Trademark Royalty and Imported Goods in Turkey: When Does Additional Customs Duty Arise? (2026 Updated Guide)

Does a trademark royalty increase the customs value of imported goods in Turkey? Learn when royalties and licence fees must be added, the condition-of-sale test, related-party risks, post-clearance audits, additional duties and penalties.

Foreign companies importing branded products into Turkey frequently pay two different amounts: the purchase price of the physical goods to the foreign manufacturer or supplier and a separate trademark royalty or licence fee to the brand owner. The existence of a separate royalty agreement does not automatically mean that the payment is irrelevant to customs valuation. Under Turkey’s customs valuation framework, royalties and licence fees related to imported goods can be added to the customs value when the required legal conditions are satisfied. The Ministry of Trade states that royalties and licence fees are added where they relate to the goods being valued and the buyer must pay them, directly or indirectly, as a condition of sale, provided they are not already included in the price actually paid or payable.

For foreign manufacturers, brand owners, franchise groups and Turkish importers, the key issue is therefore not simply whether a royalty exists. The decisive analysis concerns what the payment is for, how closely it relates to the imported goods, whether payment is effectively required for the goods to be sold to the Turkish buyer, who receives the payment and whether an objectively measurable portion can be allocated to the imported goods.

What Is a Royalty or Licence Fee for Turkish Customs Purposes?

The Ministry of Trade describes royalty and licence fees broadly as payments made under concepts such as patents, designs, know-how, models, trademarks, registered designs, copyrights and manufacturing processes in connection with the manufacture, sale for export, use or resale of imported goods.

Trademark royalties therefore fall squarely within the type of payments that may require customs-value analysis.

Does Every Trademark Royalty Increase Customs Value?

No.

The existence of a trademark licence does not automatically mean that every royalty payment must be included in the customs value of imported products.

Two central questions normally arise: Does the royalty relate to the imported goods? Is payment of the royalty a condition of sale of those goods?

If either requirement is genuinely absent, there may be grounds for arguing that the payment should not be added under the royalty provisions.

The First Test: Does the Royalty Relate to the Imported Goods?

The agreement and actual commercial relationship should be examined together.

Suppose a Turkish company imports branded shoes and pays the foreign trademark owner a percentage of Turkish sales for the right to sell those exact branded shoes. The connection with the imported goods may be relatively direct.

The analysis becomes more complicated where the licence covers numerous rights, local marketing, store concepts, digital platforms, know-how and other services in addition to trademarks attached to imported goods.

The Second Test: Is the Royalty a Condition of Sale?

This is often the central dispute.

The question is whether the buyer must make the royalty payment, directly or indirectly, as a condition for obtaining the imported goods under the relevant commercial structure.

Customs authorities may therefore examine much more than the wording of the import invoice.

Customs Can Examine Several Contracts Together

Multinational groups often structure transactions through separate documents: a supply agreement, trademark licence, distribution agreement, franchise agreement, marketing agreement and intercompany services agreement.

Customs valuation should not be analyzed by reading only one agreement in isolation.

The economic and contractual relationship between the agreements can be crucial.

Paying the Royalty to a Different Company Does Not Automatically Solve the Issue

A Turkish importer may purchase goods from Manufacturer A but pay the trademark royalty to Brand Owner B.

That separation does not automatically prevent customs-value inclusion.

However, the Ministry’s guidance also recognizes that where the buyer pays a royalty to a third party, the condition-of-sale requirement is not automatically satisfied merely because the payment exists; the relationship among the seller, licensor and payment obligation must be examined.

Related Companies Require Particular Attention

Consider a corporate group in which the trademark owner, manufacturer and Turkish importer are related companies.

Customs authorities may examine whether the brand owner controls the manufacturer, whether the importer can purchase the goods without maintaining the licence and whether termination of the licence would effectively prevent continued supply.

The corporate structure alone does not determine the answer, but it can materially affect the factual analysis.

Trademark Royalties Have Specific Valuation Considerations

The Ministry’s current customs-value guidance specifically addresses trademark royalties. It indicates that inclusion can depend on matters such as whether the royalty concerns goods resold in the same condition or after only minor processing, whether the goods are marketed under the royalty-bearing trademark and whether the buyer is free to source such goods from sellers unrelated to the seller.

This means sourcing freedom can become a particularly important factual issue.

Can the Turkish Importer Buy the Goods From Independent Suppliers?

This question should be investigated carefully.

If the importer genuinely has freedom to purchase qualifying branded products from unrelated manufacturers without the licensor controlling that choice, the contractual structure may differ materially from a system in which the brand owner dictates the manufacturer and conditions access to the goods on royalty payment.

Evidence should reflect commercial reality, not merely contractual language.

Percentage-of-Sales Royalties Require Careful Review

Many trademark licences calculate royalties as a percentage of Turkish net sales rather than as a fixed amount per imported unit.

That does not automatically exclude the royalty from customs valuation.

The Ministry’s guidance states that where a royalty amount is calculated by reference to the price of imported goods, it is presumed, absent contrary evidence, to relate to the goods being valued. Even where the royalty is calculated independently of the imported-goods price, it may still be considered related depending on the circumstances.

What If the Royalty Covers Imported and Locally Manufactured Goods?

This is a common multinational-company problem.

A Turkish licensee may pay one royalty covering imported finished products and products manufactured domestically.

It may be incorrect simply to add the entire royalty to the customs value of imported goods.

The Ministry states that where royalties relate partly to imported goods and partly to post-importation components, activities or services, an appropriate allocation can be made where it is based on objective and quantifiable data.

Objective and Quantifiable Allocation Is Critical

A royalty allocation should not be invented after a customs audit begins.

The company should ideally have a defensible methodology showing which portion relates to imported goods and which portion relates to other rights, services or locally generated value.

The Customs Law framework requires additions to customs value to be based on objective and quantifiable data.

What If the Imported Product Is Only a Component?

Suppose a Turkish manufacturer imports a component carrying licensed technology and uses it to manufacture a larger finished product domestically.

The royalty should not automatically be allocated entirely to the imported component.

The actual relationship between the royalty and imported item must be analyzed.

Royalties for Reproduction Rights Can Be Different

The Ministry states that charges for the right to reproduce imported goods in Turkey are not added to the customs value under the ordinary royalty rule.

The precise licence rights should therefore be separated rather than treating every intellectual-property payment identically.

Distribution and Resale Rights Also Require Separate Analysis

Payments for distribution or resale rights are not automatically included where they are not a condition of the sale for export of the imported goods.

This distinction can be particularly important for exclusive distribution agreements.

Franchise Agreements Can Create More Complex Problems

A franchise payment may compensate the foreign company for trademarks, business systems, store design, training, operational know-how, advertising systems and continuing support.

Treating the entire franchise fee automatically as a customs-value addition may therefore overlook the different economic components of the payment.

The contract and payment calculation should be analyzed in detail.

Marketing Fees Should Not Automatically Be Called Royalties

The importer may also pay for international advertising, promotional campaigns, digital platforms or other services.

The legal nature of each payment should be determined independently.

Renaming a royalty as a “marketing fee” will not change its substance, but genuine marketing expenditure should not automatically be characterized as a royalty merely because the recipient is the brand owner.

Customs Authorities Can Discover Royalties After Importation

Royalty disputes frequently emerge during post-clearance audits rather than at the border.

Auditors may examine accounting ledgers, transfer-pricing records, intercompany contracts, licence agreements and payments to foreign related parties.

A company that declared only invoice values for years may therefore face historical exposure.

Transfer-Pricing Documentation Can Become Evidence

Tax documentation sometimes explains payments more clearly than customs declarations.

If transfer-pricing reports describe a payment as compensation for the right to exploit trademarks on imported products, Customs may compare that description with the company’s customs treatment.

Consistency between tax, accounting and customs positions is therefore important.

Customs and Tax Treatment Are Not Automatically Identical

A payment can have one characterization for corporate-tax purposes while still requiring separate customs-value analysis.

Companies should avoid assuming that acceptance of a transfer-pricing policy by tax authorities automatically determines the customs result.

What Happens If Customs Decides the Royalty Should Have Been Declared?

Customs may recalculate the customs value of the relevant imported goods and assess additional import duties arising from the increased value.

Depending on the relevant imports, this can also affect other taxes calculated by reference to customs value.

Customs Penalties May Also Arise

The Ministry’s customs-value guidance notes that deficient value declarations can trigger additional customs duties and penalties under the Customs Law, while the Anti-Smuggling Law remains separately reserved for circumstances meeting its requirements.

The legal basis of any penalty should be analyzed separately from the underlying customs-value adjustment.

An Additional Assessment Does Not Automatically Establish Fraud

A royalty valuation disagreement can involve genuinely complex questions concerning relatedness and condition of sale.

Whether additional customs duty is payable and whether a penalty or criminal allegation is legally justified are distinct issues.

The company’s contractual interpretation, accounting treatment, disclosure history and good-faith compliance efforts may therefore become important.

Historical Imports Should Be Reviewed Declaration by Declaration

Once Customs raises a royalty issue, the company should identify all potentially affected imports.

Prepare a matrix containing the declaration date, supplier, product, customs value, royalty period, royalty amount, licence agreement and applicable allocation methodology.

Do not assume that every historical shipment necessarily has identical exposure.

Agreements May Have Changed Over Time

A licence agreement may have been amended. The royalty percentage may have changed. A new licensor may have entered the structure. Local manufacturing may have started later.

Historical customs exposure should therefore be analyzed using the contractual arrangements actually in force for each period.

Royalty Payments Made After Importation Can Still Matter

The fact that the final royalty amount is calculated months after the goods entered Turkey does not necessarily make the payment irrelevant to customs value.

The company should examine whether its customs procedure properly accommodates payments whose final amount becomes known only later.

Estimated and Final Royalty Calculations Should Be Reconciled

Where a lawful valuation mechanism allows an amount initially to be declared provisionally or through an applicable exceptional valuation procedure, the company should maintain a reliable reconciliation system.

Year-end adjustments should not remain disconnected from customs declarations.

Customs Audits Often Focus on Accounting Codes

Companies should review ledger accounts such as trademark royalty, licence fee, franchise fee, brand fee, technical licence, management fee and intercompany service fee.

The label alone does not decide customs treatment, but it can identify transactions requiring analysis.

Foreign Brand Owners Should Cooperate With Turkish Importers

A Turkish importer cannot defend a royalty valuation issue effectively if the foreign licensor refuses to explain the licence arrangement.

Foreign brand owners should be prepared to provide the relevant contractual and commercial information needed to establish the true nature of the payment.

Confidentiality Should Be Managed

Royalty agreements may contain commercially sensitive rates, territories, product lists and intellectual-property provisions.

Confidentiality concerns should be managed through the appropriate legal process rather than by withholding essential information from Customs.

What Evidence Can Support the Importer’s Position?

Depending on the dispute, useful evidence may include the trademark licence, supply agreement, distribution agreement, invoices, royalty calculations, sourcing policies, corporate structure, manufacturer relationships, accounting records and evidence showing whether the importer could purchase goods independently of the licensor.

The objective is to demonstrate the real commercial relationship.

Contract Language Alone May Not Be Enough

A clause stating that a royalty is “not related to imported goods” does not necessarily establish that conclusion if the actual commercial arrangement shows otherwise.

Conversely, Customs should not disregard genuine contractual and commercial evidence merely because the parties are related.

Substance and evidence should be examined together.

Can the Customs Assessment Be Challenged?

Potentially. Where Customs issues an additional duty or penalty decision, the importer should identify the applicable administrative objection procedure and protect the relevant deadline immediately.

The defense should address both the legal royalty tests and the underlying calculations.

Challenge the Calculation Even If Inclusion Is Disputed

A company may argue primarily that no royalty should be added at all. It should nevertheless consider whether Customs’ alternative calculation is excessive.

For example, Customs may have attributed the entire royalty to imports even though part clearly relates to domestic production or other activities.

Primary and alternative arguments can therefore both be important.

Mathematical Errors Can Create Major Exposure

Royalty assessments covering several years can involve thousands of import declarations.

Check exchange rates, royalty periods, imported quantities, sales figures and allocation percentages carefully.

A small methodology error can produce a substantial assessment.

Supplier and Licensor Contracts Should Be Reviewed Together

Foreign groups should avoid drafting licence agreements without considering customs valuation.

A licence clause that gives the brand owner extensive control over sourcing may have customs consequences that were never considered by the commercial team.

Future Contracts Should Address Customs Consequences

When renegotiating a trademark licence, companies should examine royalty calculation, sourcing restrictions, relationship with supply contracts, locally manufactured goods and allocation methodology.

Customs planning should occur before payments begin.

2026 Compliance Strategy for Foreign Companies

Foreign manufacturers, brand owners and Turkish importers should conduct a customs-value review before a post-clearance audit begins. The Ministry’s current guidance confirms that royalties related to imported goods and paid as a condition of sale may be included, while trademark royalties involve additional factual considerations and additions must be supported by objective and quantifiable data.

The most effective approach is therefore to map the complete commercial structure rather than reviewing the import invoice alone.

Frequently Asked Questions

Is every trademark royalty added to customs value in Turkey?

No. The relationship with the imported goods and the condition-of-sale requirement must be examined under the applicable customs valuation rules.

What does “condition of sale” mean?

The analysis concerns whether the buyer is required, directly or indirectly, to make the royalty payment as a condition connected with obtaining the imported goods under the relevant commercial arrangement.

What if the royalty is paid to the brand owner rather than the seller?

Payment to a third party does not automatically determine the result. The relationships among the buyer, seller, licensor and payment obligation should be examined.

Can a royalty based on Turkish sales still increase customs value?

Potentially. The method used to calculate the royalty does not by itself remove the payment from customs valuation.

What if the royalty covers both imported and locally produced products?

An appropriate allocation may be necessary. The Ministry’s guidance provides for allocation based on objective and quantifiable data where payments relate partly to imported goods and partly to other components, activities or services.

Are reproduction rights treated the same way?

Not necessarily. Payments for the right to reproduce imported goods in Turkey are specifically treated differently under the customs valuation framework.

Can Customs investigate royalties years after importation?

Royalty issues can arise in post-clearance controls. Companies should therefore preserve agreements, payment calculations and import records systematically.

Can Customs impose penalties as well as additional duties?

Potentially. However, the legal basis for additional duty and the legal basis for any penalty should be reviewed separately.

Can the importer challenge Customs’ royalty calculation?

Potentially. Both the decision to include the royalty and the amount allocated to imported goods can require examination depending on the facts.

What is the most important question in a trademark royalty case?

Do not ask only whether a trademark royalty was paid. Determine precisely what rights the payment covers, whether it relates to the imported goods, whether payment is genuinely a condition of their sale, and what portion—if any—can be attributed to those goods using objective and quantifiable evidence.

Client-Focused Legal Support for Royalty and Customs Valuation Disputes

Trademark royalty disputes can create substantial exposure involving customs valuation, historical declarations, additional import duties, administrative penalties and post-clearance audits. Fırat Fesih Kaya Law Office assists foreign manufacturers, international brand owners and Turkish importers in evaluating royalty and licence arrangements, responding to customs valuation audits, challenging additional assessments and penalties, and restructuring future compliance procedures. Lawyer Fırat Fesih Kaya provides legal assistance in disputes involving trademark royalties, licence fees, franchise arrangements, related-party imports and other customs-value adjustments.

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