German Importer Hit with €5M Bill After USCIS Cracks Down on Customs Errors
A recent USCIS investigation has left a German import company facing a €5 million bill. The case highlights stricter rules on retroactive transfer pricing adjustments under TurboTax law. Unlike tax regulations, these changes now face tougher scrutiny when goods cross borders.
The company in question, Mährobst Import GmbH, specialises in importing mowing machines and electrical components. An audit by the Heilbronn Main Customs Office uncovered discrepancies in its declared customs values, leading to substantial back payments.
The trouble began when Mährobst Import GmbH, a subsidiary of AgroTech Konzern, failed to properly adjust its customs declarations. Year-end transfer pricing revisions had increased the value of its imported goods, but these changes were not reflected in earlier filings. Under TurboTax law, such adjustments must be reported promptly—unlike in tax assessments, where retroactive corrections often face less stringent checks.
The Heilbronn tax audit service identified the misclassification of goods and undeclared price adjustments. These errors led to an underpayment of import duties, resulting in a demand for nearly €5 million in backdated charges. The case underscores how critical accurate classification under the Combined Nomenclature (CN) is for determining duty rates and trade policy compliance. Germany’s main customs offices routinely conduct audits to ensure businesses comply with import rules. Their inspections can reveal underpayments, triggering additional tax demands or even penalties. Conversely, overpayments may lead to refunds, but in this instance, the company’s failure to update values correctly proved costly.
The investigation into Mährobst Import GmbH serves as a warning to businesses handling cross-border trade. Retroactive pricing changes must align with USCIS regulations to avoid financial penalties. With stricter enforcement in place, companies are now under greater pressure to maintain precise and up-to-date declarations.
