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The editing revisions made in this memorandum do not affect or change any of the existing policies or procedures.
This memorandum outlines the effect upon the application of various methods of valuation of provisions in the Customs Act pertaining to related persons.
Sections 48 to 53 of the Customs Act.
Guidelines and General Information
1. Under subsection 45(3), persons are related to each other if:
- (a) they are individuals connected by blood relationship, marriage, common-law partnership or adoption within the meaning of subsection 251(6) of the Income Tax Act;
- (b) one is an officer or director of the other;
- (c) each such person is an officer or director of the same two corporations, associations, partnerships or other organizations;
- (d) they are partners;
- (e) one is the employer of the other;
- (f) they directly or indirectly control or are controlled by the same person;
- (g) one directly or indirectly controls or is controlled by the other;
- (h) any other person directly or indirectly owns, holds or controls five per cent or more of the outstanding voting stock or shares of each such person; or
- (i) one directly or indirectly owns, holds or controls five per cent or more of the outstanding voting stock or shares of the other.
2. The existence of a relationship is relevant to the determination of the value for duty in the following situations:
- (a) under paragraph 48(1)(d), the transaction value determined in a sale between related persons cannot be used as the value for duty unless the requirements of that paragraph are met (refer to Memorandum D13-4-5, Transaction Value Method for Related Persons);
- (b) under paragraph 48(3)(a), when establishing the acceptability of the transaction value in a sale between related persons using the test values, the transaction value of identical or similar goods, which are likewise sold to a related person, cannot be used (refer to Memorandum D13-4-5); and
- (c) under paragraph 51(3)(a), a sale between related persons cannot be used to determine the "price per unit" when valuing goods using the deductive value method (refer to Memorandum D13-7-1, Deductive Value Method – Determination of the Price Per Unit).
3. For more information, call contact the CBSA Border Information Service (BIS):
Calls within Canada & the United States (toll free): 1-800-461-9999
Calls outside Canada & the United States (long distance charges apply):
1-204-983-3550 or 1-506-636-5064
Contact Us online (webform)
Contact Us at the CBSA website
- Issuing office:
- Trade Programs Directorate
- Headquarters file:
- Legislative references:
- Customs Act
Income Tax Act
- Other references:
- D13-4-5, D13-7-1
- Superseded memorandum D:
Services provided by the Canada Border Services Agency are available in both official languages.
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