production

A mold expected to produce 1 million units may fail after 300,000.

Alternatively, it may remain productive for 2 million units.

The company should establish how its allocation methodology deals with material differences between expected and actual production.

11. Production for Other Countries Must Be Considered

Suppose a mold produces:

40% goods for Turkey

30% goods for Germany

30% goods for France.

The Turkish customs analysis should not automatically allocate the entire mold value exclusively to Turkish imports.

Production and shipment records become important evidence.

12. Multiple Products May Use the Same Tool

Some production tools manufacture components used in several products.

The importer may therefore need an allocation based on:

• Production volume;
• Machine hours;
• Units;
• Product usage;
• Another objective methodology.

The methodology should be commercially defensible.

13. Customs Additions Must Be Based on Objective Data

The Ministry of Trade expressly states that additions to the price actually paid or payable must be based on objective and measurable data.

Accordingly, companies should avoid arbitrary tooling allocations.

14. Check Whether the Mold Cost Is Already Included in the Product Price

This is essential to prevent double counting.

The foreign manufacturer may already recover tooling through:

EUR 20 manufacturing cost

• EUR 2 tooling recovery
• profit.

If the relevant mold value is already included in the invoiced product price, adding the same value again could create double counting.

Obtain a supplier pricing breakdown where necessary.

15. Tooling Amortization Clauses Are Important

Manufacturing agreements often state:

“Tooling cost will be amortized over the first 100,000 units.”

Such clauses can provide important evidence about how the tool’s value is recovered.

Review them before determining the customs treatment.

16. Separate Tooling Invoice Structures Need Careful Review

Sometimes the Turkish importer pays:

EUR 500,000 tooling invoice

and subsequently purchases products at a reduced unit price.

Customs may examine whether the tooling payment and goods price should be considered together for valuation purposes.

Separate invoicing does not automatically make the tooling irrelevant.

17. A Mold Purchased From a Third Party Can Still Matter

Suppose the Turkish importer buys a mold from an independent engineering company and sends it directly to the foreign manufacturer.

The fact that the seller of the mold and manufacturer of the imported goods are different companies does not necessarily eliminate assist treatment.

The buyer’s contribution to production remains the central issue.

18. Related-Party Structures Create Additional Risk

Consider:

Turkish subsidiary

→ purchases mold

→ provides it free to foreign parent manufacturer

→ imports finished goods.

Customs may examine both:

the related-party transaction price

and

the buyer-supplied mold.

The two issues should be analyzed together.

19. Tooling Can Affect Transfer Pricing Too

Multinationals should ensure consistency between:

• Customs valuation;
• Transfer pricing;
• Intercompany agreements;
• Accounting treatment.

If a transfer-pricing report states that the Turkish subsidiary bears all product-development and tooling costs, Customs may ask whether those costs were properly considered in customs valuation.

20. Molds Created Abroad Can Also Involve Engineering Costs

A mold may require:

• Engineering;
• CAD drawings;
• Product design;
• Prototype work;
• Testing.

Turkish customs valuation rules separately identify certain engineering, development, artwork, design work, plans and sketches performed outside Turkey and necessary for producing imported goods as potential additions where the statutory conditions are satisfied.

Therefore, the physical mold may not be the only relevant cost.

21. Prototype Tooling Requires Separate Review

Before mass production, a company may create:

• Prototype molds;
• Trial dies;
• Test fixtures;
• Pilot-production tools.

Determine whether they were used in connection with the imported commercial goods or only independent development activities.

Do not automatically allocate every development asset to commercial imports.

22. Repair Costs Can Create Additional Questions

Molds may require substantial repairs abroad.

Ask:

• Who paid?
• Was the repair necessary for continued production?
• Was the expense already recovered in the unit price?
• Did the importer supply the repair free of charge?

The answer should be documented.

23. Replacement Molds Must Be Tracked

A company may replace the original mold after several years.

Maintain a separate record for:

Mold A

and

Mold B.

Do not continue allocating the original mold indefinitely after it is no longer used.

24. Tool Ownership Registers Are Valuable

Maintain a central tooling register containing:

• Tool number;
• Description;
• Owner;
• Location;
• Manufacturer;
• Acquisition value;
• Date supplied;
• Products manufactured;
• Expected useful production;
• Actual production;
• Customs allocation.

This can substantially reduce audit risk.

25. Customs May Discover Tools Through Fixed-Asset Records

During a post-clearance audit, Customs may compare:

fixed-asset register

with

foreign manufacturing arrangements.

Entries such as:

Molds Located Abroad

Foreign Tooling

Production Dies

can lead to questions about historical customs declarations.

26. Accounting Depreciation Does Not Automatically Determine Customs Allocation

A mold may be depreciated over five years for accounting purposes.

That does not automatically mean customs value must be allocated over exactly five years.

Customs valuation and financial accounting serve different purposes.

The allocation should reflect the applicable customs rules and production facts.

27. Free Components Can Create Similar Issues

The same general assist concept is not limited to molds.

It may also cover qualifying:

• Materials;
• Components;
• Parts;

supplied free or at reduced cost and incorporated into imported goods.

Companies should therefore review the entire manufacturing arrangement.

28. Consumable Materials Can Also Matter

Certain materials consumed during foreign production may also fall within the statutory additions where supplied by the buyer free or at reduced cost.

A tooling audit should therefore not stop with fixed assets.

29. Prepare a Supplier Confirmation

Where appropriate, obtain confirmation from the foreign manufacturer showing:

• Tool received;
• Ownership;
• Date received;
• Products manufactured;
• Production quantity;
• Whether tooling value is included in unit prices.

This can become important during an audit.

30. Reconcile Tooling With Import Declarations

The company should be able to trace:

Tool

→ manufacturer

→ product

→ commercial invoice

→ customs declaration

→ assist allocation.

Without this chain, historical reconstruction can become extremely difficult.

31. Historical Imports May Be Reviewed

If Customs discovers an undeclared free mold during an audit, it may investigate previous imports manufactured using that mold.

The company should conduct its own historical review promptly.

32. Build a Declaration-Level Exposure Model

Identify:

Declaration

Product

Quantity

Original customs value

Tooling allocation

Potential revised value

Applicable duty consequences.

This provides management with a realistic exposure calculation.

33. Different Products Can Produce Different Duty Consequences

A single mold may manufacture parts falling under different tariff classifications.

Therefore, additional customs exposure may depend on:

• Classification;
• Origin;
• Ordinary customs duty;
• Additional customs duty;
• Other value-based import charges.

Do not simply multiply total tooling value by one average duty rate.

34. Check Preferential Origin Treatment

Where imported goods benefit from preferential treatment, confirm the applicable documentation and conditions.

An increase in customs value does not necessarily produce the same duty impact for every import.

35. Do Not Automatically Correct Every Historical Declaration

Discovery of a foreign mold does not itself establish the amount of any underpayment.

First determine:

1. Whether the buyer supplied the mold.
2. Whether it was free or reduced-cost.
3. Whether it was used for imported goods.
4. Its correct value.
5. Whether that value was already included.
6. Appropriate allocation.
7. Which declarations were affected.

Only then should correction strategy be determined.

36. Penalty Exposure Requires Separate Analysis

If Customs concludes that an assist was omitted, additional duty and administrative penalty should be analyzed separately.

Relevant circumstances may include:

• Information available at importation;
• How the supplier invoiced the goods;
• Whether tooling was disclosed;
• Whether the allocation was objectively determinable;
• Nature of the valuation dispute.

37. Prospective Correction Does Not Automatically Resolve Historical Liability

If a company discovers the issue and begins adding tooling allocations to future imports, it should separately analyze historical declarations.

At the same time, changing future treatment should not automatically be treated as an admission concerning every historical declaration.

38. Challenge Double Counting

One of the strongest potential defenses arises where Customs adds tooling value even though the manufacturer has already incorporated the same amount into its product prices.

The importer should demonstrate the duplication using:

• Cost sheets;
• Pricing formulas;
• Supplier statements;
• Accounting records.

39. Challenge Incorrect Allocation

Customs may also overstate liability by allocating:

100% of the mold value to Turkish imports

when substantial production was exported elsewhere.

Production records can be decisive.

40. Challenge Unsupported Tool Values

The amount used by Customs should also be examined.

Relevant evidence may include:

• Purchase invoice;
• Manufacturing cost;
• Independent valuation;
• Depreciation records;
• Condition of the mold.

An arbitrary tool value should not simply be accepted.

41. Review Tooling Before Production Begins

The best time to address assist valuation is before the first commercial shipment.

Ask:

Who owns the mold?

Who paid for it?

Where will it be located?

Which products will it manufacture?

How many units are expected?

Is its value already recovered through product pricing?

42. Add Customs Review to Procurement Procedures

Procurement teams should flag contracts containing phrases such as:

free-issue tooling

buyer-owned tooling

customer-supplied mold

tooling amortization

customer property.

These phrases can signal a customs valuation issue.

43. Coordinate Engineering and Customs Teams

The customs department may not know that a EUR 2 million mold is located at a foreign supplier’s factory.

Engineering may not know that this creates a customs valuation question.

Companies should establish a formal information-sharing procedure.

44. Maintain an Annual Assist Reconciliation

At least annually, reconcile:

foreign-held tooling register

against

imported products and customs declarations.

This can identify:

• New molds;
• Retired molds;
• Production-volume changes;
• Missing allocations;
• Double counting.

45. Immediate Action Plan

When tools or molds are supplied free to a foreign manufacturer:

Identify the asset

→ confirm ownership

→ determine acquisition or production value

→ identify the foreign manufacturer

→ identify goods produced

→ check whether goods are imported into Turkey

→ determine whether the value is already included in product prices

→ calculate an objective allocation

→ map the allocation to imports

→ review engineering and development costs

→ review historical declarations

→ calculate potential customs exposure

→ analyze penalties separately

→ challenge double counting or excessive allocations

→ implement prospective controls.

25-Point Free Tooling and Mold Customs Checklist

1. Tooling purchase invoice.
2. Mold ownership records.
3. Fixed-asset register.
4. Foreign manufacturer agreement.
5. Tooling agreement.
6. Tool identification number.
7. Physical location.
8. Date supplied.
9. Product manufactured.
10. Expected production volume.
11. Actual production volume.
12. Turkish import volume.
13. Other-country production.
14. Product pricing formula.
15. Tooling amortization.
16. Engineering costs.
17. Design costs.
18. Prototype costs.
19. Repair costs.
20. Replacement tooling.
21. Supplier confirmation.
22. Import declarations.
23. Allocation methodology.
24. Historical exposure.
25. Penalty and objection analysis.

Frequently Asked Questions

1. Is a mold supplied free to a foreign manufacturer included in Turkish customs value?

Potentially yes. Turkish customs valuation rules expressly identify tools, dies, molds and similar items supplied directly or indirectly by the buyer free of charge or at reduced cost for use in producing imported goods as potential additions to transaction value, to the extent their value has not already been included.

2. Must the entire mold value be added to the first shipment?

Not necessarily. The rules refer to an appropriate allocation of the qualifying value. The correct methodology depends on the circumstances and should be supported by objective data.

3. What if the foreign manufacturer already includes tooling recovery in the product price?

The importer should check carefully for double counting. If the relevant value has already been incorporated into the price actually paid or payable, the same economic value should not simply be added again.

4. What if the mold produces goods for several countries?

The allocation should reflect the actual facts. Production for markets other than Turkey can be important when determining the appropriate portion attributable to Turkish imports.

5. Does the rule apply only to molds?

No. The statutory categories also include qualifying tools, dies, materials, components, production consumables and certain engineering and development work performed outside Turkey.

6. What if the Turkish importer bought the mold from an unrelated company?

That does not automatically remove the issue. The key question is whether the buyer supplied the mold directly or indirectly, free or at reduced cost, for use in producing imported goods.

7. Can engineering and design costs associated with the mold also affect customs value?

Potentially. Turkish customs rules specifically identify qualifying engineering, development, artwork, design work, plans and sketches performed outside Turkey and necessary for production.

8. Can Customs investigate old imports after discovering a foreign-held mold?

Yes. Customs may examine historical declarations involving goods manufactured with the tool, subject to the applicable procedural framework.

9. Should the importer automatically amend historical declarations?

No. First establish whether the mold qualifies as an assist, determine its proper value, check whether it was already included in product pricing, calculate the appropriate allocation and identify the declarations actually affected.

10. What should multinational manufacturers do prospectively?

Create a centralized foreign tooling register linked directly to product codes and customs declarations. Every buyer-owned mold, die or production tool located at a foreign supplier should undergo customs valuation review before the first shipment is imported into Turkey.

Client-Focused Legal Support for Customs Assist Valuation in Turkey

Free tooling arrangements can involve:

Buyer-owned molds

Dies and production tools

Free-issue tooling

Reduced-cost production equipment

Engineering and design assists

Related-party manufacturing

Customs valuation

Historical import exposure

Additional customs duties

and customs penalties.

Fırat Fesih Kaya Law Office assists multinational manufacturers, foreign suppliers and Turkish importers where molds, tooling or other production assets supplied to foreign manufacturers may affect the customs value of goods imported into Turkey.

Lawyer Fırat Fesih Kaya provides legal assistance in identifying customs assists, reviewing tooling and manufacturing agreements, developing allocation methodologies, preventing double counting, analyzing historical declarations, calculating potential exposure and challenging additional customs assessments and penalties.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey