Revenue Amendment Act 2004
REVENUE AMENDMENT ACT 2004

1

BERMUDA
2004 : 6

REVENUE AMENDMENT ACT 2004

[Date of Assent: 26 March 2004]

[Operative Date: 26 March 2004]

ARRANGEMENT OF SECTIONS

1 Short title and
Commencement

2 Amendment of section 2
3 Amendment of section 11
4 Amendment of section 14
5 Amendment of section 24
6 Repeal of section 25
7 Repeal of section 35F
8 Amendment of section 50
9 Amendment of section 64
10 Amendment of section 65
11 Substitution of section 77
12 Repeal of section 78
13 Amendment of section 82

14 Insertion of section 84A
15 Substitution of section 111A
16 Repeal of section 122 and

insertion of review and appeal
provisions

17 Re designation of existing
Schedule and insertion of
other Schedules

18 Amendments relating to
penalties

19 Consequential Amendments

FIRST SCHEDULE
SECOND SCHEDULE
THIRD SCHEDULE

WHEREAS it is expedient to amend the Revenue Act 1898.

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

REVENUE AMENDMENT ACT 2004

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Short title and Commencement
1 (1) This Act may be cited as the Revenue Amendment Act 2004.

(2) Subject to subsection (4) this Act shall come into operation
on such day as the Minister may by Notice published in the Gazette
appoint and different days may be appointed for different provisions of
this Act.

(3) The Minister may make such transitional provisions as he
considers expedient in any Commencement Notice made under
subsection (2).

(4) Notwithstanding subsection (2), section 11 shall come into
force on the day of Royal Assent.

Amendment of section 2
2 Section 2 of the Revenue Act 1898 (in this Act referred to as "the
principal Act") is amended

(a) by repealing the word "goods" and its definition and
substituting the following word and its definition

""goods" includes all kinds of articles, wares,
merchandise, natural products and livestock;"; and

(b) by inserting in their proper alphabetical positions, the
following expressions and their definitions

""appealable decision" means any decision referred to
under section 122B(1);

"customs value" has the meaning prescribed under
section 24(1);

"outlying Acts" has the meaning prescribed under
section 84A(5);

"reviewable decision" means any decision referred to
under section 122(1);

"Tax Appeal Tribunal" means the Tribunal established
under section 24 of the Taxes Management Act 1976;
and

"Taxes Acts" means the Taxes Management Act 1976
and any statutory provision relating to the taxes to
which the Taxes Management Act 1976 applies.".

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Amendment of section 11
3 Section 11(1)(d) of the principal Act is amended by deleting the
words "at the highest current value of goods of the like description in
Bermuda, or at such current value as he considers equivalent to the
highest current value in Bermuda," and substituting the following
words

"in accordance with section 24 and the Second Schedule to this
Act,".

Amendment of section 14
4 Section 14(4) of the principal Act is amended by repealing
paragraph (c) and substituting the following paragraph

"(c) where the value of such goods is expressed in a currency
other than a currency which is for the time being legal
tender in Bermuda, the conversion of such value for the
purpose of calculating the duty (if any) falling to be paid
in respect of the importation of the goods shall be at the
rate of exchange determined in accordance with section
24 and the Second Schedule to this Act.".

Amendment of section 24
5 Section 24 of the principal Act is amended

(a) by repealing subsection (1) and substituting the
following subsection

"(1) Subject to any other Act, where the duties
payable on any goods imported into Bermuda, or taken
out of bond from any bonding warehouse, are charged
according to the value thereof, then such value ("the
customs value") shall, subject to subsections (3) and (4),
be ascertained in accordance with the Second
Schedule."; and

(b) by repealing subsections (3), (4), (5) and (6) and
substituting the following subsections

"(3) In subsection (1), the reference to duties payable
on goods imported into Bermuda includes a reference to
duties payable on goods removed from any sufferance
warehouse.

(4) The Minister may make regulations with respect
to customs value, derogating from or in addition to the

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Second Schedule as may be deemed necessary for the
protection of revenue in Bermuda.".

Repeal of section 25
6 Section 25 of the principal Act is repealed.

Repeal of section 35F
7 Section 35F of the principal Act is repealed.

Amendment of section 50
8 Section 50 of the principal Act is amended

(a) by deleting the word "building" wherever it occurs and
substituting the following word

"premises";

(b) in subsection (2)(a)

(i) by deleting the words "is a proper" and
substituting the following words

"are a proper"; and

(ii) by deleting the words "is not so situated" and
substituting the following words

"are not so situated";

(c) in subsection (3) by deleting the words "its situation" and
substituting the following words

"their situation"; and

(d) in subsection (5) by deleting the words "is no longer" and
substituting the following words

"are no longer".

Amendment of section 64
9 Section 64 of the principal Act is amended by deleting the word
"certificate" wherever it occurs and substituting the following word

"licence".

Amendment of section 65
10 Section 65 of the principal Act is amended by repealing
subsection (2) and substituting the following subsection

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"(2) If any goods which have been warehoused or otherwise
secured, either for home consumption or exportation are
clandestinely or illegally removed from or out of any warehouse
or place of security, then the owner or occupier of the warehouse
or place of security, the owner of the goods and any person
concerned in the removal of the goods, shall each forfeit the level
4 amount and all such goods shall be forfeited.".

Substitution of section 77
11 Section 77 of the principal Act is repealed and the following
section is substituted

"Refund of import duties paid by mistake or to give effect to
a relief
77 (1) Whenever any import duty or other money is paid by
mistake the Accountant-General, on it being proved to the
satisfaction of the Collector of Customs that the duty or other
money has been so paid by mistake, may refund to the person
who paid such duty or other money, or his lawful agent, the
amount so paid by mistake, if the duty or money is claimed and
proof of the mistake is made within six months after the
payment of such duty or other money.

(2) In order to give effect to any relief from import duty
afforded by or under any enactment, the Accountant-General, on
it being proved to the satisfaction of the Collector of Customs
that the person claiming the relief is entitled to the relief and
that the amount claimed is repayable, may refund to the person
claiming the relief the amount that is repayable.".

Repeal of section 78
12 Section 78 of the principal Act is repealed.

Amendment of section 82
13 Section 82 of the principal Act is amended in subsection (7) by
deleting the words ", at the election of the Collector of Customs, three
times the value of the goods" and substituting the following words

"three times the value of the goods, whichever is the greater
amount".

Insertion of section 84A
14 The principal Act is amended by inserting the following section
immediately after section 84 and under the heading "Offences"

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"The standard scale of penalties
84A (1) There shall be a standard scale of penalties, which
shall be known as "the standard scale".

(2) The standard scale shall be as set out in the Third
Schedule to this Act.

(3) Where any relevant enactment provides that a person
shall be liable to a fine, maximum fine, penalty or maximum
penalty by reference to an amount expressed to be of a certain
level, the enactment is to be construed as referring to the
amount, specified in the standard scale, relating to that level.

(4) In this section "relevant enactment" means any
provision of this Act or any provision of the outlying Acts.

(5) In this Act, the expression "outlying Acts" refers to any
of the following enactments

(a) Arms Exportation Act 1862 ("AEA");

(b) Bermuda Airport (Duty Free Sales) Act 1997
("BA(DFS)A");

(c) Bonding of Precious Stones Act 1952 ("BPSA");

(d) Customs Duty (Special Remission) Act 1951
("CD(SR)A");

(e) Consular Relations Act 1971 ("CRA");

(f) Historic Articles (Export Control) Act 1983
("HA(EC)A");

(g) Hotels Concession Act 2000 ("HCA");

(h) Hotels (Temporary Customs Duty Relief) Act
1991 ("H(TCDR)A");

(i) Immature Spirits Restriction Act 1921 ("ISRA");

(j) Post Office Act 1900 ("POA");

(k) Restaurants (Temporary Customs Duty Relief)
Act 2002 ("R(TCDR)A");

(l) Spirits Act 1890 ("SA"); and

(m) Sufferance Warehouse Act 1875 ("SWA").

(6) If it appears to the Minister of Finance that there has been
a change in the value of money since the relevant date, he may
by Order, substitute for the amounts specified in the Third

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Schedule, such amount or amounts as appear to him justified by
the change.

(7) In subsection (6) the "relevant date" means

(a) the date of the coming into force of this section; or

(b) where the amounts specified in the Third Schedule have
been substituted by an Order under subsection (6), the
date of that Order.

(8) An Order made under subsection (6)

(a) shall be made subject to the negative resolution
procedure; and

(b) shall not affect any punishment for an offence
committed before that Order comes into force.".

Substitution of section 111A
15 The principal Act is amended by repealing section 111A and
substituting the following section

"Collector of Customs may assess and restore
111A (1) Instead of taking proceedings under section 111
against any person who is liable to a civil penalty, the Collector
of Customs, or the proper officer, may assess an amount due by
way of civil penalty up to the maximum amount of the level
prescribed by this Act or the relevant outlying Act and notify the
person liable to the penalty accordingly.

(2) If an amount has been assessed as due from any
person and the person has been notified in accordance with this
section, then unless, or except to the extent that, the assessment
has subsequently been withdrawn or reduced, that amount
shall, subject to any appeal under section 122B, be recoverable
as if it were an amount of duty due from that person as an
amount of the appropriate duty.

(3) The Collector of Customs or the proper officer may
restore, subject to such conditions as the Collector of Customs
considers appropriate, anything forfeited or seized by the
Collector of Customs under any provision of this Act or an
outlying Act.

(4) In this Act, "civil penalty" means any penalty or
forfeiture which may be incurred under this Act or an outlying

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Act for an offence that is punishable neither on summary
conviction nor on conviction on indictment.".

Repeal of section 122 and insertion of review and appeal provisions
16 The principal Act is amended by repealing section 122 and
substituting the following sections

"Reviews and Appeals

Requirement for review of a decision
122 (1) Subject to subsection (10), this section applies to

(a) any decision by the Collector of Customs, in
relation to any relevant duty, as to

(i) whether or not, and at what time,
anything is charged in any case with any
such duty;

(ii) the rate at which any such duty is
charged in any case, or the amount
charged;

(iii) the person liable in any case to pay any
amount charged, or the amount of his
liability; or

(iv) whether or not any person is entitled in
any case to relief or to any repayment,
remission or drawback of any such duty,
or the amount of the relief, repayment,
remission or drawback to which any
person is entitled;

(b) any decision by the Collector of Customs or a
proper officer that a person is liable to any civil
penalty under any enactment, or as to the
amount of his liability, as contained in any
assessment under section 111A; or

(c) any decision by the Collector of Customs or any
proper officer which is of a description specified
in the Fourth Schedule to this Act.

(2) Any person who is

(a) a person whose liability to pay any relevant duty
or penalty is determined by, results from or is or

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will be affected by any decision to which this
section applies;

(b) a person in relation to whom, or on whose
application, such a decision has been made; or

(c) a person on or to whom the conditions,
limitations, restrictions, prohibitions or other
requirements to which such a decision relates or
are to be imposed or applied,

may by notice in writing to the Collector of Customs require him
to review that decision.

(3) The Collector of Customs shall not be required under
this section to review any decision unless the notice requiring
the review is given before the end of the period of thirty days
beginning with the day on which written notification of the
decision, or of the assessment containing the decision, was first
given to the person requiring the review.

(4) For the purposes of subsection (3) it shall be the duty
of the Collector of Customs to give written notification of any
decision to which this section applies to any person who

(a) requests such a notification;

(b) has not previously been given written
notification of that decision; and

(c) if given such a notification, will be entitled to
require a review of the decision under this
section.

(5) The Collector of Customs shall not be required under
this section to review any decision falling within subsection (1)(a)
if any amount is outstanding from the person requiring the
review in respect of any liability of that person to pay any
relevant duty to the Collector of Customs (including an amount
of any such duty which would be so outstanding if the appeal
had already been decided in favour of the Collector of Customs)
unless

(a) the Collector of Customs has, on the application
of the person requiring the review, issued a
certificate stating either

(i) that such security as appears to him to be
adequate has been given to him for the
payment of that amount; or

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(ii) that, on grounds of the hardship that
would otherwise be suffered by the person
requiring the review, he either does not
require the giving of security for the
payment of that amount or has accepted
such lesser security as he considers
appropriate; or

(b) the Tax Appeal Tribunal decides that the
Collector of Customs should not have refused to
issue a certificate under paragraph (a) and is
satisfied that such security (if any) as it would
have been reasonable for the Collector of
Customs to accept in the circumstances has
been given to the Collector of Customs.

(6) A person is entitled to give a notice under this section
requiring a decision to be reviewed for a second or subsequent
time only if

(a) the grounds on which he requires the further
review are that the Collector of Customs did not,
on any previous review, have the opportunity to
consider certain facts or other matters; and

(b) he does not, on the further review, require the
Collector of Customs to consider any facts or
matters which were considered on a previous
review except in so far as they are relevant to
any issue to which the facts or matters not
previously considered relate.

(7) If it appears to the Minister of Finance that there is a
decision to be made for the purposes of

(a) this Act, the Customs Tariff Act 1970 or the
outlying Acts; or

(b) any Act or statutory instrument enacted for the
purpose of implementing those Acts,

which are not decisions to which this section applies, the
Minister may by regulations provide for this section to apply to
decisions of that description as it applies to the decisions
mentioned in subsection (1).

(8) Regulations under subsection (7) shall be subject to
the negative resolution procedure and may

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(a) provide, in relation to any description of
decisions to which this section is applied by any
such regulations, that section 122B(3) shall
have effect as if those decisions were of a
description specified in the Fourth Schedule to
this Act; and

(b) make such other incidental, supplemental,
consequential and transitional provisions as the
Minister thinks fit.

(9) In this section "relevant duty" means any import duty
or export duty under the Customs Tariff Act 1970.

(10) This section does not apply to decisions made on a
review under this section.

Review procedure
122A (1) Where the Collector of Customs is required in
accordance with this Act to review any decision, it shall be his
duty to do so and he may, in that review, either

(a) confirm the decision; or

(b) withdraw or vary the decision and take such
further steps (if any) in consequence of the
withdrawal or variation as he may consider
appropriate.

(2) Where

(a) it is the duty of the Collector of Customs in
pursuance of a requirement by any person
under section 122, to review any decision; and

(b) he does not, within the period of thirty days
beginning with the day on which the review was
required, give notice to that person of his
determination on the review;

he shall be assumed for the purposes of this Act to have
confirmed the decision.

(3) The person requiring the review and the Collector of
Customs shall each bear their own costs of the review.

Appeals to the Tax Appeal Tribunal
122B (1) Subject to this section, an appeal in respect of

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(a) any decision by the Collector of Customs on a
review under section 122A (including a deemed
confirmation under subsection (2) of that
section);

(b) any decision by the Collector of Customs on a
review of a decision to which section 122 applies
as the Collector of Customs has agreed to
undertake in consequence of a request made
after the end of the period mentioned in section
122(3); or

(c) any decision by the Collector of Customs
refusing to issue a certificate under section
122(5);

shall lie to the Tax Appeal Tribunal.

(2) An appeal under this section shall not be entertained
unless the appellant is the person who requested the review in
question.

(3) In relation to any decision as to an ancillary matter, or
any decision on the review of such a decision, the powers of an
appeal tribunal on an appeal under this section shall be
confined to a power, where the tribunal is satisfied that the
Collector of Customs or other person making that decision could
not reasonably have arrived at it, to do one or more of the
following

(a) direct that the decision, so far as it remains in
force, is to cease to have effect from such time as
the tribunal may direct;

(b) require the Collector of Customs to conduct, in
accordance with the directions of the tribunal, a
further review of the original decision; and

(c) in the case of a decision which has already been
acted on or taken effect and cannot be remedied
by a further review, to declare the decision to
have been unreasonable and to give directions to
the Collector of Customs as to the steps to be
taken for securing that repetitions of the
unreasonableness do not occur when similar
circumstances arise in future.

(4) In relation to other decisions, the powers of an appeal
tribunal on an appeal under this section shall also include power

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to quash or vary any decision and power to substitute their own
decision for any decision quashed on appeal.

(5) On an appeal under this section the burden of proof
shall lie upon the appellant to show that the grounds on which
any such appeal is brought have been established.

(6) References in this section to a decision as to an
ancillary matter are references to any decision of a description
specified in the Fourth Schedule to this Act which is not
comprised in a decision falling within section 122(1)(a) and (b).

Method of and time for appealing
122C A person who is dissatisfied with an appealable decision of
the Collector of Customs may, within thirty days after service on
him of notice of that decision, or after the date that the Collector
of Customs is assumed for the purposes of this Act to have
confirmed the reviewable decision, or within such further time as
the Tribunal may allow, by notice in writing accompanied by
such fee as may be prescribed under the Government Fees Act
1965, require the Collector of Customs to treat his notice as an
appeal and to forward it to the Tribunal and the Collector of
Customs shall, as soon as practicable, forward it accordingly.

Application of the Taxes Management Act 1976
122D (1) Subject to subsections (2), (3), (4), and (5) and section
122E, sections 26 to 29 of the Taxes Management Act 1976 and
the Tax Appeal Tribunal Procedure Regulations 1981 apply to
appeals against appealable decisions of the Collector of Customs
as they apply to appeals against decisions of the person
responsible under the Taxes Acts for the collection of the tax on
an objection under section 23 of the Taxes Management Act
1976.

(2) In sections 26 to 29 of the Taxes Management Act
1976 and the Tax Appeal Tribunal Procedure Regulations 1981,
with respect to appeals under section 122B, "Collector" means
the Collector of Customs.

(3) In the Tax Appeal Tribunal Procedure Regulations
1981, with respect to appeals under section 122B, "assessment"
includes any written notification of the reviewable decision.

(4) Every appeal shall be commenced by the appellant
serving upon the Collector of Customs a notice of appeal in Form
1C in the Fifth Schedule.

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(5) Notice of the hearing date of an appeal shall be given
in Form 2C in the Fifth Schedule.

Regulations pertaining to appealable decisions
122E The Minister of Finance may by regulations subject to the
negative resolution procedure make further modifications or
alternative or additional provisions for the purpose of the
practice and procedure of appeals against appealable decisions.".

Re designation of existing Schedule and insertion of other
Schedules
17 The principal Act is amended

(a) by designating the existing schedule as the First
Schedule; and

(b) by inserting the Schedules contained in the First
Schedule to this Act immediately after the First Schedule
to the principal Act.

Amendments relating to penalties
18 (1) The monetary amount specified in each provision listed in
each row of the first column of paragraph 1 of the Second Schedule to
this Act is deleted and the words specified in the second column of the
corresponding row of paragraph 1 of the Second Schedule to this Act are
substituted.

(2) In this section "monetary amount" means the amount of
any fine or other penalty expressed in Bermudian dollars in any
provision of this Act or the outlying Acts listed in paragraph 2 of the
Second Schedule to this Act.

Consequential amendments
19 The enactments specified in the Third Schedule to this Act are
amended in the manner indicated in that Schedule.

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FIRST SCHEDULE

(Section 17)

"SECOND SCHEDULE

(Sections 11, 14 and 24)

RULES ON CUSTOMS VALUATION

Part 1

1. The customs value of imported goods shall be the transaction
value, that is the price actually paid or payable for the goods when sold
for export to Bermuda adjusted in accordance with the provisions of Part
8, provided:

(a) that there are no restrictions as to the disposition or use
of the goods by the buyer other than restrictions which:

(i) are imposed or required by law or by the public
authorities in Bermuda;

(ii) limit the geographical area in which the goods
may be resold; or

(iii) do not substantially affect the value of the
goods;

(b) that the sale or price is not subject to some condition or
consideration for which a value cannot be determined
with respect to the goods being valued;

(c) that no part of the proceeds of any subsequent resale,
disposal or use of the goods by the buyer will accrue
directly or indirectly to the seller, unless an appropriate
adjustment can be made in accordance with the
provisions of Part 8; and

(d) that the buyer and seller are not related, or where the
buyer and seller are related, that the transaction value is
acceptable for customs purposes under the provisions of
paragraph 2.

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2. (a) In determining whether the transaction value is acceptable
for the purposes of paragraph 1, the fact that the buyer and the seller
are related within the meaning of Part 15 shall not in itself be grounds
for regarding the transaction value as unacceptable. In such case the
circumstances surrounding the sale shall be examined and the
transaction value shall be accepted provided that the relationship did not
influence the price. If, in the light of information provided by the
importer or otherwise, the proper officer has grounds for considering that
the relationship influenced the price, he shall communicate his grounds
to the importer and the importer shall be given a reasonable opportunity
to respond. If the importer so requests, the communication of the
grounds shall be in writing.

(b) In a sale between related persons, the transaction value
shall be accepted and the goods valued in accordance with the provisions
of paragraph 1 whenever the importer demonstrates that such value
closely approximates to one of the following occurring at or about the
same time:

(i) the transaction value in sales to unrelated
buyers of identical or similar goods for export to
the same country of importation;

(ii) the customs value of identical or similar goods
as determined under the provisions of Part 5;

(iii) the customs value of identical or similar goods
as determined under the provisions of Part 6;

In applying the foregoing tests, due account shall be
taken of demonstrated differences in commercial levels,
quantity levels, the elements enumerated in Part 8 and
costs incurred by the seller in sales in which the seller
and the buyer are not related that are not incurred by
the seller in sales in which the seller and the buyer are
related.

(c) The tests set forth in paragraph 2(b) are to be used at the
initiative of the importer and only for comparison purposes. Substitute
values may not be established under the provisions of paragraph 2(b).

Part 2

1. (a) If the customs value of the imported goods cannot be
determined under the provisions of Part 1, the customs value shall be
the transaction value of identical goods sold for export to Bermuda and
exported at or about the same time as the goods being valued.

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(b) In applying this Part, the transaction value of identical
goods in a sale at the same commercial level and in substantially the
same quantity as the goods being valued shall be used to determine the
customs value. Where no such sale is found, the transaction value of
identical goods sold at a different commercial level and/or in different
quantities, adjusted to take account of differences attributable to
commercial level and/or to quantity, shall be used, provided that such
adjustments can be made on the basis of demonstrated evidence which
clearly establishes the reasonableness and accuracy of the adjustment,
whether the adjustment leads to an increase or a decrease in the value.

2. (number not used)

3. If, in applying this Part, more than one transaction value of
identical goods is found, the lowest such value shall be used to
determine the customs value of the imported goods.

Part 3

1. (a) If the customs value of the imported goods cannot be
determined under the provisions of Parts 1 and 2, the customs value
shall be the transaction value of similar goods sold for export to
Bermuda and exported at or about the same time as the goods being
valued.

(b) In applying this Part, the transaction value of similar goods
in a sale at the same commercial level and in substantially the same
quantity as the goods being valued shall be used to determine the
customs value. Where no such sale is found, the transaction value of
similar goods sold at a different commercial level and/or in different
quantities, adjusted to take account of differences attributable to
commercial level and/or to quantity, shall be used, provided that such
adjustments can be made on the basis of demonstrated evidence which
clearly establishes the reasonableness and accuracy of the adjustment,
whether the adjustment leads to an increase or a decrease in the value.

2. (number not used)

3. If, in applying this Part, more than one transaction value of
similar goods is found, the lowest such value shall be used to determine
the customs value of the imported goods.

Part 4

If the customs value of the imported goods cannot be determined
under the provisions of Parts 1, 2 and 3, the customs value shall be
determined under the provisions of Part 5 or, when the customs value
cannot be determined under that Part, under the provisions of Part 6

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except that, at the request of the importer, the order of application of
Parts 5 and 6 shall be reversed.

Part 5

1. (a) If the imported goods or identical or similar imported goods
are sold in Bermuda in the condition as imported, the customs value of
the imported goods under the provisions of this Part shall be based on
the unit price at which the imported goods or identical or similar
imported goods are so sold in the greatest aggregate quantity, at or about
the time of the importation of the goods being valued, to persons who are
not related to the persons from whom they buy such goods, subject to
deductions for the following:

(i) either the commissions usually paid or agreed to
be paid or the additions usually made for profit
and general expenses in connection with sales in
Bermuda of the same class or kind;

(ii) the usual costs of transport and insurance and
associated costs incurred within Bermuda;

(iii) the costs and charges referred to in paragraph 2
of Part 8; and

(iv) the customs duties and other national taxes
payable in Bermuda by reason of the
importation or sale of the goods.

(b) If neither the imported goods nor identical nor similar
imported goods are sold at or about the time of importation of the goods
being valued, the customs value shall, subject otherwise to the
provisions of paragraph 1(a), be based on the unit price at which the
imported goods or identical or similar imported goods are sold in
Bermuda in the condition as imported at the earliest date after the
importation of the goods being valued but before the expiration of 90
days after such importation.

2. If neither the imported goods nor identical nor similar imported
goods are sold in Bermuda in the condition as imported, then, if the
importer so requests, the customs value shall be based on the unit price
at which the imported goods, after further processing, are sold in the
greatest aggregate quantity to persons in Bermuda who are not related to
the persons from whom they buy such goods, due allowance being made
for the value added by such processing and the deductions provided for
in paragraph 1(a).

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Part 6

1. The customs value of imported goods under the provisions of
this Part shall be based on a computed value. Computed value shall
consist of the sum of:

(a) the cost or value of materials and fabrication or other
processing employed in producing the imported goods;

(b) an amount for profit and general expenses equal to that
usually reflected in sales of goods of the same class or
kind as the goods being valued which are made by
producers in the country of exportation for export to
Bermuda.

2. No proper officer may require or compel any person not resident
in Bermuda to produce for examination, or to allow access to, any
account or other record for the purposes of determining a computed
value. However, information supplied by the producer of the goods for
the purposes of determining the customs value under the provisions of
this Part may be verified in another country by the Collector of Customs
with the agreement of the producer and provided the Collector of
Customs gives sufficient advance notice to the government of the country
in question and the latter does not object to the investigation.

Part 7

1. If the customs value of the imported goods cannot be determined
under the provisions of Parts 1 through 6, inclusive, the customs value
shall be determined using reasonable means consistent with the
principles and general provisions of The Agreement on Implementation of
Article VII of the General Agreement on Tariffs and Trade 1994 and of
Article VII of GATT 1994 and on the basis of data available in Bermuda.

2. No customs value shall be determined under the provisions of
this Part on the basis of:

(a) the selling price in Bermuda of goods produced in
Bermuda;

(b) a system which provides for the acceptance for customs
purposes of the higher of two alternative values;

(c) the price of goods on the domestic market of the country
of exportation;

(d) the cost of production other than computed values
which have been determined for identical or similar
goods in accordance with the provisions of Part 6;

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(e) the price of the goods for export to a country other than
Bermuda;

(f) minimum customs values; or

(g) arbitrary or fictitious values.

3. If the importer so requests, the importer shall be informed in
writing of the customs value determined under the provisions of this Part
and the method used to determine such value.

Part 8

1. In determining the customs value under the provisions of Part 1,
there shall be added to the price actually paid or payable for the
imported goods:

(a) the following, to the extent that they are incurred by the
buyer but are not included in the price actually paid or
payable for the goods:

(i) commissions and brokerage, except buying
commissions;

(ii) the cost of containers which are treated as being
one for customs purposes with the goods in
question;

(iii) the cost of packing whether for labour or
materials;

(b) the value, apportioned as appropriate, of the following
goods and services where supplied directly or indirectly
by the buyer free of charge or at reduced cost for use in
connection with the production and sale for export of the
imported goods, to the extent that such value has not
been included in the price actually paid or payable:

(i) materials, components, parts and similar items
incorporated in the imported goods;

(ii) tools, dies, moulds and similar items used in the
production of the imported goods;

(iii) materials consumed in the production of the
imported goods;

(iv) engineering, development, artwork, design work,
and plans and sketches undertaken elsewhere
than in Bermuda and necessary for the
production of the imported goods;

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(c) royalties and licence fees related to the goods being
valued that the buyer must pay, either directly or
indirectly, as a condition of sale of the goods being
valued, to the extent that such royalties and fees are not
included in the price actually paid or payable;

(d) the value of any part of the proceeds of any subsequent
resale, disposal or use of the imported goods that
accrues directly or indirectly to the seller.

2. The following shall be excluded from the customs value:

(a) the cost of transport of the imported goods to the port or
place of importation;

(b) loading, unloading and handling charges associated with
the transport of the imported goods to the port or place
of importation; and

(c) the cost of insurance.

3. Additions to the price actually paid or payable shall be made
under this Part only on the basis of objective and quantifiable data.

4. No additions shall be made to the price actually paid or payable
in determining the customs value except as provided in this Part.

Part 9

1. Where the conversion of currency is necessary for the
determination of the customs value, the rate of exchange to be used shall
be that duly published by the Collector of Customs and shall reflect as
effectively as possible, in respect of the period covered by each such
document of publication, the current value of such currency in
commercial transactions in terms of the currency of Bermuda.

2. The conversion rate to be used shall be that in effect at the time
of entry of goods for Customs purposes.

Part 10

All information which is by nature confidential or which is
provided on a confidential basis for the purposes of customs valuation
shall be treated as strictly confidential by the Collector of Customs who
shall not disclose it without the specific permission of the person or
government providing such information, except to the extent that it may
be required to be disclosed in the context of judicial proceedings.

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Parts 11 to 13 (numbers not used)

Part 14

The notes at the Annex to this Schedule form an integral part of
this Schedule and the Parts of this Schedule are to be read and applied
in conjunction with their respective notes.

Part 15

1. In this Schedule:

(a) "customs value of imported goods" means the value of
goods for the purposes of levying ad valorem duties of
customs on imported goods; and

(b) "produced" includes grown, manufactured and mined.

2. In this Schedule:

(a) "identical goods" means goods which are the same in all
respects, including physical characteristics, quality and
reputation. Minor differences in appearance would not
preclude goods otherwise conforming to the definition
from being regarded as identical;

(b) "similar goods" means goods which, although not alike
in all respects, have like characteristics and like
component materials which enable them to perform the
same functions and to be commercially interchangeable.
The quality of the goods, their reputation and the
existence of a trademark are among the factors to be
considered in determining whether goods are similar;

(c) the terms "identical goods" and "similar goods" do not
include, as the case may be, goods which incorporate or
reflect engineering, development, artwork, design work,
and plans and sketches for which no adjustment has
been made under paragraph 1(b)(iv) of Part 8 because
such elements were undertaken in Bermuda;

(d) goods shall not be regarded as "identical goods" or
"similar goods" unless they were produced in the same
country as the goods being valued;

(e) goods produced by a different person shall be taken into
account only when there are no identical goods or
similar goods, as the case may be, produced by the same
person as the goods being valued.

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3. In this Schedule "goods of the same class or kind" means goods
which fall within a group or range of goods produced by a particular
industry or industry sector, and includes identical or similar goods.

4. For the purposes of this Schedule, persons shall be deemed to be
related only if:

(a) they are officers or directors of one another's businesses;

(b) they are legally recognized partners in business;

(c) they are employer and employee;

(d) any person directly or indirectly owns, controls or holds
5 per cent or more of the outstanding voting stock or
shares of both of them;

(e) one of them directly or indirectly controls the other;

(f) both of them are directly or indirectly controlled by a
third person;

(g) together they directly or indirectly control a third person;
or

(h) they are members of the same family.

5. Persons who are associated in business with one another in that
one is the sole agent, sole distributor or sole concessionaire, however
described, of the other shall be deemed to be related for the purposes of
this Schedule if they fall within the criteria of paragraph 4.

Part 16

Upon written request, the importer shall have the right to an
explanation in writing from the proper officer as to how the customs
value of the importer’s goods was determined.

Part 17

Nothing in this Schedule shall be construed as restricting or calling into
question the rights of the proper officer to satisfy himself as to the truth
or accuracy of any statement, document or declaration presented for
customs valuation purposes.

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INTERPRETATIVE NOTES

General Note

Sequential Application of Valuation Methods

1. Parts 1 through 7 define how the customs value of imported
goods is to be determined under the provisions of this Schedule. The
methods of valuation are set out in a sequential order of application. The
primary method for customs valuation is defined in Part 1 and imported
goods are to be valued in accordance with the provisions of this Part
whenever the conditions prescribed therein are fulfilled.

2. Where the customs value cannot be determined under the
provisions of Part 1, it is to be determined by proceeding sequentially
through the succeeding Parts to the first such Part under which the
customs value can be determined. Except as provided in Part 4, it is
only when the customs value cannot be determined under the provisions
of a particular Part that the provisions of the next Part in the sequence
can be used.

3. If the importer does not request that the order of Parts 5 and 6
be reversed, the normal order of the sequence is to be followed. If the
importer does so request but it then proves impossible to determine the
customs value under the provisions of Part 6, the customs value is to be
determined under the provisions of Part 5, if it can be so determined.

4. Where the customs value cannot be determined under the
provisions of Parts 1 through 6 it is to be determined under the
provisions of Part 7.

Use of Generally Accepted Accounting Principles

1. "Generally accepted accounting principles" refers to the
recognized consensus or substantial authoritative support within a
country at a particular time as to which economic resources and
obligations should be recorded as assets and liabilities, which changes in
assets and liabilities should be recorded, how the assets and liabilities
and changes in them should be measured, what information should be
disclosed and how it should be disclosed, and which financial statements
should be prepared. These standards may be broad guidelines of general
application as well as detailed practices and procedures.

2. For the purposes of this Schedule, the proper officer shall utilize
information prepared in a manner consistent with generally accepted
accounting principles in the country which is appropriate for the Part in
question. For example, the determination of usual profit and general

REVENUE AMENDMENT ACT 2004

25

expenses under the provisions of Part 5 would be carried out utilizing
information prepared in a manner consistent with generally accepted
accounting principles of Bermuda. On the other hand, the
determination of usual profit and general expenses under the provisions
of Part 6 would be carried out utilizing information prepared in a manner
consistent with generally accepted accounting principles of the country
of production. As a further example, the determination of an element
provided for in paragraph 1(b)(ii) of Part 8 undertaken in Bermuda would
be carried out utilizing information in a manner consistent with the
generally accepted accounting principles of Bermuda.

Note to Part 1

Price Actually Paid or Payable

1. The price actually paid or payable is the total payment made or
to be made by the buyer to or for the benefit of the seller for the imported
goods. The payment need not necessarily take the form of a transfer of
money. Payment may be made by way of letters of credit or negotiable
instruments. Payment may be made directly or indirectly. An example
of an indirect payment would be the settlement by the buyer, whether in
whole or in part, of a debt owed by the seller.

2. Activities undertaken by the buyer on the buyer's own account,
other than those for which an adjustment is provided in Part 8, are not
considered to be an indirect payment to the seller, even though they
might be regarded as of benefit to the seller. The costs of such activities
shall not, therefore, be added to the price actually paid or payable in
determining the customs value.

3. The customs value shall not include the following charges or
costs, provided that they are distinguished from the price actually paid
or payable for the imported goods:

(a) charges for construction, erection, assembly,
maintenance or technical assistance, undertaken after
importation on imported goods such as industrial plant,
machinery or equipment;

(b) the cost of transport after importation;

(c) duties and taxes of Bermuda.

4. The price actually paid or payable refers to the price for the
imported goods. Thus the flow of dividends or other payments from the
buyer to the seller that do not relate to the imported goods are not part of
the customs value.

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5. The price actually paid or payable includes all payments actually
made or to be made as a condition of sale of the imported goods, by the
buyer to the seller, or by the buyer to a third party to satisfy an
obligation of the seller.

Paragraph 1(a)(iii)

Among restrictions which would not render a price actually paid
or payable unacceptable are restrictions which do not substantially affect
the value of the goods. An example of such restrictions would be the
case where a seller requires a buyer of automobiles not to sell or exhibit
them prior to a fixed date which represents the beginning of a model
year.

Paragraph 1(b)

1. If the sale or price is subject to some condition or consideration
for which a value cannot be determined with respect to the goods being
valued, the transaction value shall not be acceptable for customs
purposes. Some examples of this include:

(a) the seller establishes the price of the imported goods on
condition that the buyer will also buy other goods in
specified quantities;

(b) the price of the imported goods is dependent upon the
price or prices at which the buyer of the imported goods
sells other goods to the seller of the imported goods;

(c) the price is established on the basis of a form of
payment extraneous to the imported goods, such as
where the imported goods are semi-finished goods which
have been provided by the seller on condition that the
seller will receive a specified quantity of the finished
goods.

2. However, conditions or considerations relating to the production
or marketing of the imported goods shall not result in rejection of the
transaction value. For example, the fact that the buyer furnishes the
seller with engineering and plans undertaken in Bermuda shall not
result in rejection of the transaction value for the purposes of Part 1.
Likewise, if the buyer undertakes on the buyer’s own account, even
though by agreement with the seller, activities relating to the marketing
of the imported goods, the value of these activities is not part of the
customs value nor shall such activities result in rejection of the
transaction value.

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Paragraph 2

1. Paragraphs 2(a) and 2(b) provide different means of establishing
the acceptability of a transaction value.

2. Paragraph 2(a) provides that where the buyer and the seller are
related, the circumstances surrounding the sale shall be examined and
the transaction value shall be accepted as the customs value provided
that the relationship did not influence the price. It is not intended that
there should be an examination of the circumstances in all cases where
the buyer and the seller are related. Such examination will only be
required where there are doubts about the acceptability of the price.
Where the proper officer has no doubts about the acceptability of the
price, it should be accepted without requesting further information from
the importer. For example, the proper officer may have previously
examined the relationship, or he may already have detailed information
concerning the buyer and the seller, and may already be satisfied from
such examination or information that the relationship did not influence
the price.

3. Where the proper officer is unable to accept the transaction
value without further inquiry, he should give the importer an opportunity
to supply such further detailed information as may be necessary to
enable him to examine the circumstances surrounding the sale. In this
context, the proper officer should be prepared to examine relevant
aspects of the transaction, including the way in which the buyer and
seller organize their commercial relations and the way in which the price
in question was arrived at, in order to determine whether the
relationship influenced the price. Where it can be shown that the buyer
and seller, although related under the provisions of Part 15, buy from
and sell to each other as if they were not related, this would demonstrate
that the price had not been influenced by the relationship. As an
example of this, if the price had been settled in a manner consistent with
the normal pricing practices of the industry in question or with the way
the seller settles prices for sales to buyers who are not related to the
seller, this would demonstrate that the price had not been influenced by
the relationship. As a further example, where it is shown that the price
is adequate to ensure recovery of all costs plus a profit which is
representative of the firm's overall profit realized over a representative
period of time (e.g. on an annual basis) in sales of goods of the same
class or kind, this would demonstrate that the price had not been
influenced.

4. Paragraph 2(b) provides an opportunity for the importer to
demonstrate that the transaction value closely approximates to a "test"
value previously accepted by the Collector of Customs and is therefore

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28 1989 Revision

acceptable under the provisions of Part 1. Where a test under paragraph
2(b) is met, it is not necessary to examine the question of influence under
paragraph 2(a). If the proper officer has already sufficient information to
be satisfied, without further detailed inquiries, that one of the tests
provided in paragraph 2(b) has been met, there is no reason for him to
require the importer to demonstrate that the test can be met. In
paragraph 2(b) the term "unrelated buyers" means buyers who are not
related to the seller in any particular case.

Paragraph 2(b)

A number of factors must be taken into consideration in
determining whether one value "closely approximates" to another value.
These factors include the nature of the imported goods, the nature of the
industry itself, the season in which the goods are imported, and, whether
the difference in values is commercially significant. Since these factors
may vary from case to case, it would be impossible to apply a uniform
standard such as a fixed percentage, in each case. For example, a small
difference in value in a case involving one type of goods could be
unacceptable while a large difference in a case involving another type of
goods might be acceptable in determining whether the transaction value
closely approximates to the "test" values set forth in paragraph 2(b) of
Part 1.

Note to Part 2

1. In applying Part 2, the proper officer shall, wherever possible,
use a sale of identical goods at the same commercial level and in
substantially the same quantities as the goods being valued. Where no
such sale is found, a sale of identical goods that takes place under any
one of the following three conditions may be used:

(a) a sale at the same commercial level but in different
quantities;

(b) a sale at a different commercial level but in substantially
the same quantities; or

(c) a sale at a different commercial level and in different
quantities.

2. Having found a sale under any one of these three conditions
adjustments will then be made, as the case may be, for:

(a) quantity factors only;

(b) commercial level factors only; or

(c) both commercial level and quantity factors.

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3. The expression "and/or" allows the flexibility to use the sales and
make the necessary adjustments in any one of the three conditions
described above.

4. For the purposes of Part 2, the transaction value of identical
imported goods means a customs value, adjusted as provided for in
paragraphs 1(b) and 2, which has already been accepted under Part 1.

5. A condition for adjustment because of different commercial levels
or different quantities is that such adjustment, whether it leads to an
increase or a decrease in the value, be made only on the basis of
demonstrated evidence that clearly establishes the reasonableness and
accuracy of the adjustments, e.g. valid price lists containing prices
referring to different levels or different quantities. As an example of this,
if the imported goods being valued consist of a shipment of 10 units and
the only identical imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the seller grants
quantity discounts, the required adjustment may be accomplished by
resorting to the seller's price list and using that price applicable to a sale
of 10 units. This does not require that a sale had to have been made in
quantities of 10 as long as the price list has been established as being
bona fide through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value under
the provisions of Part 2 is not appropriate.

Note to Part 3

1. In applying Part 3, the proper officer shall, wherever possible,
use a sale of similar goods at the same commercial level and in
substantially the same quantities as the goods being valued. Where no
such sale is found, a sale of similar goods that takes place under any one
of the following three conditions may be used:

(a) a sale at the same commercial level but in different
quantities;

(b) a sale at a different commercial level but in substantially
the same quantities; or

(c) a sale at a different commercial level and in different
quantities.

2. Having found a sale under any one of these three conditions
adjustments will then be made, as the case may be, for:

(a) quantity factors only;

(b) commercial level factors only; or

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30 1989 Revision

(c) both commercial level and quantity factors.

3. The expression "and/or" allows the flexibility to use the sales and
make the necessary adjustments in any one of the three conditions
described above.

4. For the purpose of Part 3, the transaction value of similar
imported goods means a customs value, adjusted as provided for in
paragraph 1(b), which has already been accepted under Part 1.

5. A condition for adjustment because of different commercial levels
or different quantities is that such adjustment, whether it leads to an
increase or a decrease in the value, be made only on the basis of
demonstrated evidence that clearly establishes the reasonableness and
accuracy of the adjustment, e.g. valid price lists containing prices
referring to different levels or different quantities. As an example of this,
if the imported goods being valued consist of a shipment of 10 units and
the only similar imported goods for which a transaction value exists
involved a sale of 500 units, and it is recognized that the seller grants
quantity discounts, the required adjustment may be accomplished by
resorting to the seller's price list and using that price applicable to a sale
of 10 units. This does not require that a sale had to have been made in
quantities of 10 as long as the price list has been established as being
bona fide through sales at other quantities. In the absence of such an
objective measure, however, the determination of a customs value under
the provisions of Part 3 is not appropriate.

Note to Part 5

1. The term "unit price at which ... goods are sold in the greatest
aggregate quantity" means the price at which the greatest number of
units is sold in sales to persons who are not related to the persons from
whom they buy such goods at the first commercial level after importation
at which such sales take place.

2. As an example of this, goods are sold from a price list which
grants favourable unit prices for purchases made in larger quantities.

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31

Sale
quantity

Unit
price

Number of sales Total quantity
sold at each price

1-10 units 100 10 sales of 5 units

5 sales of 3 units

65

11-25 units 95 5 sales of 11 units 55

over 25 units 90 1 sale of 30 units

1 sale of 50 units

80

The greatest number of units sold at a price is 80; therefore, the unit
price in the greatest aggregate quantity is 90.

3. As another example of this, two sales occur. In the first sale 500
units are sold at a price of 95 currency units each. In the second sale
400 units are sold at a price of 90 currency units each. In this example,
the greatest number of units sold at a particular price is 500; therefore,
the unit price in the greatest aggregate quantity is 95.

4. A third example would be the following situation where various
quantities are sold at various prices.

(a) Sales

Sale quantity Unit price

40 units 100

30 units 90

15 units 100

50 units 95

25 units 105

35 units 90

5 units 100

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(b) Totals

Total quantity sold Unit price

65 90

50 95

60 100

25 105

In this example, the greatest number of units sold at a particular price is
65; therefore, the unit price in the greatest aggregate quantity is 90.

5. Any sale in Bermuda, as described in paragraph 1 above, to a
person who supplies directly or indirectly free of charge or at reduced
cost for use in connection with the production and sale for export of the
imported goods any of the elements specified in paragraph 1(b) of Part 8,
should not be taken into account in establishing the unit price for the
purposes of Part 5.

6. It should be noted that "profit and general expenses" referred to
in paragraph 1 of Part 5 should be taken as a whole. The figure for the
purposes of this deduction should be determined on the basis of
information supplied by or on behalf of the importer unless the
importer's figures are inconsistent with those obtained in sales in
Bermuda of imported goods of the same class or kind. Where the
importer's figures are inconsistent with such figures, the amount for
profit and general expenses may be based upon relevant information
other than that supplied by or on behalf of the importer.

7. The "general expenses" include the direct and indirect costs of
marketing the goods in question.

8. Local taxes payable by reason of the sale of the goods for which a
deduction is not made under the provisions of paragraph 1(a)(iv) of
Part 5 shall be deducted under the provisions of paragraph 1(a)(i) of
Part 5.

9. In determining either the commissions or the usual profits and
general expenses under the provisions of paragraph 1 of Part 5, the
question whether certain goods are "of the same class or kind" as other
goods must be determined on a case-by-case basis by reference to the
circumstances involved. Sales in Bermuda of the narrowest group or
range of imported goods of the same class or kind, which includes the
goods being valued, for which the necessary information can be

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33

provided, should be examined. For the purposes of Part 5, "goods of the
same class or kind" includes goods imported from the same country as
the goods being valued as well as goods imported from other countries.

10. For the purposes of paragraph 1(b) of Part 5, the "earliest date"
shall be the date by which sales of the imported goods or of identical or
similar imported goods are made in sufficient quantity to establish the
unit price.

11. Where the method in paragraph 2 of Part 5 is used, deductions
made for the value added by further processing shall be based on
objective and quantifiable data relating to the cost of such work.
Accepted industry formulas, recipes, methods of construction, and other
industry practices would form the basis of the calculations.

12. It is recognized that the method of valuation provided for in
paragraph 2 of Part 5 would normally not be applicable when, as a result
of the further processing, the imported goods lose their identity.
However, there can be instances where, although the identity of the
imported goods is lost, the value added by the processing can be
determined accurately without unreasonable difficulty. On the other
hand, there can also be instances where the imported goods maintain
their identity but form such a minor element in the goods sold in
Bermuda that the use of this valuation method would be unjustified. In
view of the above, each situation of this type must be considered on a
case-by-case basis.

Note to Part 6

1. As a general rule, customs value is determined under this
Schedule on the basis of information readily available in Bermuda. In
order to determine a computed value, however, it may be necessary to
examine the costs of producing the goods being valued and other
information which has to be obtained from outside Bermuda.
Furthermore, in most cases the producer of the goods will be outside the
jurisdiction of Bermuda. The use of the computed value method will
generally be limited to those cases where the buyer and seller are related,
and the producer is prepared to supply to the Collector of Customs the
necessary costings and to provide facilities for any subsequent
verification which may be necessary.

2. The "cost or value" referred to in paragraph 1(a) of Part 6 is to be
determined on the basis of information relating to the production of the
goods being valued supplied by or on behalf of the producer. It is to be
based upon the commercial accounts of the producer, provided that such
accounts are consistent with the generally accepted accounting
principles applied in the country where the goods are produced.

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34 1989 Revision

3. The "cost or value" shall include the cost of elements specified in
paragraphs 1(a)(ii) and (iii) of Part 8. It shall also include the value,
apportioned as appropriate under the provisions of the relevant note to
Part 8, of any element specified in paragraph 1(b) of Part 8 which has
been supplied directly or indirectly by the buyer for use in connection
with the production of the imported goods. The value of the elements
specified in paragraph 1(b)(iv) of Part 8 which are undertaken in
Bermuda shall be included only to the extent that such elements are
charged to the producer. It is to be understood that no cost or value of
the elements referred to in this paragraph shall be counted twice in
determining the computed value.

4. The "amount for profit and general expenses" referred to in
paragraph 1(b) of Part 6 is to be determined on the basis of information
supplied by or on behalf of the producer unless the producer's figures
are inconsistent with those usually reflected in sales of goods of the same
class or kind as the goods being valued which are made by producers in
the country of exportation for export to Bermuda.

5. It should be noted in this context that the "amount for profit and
general expenses" has to be taken as a whole. It follows that if, in any
particular case, the producer's profit figure is low and the producer's
general expenses are high, the producer's profit and general expenses
taken together may nevertheless be consistent with that usually reflected
in sales of goods of the same class or kind. Such a situation might
occur, for example, if a product were being launched in Bermuda and the
producer accepted a nil or low profit to offset high general expenses
associated with the launch. Where the producer can demonstrate a low
profit on sales of the imported goods because of particular commercial
circumstances, the producer's actual profit figures should be taken into
account provided that the producer has valid commercial reasons to
justify them and the producer's pricing policy reflects usual pricing
policies in the branch of industry concerned. Such a situation might
occur, for example, where producers have been forced to lower prices
temporarily because of an unforeseeable drop in demand, or where they
sell goods to complement a range of goods being produced in Bermuda
and accept a low profit to maintain competitivity. Where the producer's
own figures for profit and general expenses are not consistent with those
usually reflected in sales of goods of the same class or kind as the goods
being valued which are made by producers in the country of exportation
for export to Bermuda, the amount for profit and general expenses may
be based upon relevant information other than that supplied by or on
behalf of the producer of the goods.

6. Where information other than that supplied by or on behalf of
the producer is used for the purposes of determining a computed value,
the proper officer shall inform the importer, if the latter so requests, of

REVENUE AMENDMENT ACT 2004

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the source of such information, the data used and the calculations based
upon such data, subject to the provisions of Part 10.

7. The "general expenses" referred to in paragraph 1(b) of Part 6
covers the direct and indirect costs of producing and selling the goods for
export which are not included under paragraph 1(a) of Part 6.

8. Whether certain goods are "of the same class or kind" as other
goods must be determined on a case-by-case basis with reference to the
circumstances involved. In determining the usual profits and general
expenses under the provisions of Part 6, sales for export to Bermuda of
the narrowest group or range of goods, which includes the goods being
valued, for which the necessary information can be provided, should be
examined. For the purposes of Part 6, "goods of the same class or kind"
must be from the same country as the goods being valued.

Note to Part 7

1. Customs values determined under the provisions of Part 7
should, to the greatest extent possible, be based on previously
determined customs values.

2. The methods of valuation to be employed under Part 7 should be
those laid down in Parts 1 through 6 but a reasonable flexibility in the
application of such methods would be in conformity with the aims and
provisions of Part 7.

3. Some examples of reasonable flexibility are as follows:

(a) Identical goods - the requirement that the identical goods
should be exported at or about the same time as the
goods being valued could be flexibly interpreted;
identical imported goods produced in a country other
than the country of exportation of the goods being
valued could be the basis for customs valuation;
customs values of identical imported goods already
determined under the provisions of Parts 5 and 6 could
be used.

(b) Similar goods - the requirement that the similar goods
should be exported at or about the same time as the
goods being valued could be flexibly interpreted; similar
imported goods produced in a country other than the
country of exportation of the goods being valued could
be the basis for customs valuation; customs values of
similar imported goods already determined under the
provisions of Parts 5 and 6 could be used.

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(c) Deductive method - the requirement that the goods shall
have been sold in the "condition as imported" in
paragraph 1(a) of Part 5 could be flexibly interpreted; the
"90 days" requirement could be administered flexibly.

Note to Part 8

Paragraph 1(a)(i)

The term "buying commissions" means fees paid by an importer
to the importer's agent for the service of representing the importer
abroad in the purchase of the goods being valued.

Paragraph 1(b)(ii)

1. There are two factors involved in the apportionment of the
elements specified in paragraph 1(b)(ii) of Part 8 to the imported goods -
the value of the element itself and the way in which that value is to be
apportioned to the imported goods. The apportionment of these elements
should be made in a reasonable manner appropriate to the
circumstances and in accordance with generally accepted accounting
principles.

2. Concerning the value of the element, if the importer acquires the
element from a seller not related to the importer at a given cost, the value
of the element is that cost. If the element was produced by the importer
or by a person related to the importer, its value would be the cost of
producing it. If the element had been previously used by the importer,
regardless of whether it had been acquired or produced by such
importer, the original cost of acquisition or production would have to be
adjusted downward to reflect its use in order to arrive at the value of the
element.

3. Once a value has been determined for the element, it is
necessary to apportion that value to the imported goods. Various
possibilities exist. For example, the value might be apportioned to the
first shipment if the importer wishes to pay duty on the entire value at
one time. As another example, the importer may request that the value
be apportioned over the number of units produced up to the time of the
first shipment. As a further example, the importer may request that the
value be apportioned over the entire anticipated production where
contracts or firm commitments exist for that production. The method of
apportionment used will depend upon the documentation provided by
the importer.

4. As an illustration of the above, an importer provides the
producer with a mould to be used in the production of the imported

REVENUE AMENDMENT ACT 2004

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goods and contracts with the producer to buy 10,000 units. By the time
of arrival of the first shipment of 1,000 units, the producer has already
produced 4,000 units. The importer may request the proper officer to
apportion the value of the mould over 1,000 units, 4,000 units or 10,000
units.

Paragraph 1(b)(iv)

1. Additions for the elements specified in paragraph 1(b)(iv) of
Part 8 should be based on objective and quantifiable data. In order to
minimize the burden for both the importer and the Collector of Customs
in determining the values to be added, data readily available in the
buyer's commercial record system should be used in so far as possible.

2. For those elements supplied by the buyer which were purchased
or leased by the buyer, the addition would be the cost of the purchase or
the lease. No addition shall be made for those elements available in the
public domain, other than the cost of obtaining copies of them.

3. The ease with which it may be possible to calculate the values to
be added will depend on a particular firm's structure and management
practice, as well as its accounting methods.

4. For example, it is possible that a firm which imports a variety of
products from several countries maintains the records of its design
centre outside Bermuda in such a way as to show accurately the costs
attributable to a given product. In such cases, a direct adjustment may
appropriately be made under the provisions of Part 8.

5. In another case, a firm may carry the cost of the design centre
outside Bermuda as a general overhead expense without allocation to
specific products. In this instance, an appropriate adjustment could be
made under the provisions of Part 8 with respect to the imported goods
by apportioning total design centre costs over total production benefiting
from the design centre and adding such apportioned cost on a unit basis
to imports.

6. Variations in the above circumstances will, of course, require
different factors to be considered in determining the proper method of
allocation.

7. In cases where the production of the element in question
involves a number of countries and over a period of time, the adjustment
should be limited to the value actually added to that element outside
Bermuda.

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38 1989 Revision

Paragraph 1(c)

1. The royalties and licence fees referred to in paragraph 1(c) of
Part 8 may include, among other things, payments in respect to patents,
trade marks and copyrights. However, the charges for the right to
reproduce the imported goods in Bermuda shall not be added to the
price actually paid or payable for the imported goods in determining the
customs value.

2. Payments made by the buyer for the right to distribute or resell
the imported goods shall not be added to the price actually paid or
payable for the imported goods if such payments are not a condition of
the sale for export to Bermuda of the imported goods.

Paragraph 3

Where objective and quantifiable data do not exist with regard to
the additions required to be made under the provisions of Part 8, the
transaction value cannot be determined under the provisions of Part 1.
As an illustration of this, a royalty is paid on the basis of the price in a
sale in Bermuda of a litre of a particular product that was imported by
the kilogram and made up into a solution after importation. If the
royalty is based partially on the imported goods and partially on other
factors which have nothing to do with the imported goods (such as when
the imported goods are mixed with domestic ingredients and are no
longer separately identifiable, or when the royalty cannot be
distinguished from special financial arrangements between the buyer
and the seller), it would be inappropriate to attempt to make an addition
for the royalty. However, if the amount of this royalty is based only on
the imported goods and can be readily quantified, an addition to the
price actually paid or payable can be made.

Note to Part 15

Paragraph 4

For the purposes of Part 15, the term "persons" includes a legal
person, where appropriate.

Paragraph 4(e)

For the purposes of this Schedule, one person shall be deemed
to control another when the former is legally or operationally in a
position to exercise restraint or direction over the latter.

REVENUE AMENDMENT ACT 2004

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Note to Part 17

Part 17 recognizes that in applying this Schedule, the proper
officer may need to make enquiries concerning the truth or accuracy of
any statement, document or declaration presented to him for customs
valuation purposes. The Part thus acknowledges that enquiries may be
made which are, for example, aimed at verifying that the elements of
value declared or presented to customs in connection with a
determination of customs value are complete and correct. The proper
officer has the right to expect the full cooperation of importers in these
enquiries.

THIRD SCHEDULE
STANDARD SCALE OF PENALTIES

(Section 84A)

Level on the scale Monetary amount of penalty

1 $1,000.00

2 $2,000.00

3 $6,000.00

4 $12,000.00

5 $30,000.00

6 $50,000.00

7 $100,000.00

FOURTH SCHEDULE
REVIEWABLE DECISIONS SUBJECT TO SUPERVISORY

JURISDICTION ON APPEAL

(Section 122, 122B)

1. Decisions under paragraphs (a) to (e), made for the purposes of
the Revenue Act 1898—

(a) any decision as to whether anything is liable to forfeiture
or as to whether anything forfeited or seized under the
Revenue Act 1898 is to be restored to any person or as
to the conditions subject to which any such thing is so
restored;

REVENUE AMENDMENT ACT 2004

40 1989 Revision

(b) any decision to withhold the certificate of clearance of a
ship bound from Bermuda (section 7(4));

(c) any decision to refuse delivery of any goods (section
19(2));

(d) any decision relating to the grant of an application for
authorisation to use simplified procedures, the
conditions of the authorisation or revocation of the
authorisation (sections 35C(1), 35D(2), 35D(3) and
35E(1)); and

(e) any decision relating to specific records to be kept, the
period for which records are required to be preserved, or
the securing of information (paragraphs 2(2), 3(a), 3(b)
and 4(2) of the First Schedule).

2. Any decision under section 13(3) of the Customs Tariff Act 1970
refusing an application for approval to use or dispose of goods in respect
of which relief was granted.

3. Any decision under section 7 of the Consular Relations Act 1971
making arrangements for securing a refund of customs duty or imposing
any conditions subject to which any refund is to be made.

4. Any decision under section 7(2) of the Hotels Concession Act
2000 refusing an application for approval to use or dispose of goods in
respect of which relief has been granted.

REVENUE AMENDMENT ACT 2004

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FIFTH SCHEDULE
APPEAL TRIBUNAL FORMS

(Section 122D)

Government of Bermuda Form 1C (Reg. 4 modified by section 122C of
the Revenue Act 1898)

REVENUE ACT 1898

TAX APPEAL TRIBUNAL PROCEDURE REGULATIONS 1981

Tax Appeal No. of

Notice of Appeal

To: The Collector of Customs

TAKE NOTICE THAT I (1) of (2) require you to treat this notice as an
appeal against the appealable decision dated the(3) and to forward it to
the Tax Appeal Tribunal.

I enclose herewith a statement of the appellant's case in accordance with
Regulation 5 of the Tax Appeal Tribunal Procedure Regulations 1981.

Dated this [blank] day of [blank] 20 [blank]

..............................................................................
Signature of appellant or

his duly authorized representative.

(1) Full name of appellant.
(2) Full address of the appellant.
(3) Date of the decision on a review or deemed confirmation.

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42 1989 Revision

Government of Bermuda Form 2C (Reg. 10 modified by
section 122C of the Revenue Act 1898)

REVENUE ACT 1898

TAX APPEAL TRIBUNAL PROCEDURE REGULATIONS 1981

In the Tax Appeal Tribunal

Tax Appeal No. of

[blank] Appellant
vs

[blank] Respondent

NOTICE IS HEREBY GIVEN that the appeal in the above
matter will be heard at [blank] o'clock in the fore/afternoon
on the [blank] day of [blank] 20 [blank] at Hamilton, and
that you may appear in person or by your duly authorized
representative; in the event, however, of your failing to
appear personally or by your representative, the Tax Appeal
Tribunal may proceed to hear and determine the appeal in
your absence.

Dated this [blank] day of [blank] 20 [blank]

.......................................
Chairman,

Tax Appeal Tribunal".

REVENUE AMENDMENT ACT 2004

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SECOND SCHEDULE

1. AMENDMENTS RELATING TO PENALTIES

(Section 18)

(1) (2)

AEA section 3 the level 3 amount

AEA section 4(2) the level 5 amount

BA(DFS)A section 47(1)(a) the level 2 amount

BA(DFS)A section 47(1)(b) the level 4 amount

BA(DFS)A section 47(3)(c) the level 4 amount

BA(DFS)A section 47(3)(d) the level 6 amount

BPSA section 8(1), first amount the level 3 amount

BPSA section 8(1), second amount the level 5 amount

BPSA section 8(2), first amount the level 4 amount

BPSA section 8(2), second amount the level 6 amount

BPSA section 8(3), first amount the level 4 amount

BPSA section 8(3), second amount the level 7 amount

CD(SR)A section 8(1) the level 3 amount

CD(SR)A section 8(2) the level 5 amount

CD(SR)A section 8(2A) the level 5 amount

CD(SR)A section 8(3) the level 4 amount

HA(EC)A section 6(1) the level 4 amount

HCA section 9(1) the level 3 amount

HCA section 9(2)(a) the level 4 amount

H(TCDR)A section 14(1) the level 3 amount

H(TCDR)A section 14(2) the level 4 amount

ISRA section 3(1) the level 4 amount

RA section 4(2) the level 4 amount

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RA section 6(1) the level 4 amount

RA section 6(2) the level 4 amount

RA section 7(1) the level 3 amount

RA section 7(2), first amount the level 1 amount

RA section 7(2), second amount the level 4 amount

RA section 7(3) the level 4 amount

RA section 11(1)(b), first amount the level 4 amount

RA section 11(1)(b), second amount the level 3 amount

RA section 12(1) the level 4 amount

RA section 13 the level 4 amount

RA section 14(2) the level 2 amount

RA section 27(4) the level 4 amount

RA section 35(3) the level 4 amount

RA section 35(4) the level 4 amount

RA section 43(2) the level 4 amount

RA section 46(2) the level 4 amount

RA section 64 the level 3 amount

RA section 67 the level 4 amount

RA section 68 the level 2 amount

RA section 76(2) the level 3 amount

RA section 82(4) the level 4 amount

RA section 82(7) the level 6 amount

RA section 83 the level 4 amount

RA section 84(3) the level 3 amount

RA section 85 the level 4 amount or five
times the amount of duty
payable on the goods in
respect of which the offence is
committed, whichever is the
greater amount.

RA section 86, first amount the level 4 amount

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RA section 86, second amount the level 5 amount

RA section 87 the level 4 amount

RA section 88 the level 4 amount

RA section 89(2) the level 4 amount

RA section 89(3) the level 4 amount

RA section 89A(3) the level 5 amount

RA section 90(2) the level 4 amount

RA section 92 the level 4 amount

RA section 94 the level 3 amount

RA section 95(3) the level 4 amount

RA section 96(2) the level 3 amount

RA section 99(3) the level 3 amount

RA section 99A, first amount the level 4 amount

RA section 99A, second amount the level 6 amount

RA section 100(2) the level 5 amount

RA section 105(2) the level 5 amount

RA section 125(2) the level 4 amount

RA First Schedule, paragraph 13 the level 3 amount

R(TCDR)A section 14(1) the level 3 amount

R(TCDR)A section 14(2) the level 4 amount

SA section 2(2) the level 3 amount

SA section 3(3) the level 4 amount

SA section 4(1) the level 4 amount

SA section 5(2) the level 4 amount

SA section 6(1) the level 4 amount

SA section 7 the level 4 amount

SA section 8 the level 4 amount

SA section 9 the level 4 amount

SA section 10 the level 5 amount

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SA section 11 the level 5 amount

SWA section 3(2) the level 3 amount

2. TABLE OF ABBREVIATIONS USED IN PARAGRAPH 1

AEA Arms Exportation Act 1862

BA(DFS)A Bermuda Airport (Duty Free Sales) Act 1997

BPSA Bonding of Precious Stones Act 1952

CD(SR)A Customs Duty (Special Remission) Act 1951

HA(EC)A Historic Articles (Export Control) Act 1983

HCA Hotels Concession Act 2000

H(TCDR)A Hotels (Temporary Customs Duty Relief) Act 1991

ISRA Immature Spirits Restriction Act 1921

RA Revenue Act 1898

R(TCDR)A Restaurants (Temporary Customs Duty Relief) Act 2002

SA Spirits Act 1890

SWA Sufferance Warehouse Act 1875

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THIRD SCHEDULE
CONSEQUENTIAL AMENDMENTS

(Section 19)

Enactments Amendments

Revenue Act 1898 In sections 35B(3), 35C(2)(c),
98A(1) and 98A(2), delete the
word "Schedule" and substitute
the words "First Schedule".

Customs Tariff Act 1970 In section 1, delete the word
"value" and its definition and
substitute the following word and
its definition

""value" in relation to any goods
means the value of those goods
ascertained in accordance with
section 24 and the Second
Schedule to the Revenue Act
1898.".

Hamilton Goods Wharfage and
Storage Charges Ordinance 1967

In section 3(1), delete the words
"the provisions of" and substitute
the words

"section 24 and the Second
Schedule to".

St. George's Wharfage and
Storage Charges Ordinance 1967

In section 3(1), insert immediately
after the words "in accordance
with", the following words

"section 24 and the Second
Schedule to".

Bermuda Airport (Duty Free
Sales) Act 1997

In the Second Schedule, repeal
paragraph 2 and substitute the
following paragraph

"2. Sections 24 and 28 and the
Second Schedule to the Act,
which relate to the ascertainment
of the value of goods for the
purposes of duty; and quarterly
tables of imports and exports
shall apply.".

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Hotels (Temporary Customs Duty
Relief) Act 1991

In section 14, repeal subsection
(3) and substitute the following
subsection

"(3) Where duty is lost to the
Revenue as a result of an offence
in contravention of section 12 or
13, the person who commits the
offence is liable to forfeit a penalty
of the level 4 amount or five times
the amount of the duty lost to the
Revenue by reason of the
commission of the offence,
whichever is the greater
amount.".

Hotels Concession Act 2000 In section 9(2), repeal paragraph
(b) and substitute the following
paragraph

"(b) where duty is lost to the
Revenue as a result of the
offence, to a fine of the level
4 amount or five times the
amount of the duty lost to
the Revenue by reason of the
commission of the offence,
whichever is the greater
amount.".

Restaurants (Temporary Customs
Duty Relief) Act 2002

In section 14, repeal subsection
(3) and substitute the following
subsection

"(3) Where duty is lost to the
Revenue as a result of an offence
having been committed against
section 12 or 13, the person who
commits the offence is liable to
forfeit a penalty of the level 4
amount or give five times the
amount of the duty lost to the
Revenue by reason of the
commission of the offence,
whichever is the greater
amount.".

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Post Office Act 1900 In section 37, delete the words
"one hundred and twenty dollars,
or, at the option of the Collector of
Customs, treble the value of the
goods" and substitute the
following words

"the level four amount or treble
the value of the goods, whichever
is the greater amount,".

REVENUE AMENDMENT ACT 2004

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