Transaction value is the price actually paid or payable for the merchandise when sold for export to the United States, plus certain mandatory additions, and the additions are where the commission question lives. A selling commission is one of the mandatory additions: a commission paid to an agent who acts for the seller is added to the price to arrive at customs value. A buying commission is not: a commission paid to an agent who acts for the buyer, to find the goods, negotiate the purchase, and arrange the shipment, is not dutiable, because it is a cost of buying, not a cost of the goods. The distinction is one word in the contract, and it is worth thousands of dollars on the entry.
The reason the distinction exists is that the selling commission is part of what the seller receives for the goods, and the buying commission is part of what the buyer spends to acquire them. The seller's agent is paid by the seller out of the price of the goods, so the commission is embedded in the value. The buyer's agent is paid by the buyer for a service, so the commission is outside the value. The test is not the label on the invoice. It is who the agent works for, and CBP decides that on the contract, the payment flow, and the agent's actual role in the transaction. Royalties and license fees work the same way: the question is whether the payment is a condition of the sale, and the answer decides whether it is added to value.
CBP looks at the entirety of the circumstances, and the circumstances that matter are the contract, the payment, and the control. The contract: does the agent's agreement run with the buyer or with the seller, and does it describe buying services or selling services? The payment: who pays the agent, and does the payment flow through the price of the goods or separately from it? The control: does the agent take instructions from the buyer about what to buy, or from the seller about what to sell? An agent who finds suppliers, negotiates on the buyer's behalf, inspects the goods, and arranges shipment for the buyer is a buying agent. An agent who markets the seller's goods, finds buyers, and closes sales for the seller is a selling agent, and the commission is dutiable.
The cases that go wrong are the ones where the agent does both, or where the label says one thing and the facts say another. An agent who is called a buying agent but is paid by the seller, or who takes a percentage of the sale price rather than a fee for service, will be treated as a selling agent, because the payment structure shows who the agent really works for. A related-party agent is the hardest case, because the arm's length question applies to the commission as well as to the price, and the importer bears the burden of showing the commission is a real service fee, not a disguised part of the price. Related-party pricing is the same problem: the relationship does not decide the answer, but it shifts the burden of proof to the importer.
The proof is the paper trail, and the paper trail has to exist before the entry is filed, not after CBP asks for it. The agent's contract, showing who engaged the agent and for what services. The payment records, showing who paid the agent and how the payment was calculated. The correspondence, showing who gave the agent instructions and what those instructions were. And the entry summary, showing the commission treated consistently with the contract. An importer who claims a buying commission exclusion without the contract and the payment records will lose the exclusion, and the duty will be assessed on the full price plus the commission.
The other additions ride on the same principle. Packing costs, assists, and royalties that are a condition of the sale are added to value, and the additions are mandatory, not optional. The first sale rule is the same kind of test: the price that sets the value is the price on the sale that qualifies, and the burden is on the importer to prove it. Assists, molds, and tooling raise dutiable value when the buyer supplies them, and the commission question is the same: who paid for what, and was it part of the price of the goods? The entry that answers those questions with documents is the entry that survives.
No. A commission paid to an agent who acts for the buyer is not dutiable. A selling commission paid to an agent who acts for the seller is a mandatory addition to transaction value.
On the contract, the payment flow, and the agent's actual role: who engaged the agent, who pays them, and who gives them instructions. The label on the invoice does not decide it. The facts do.
Then CBP will look at which role dominates the transaction, and the payment structure will usually decide it. An agent paid a percentage of the sale price looks like a selling agent, whatever the contract calls them.
The agent's contract, the payment records showing who paid and how it was calculated, and the correspondence showing who gave the agent instructions. The paper trail has to exist before the entry is filed.