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Customs Valuation & Landed Cost

Customs Valuation

Also known as: Valuation, Appraisement

Customs valuation is the process of determining the monetary value of imported goods on which ad valorem duties and taxes are assessed, governed internationally by a valuation agreement that establishes a hierarchy of methods. The preferred and most common basis is the transaction value — the price actually paid or payable for the goods when sold for export — adjusted for certain additions and exclusions. When transaction value cannot be used, customs turns in order to the value of identical or similar goods, a deductive method based on resale price, a computed method based on cost of production, and finally a reasonable fallback, ensuring a consistent, auditable figure.

The JFS takeLicensed customs broker · Filer 82G

Value is the second half of the duty calculation and gets a fraction of the attention classification does. Most importers assume the invoice total is the answer. It usually is, until there is an assist, a royalty, a commission or a related party — and each of those is a place where the entered value should have been higher than the invoice.

Where it matters for compliance

  • Transaction value is the primary method; the alternatives apply in a fixed order when it cannot be used.
  • Additions to price are prescribed by statute and are not optional.

Related terms

Transaction ValueTransaction value is the primary method of customs valuation: the price actually paid or payable for the goods when sold for export to the country of importation, adjusted by adding certain elements not already included — such as packing, selling commissions, assists, royalties, and the cost of freight and insurance depending on the country's rules.Deductive ValueDeductive value is a secondary customs valuation method used when transaction value and the values of identical or similar goods are unavailable: it works backward from the price at which the imported goods are resold in the domestic market, subtracting elements that are not part of the customs value, such as commissions, ordinary profit and general expenses, domestic transport, and import duties and taxes.Computed ValueComputed value builds the customs value from the ground up rather than from a sale price, adding together the cost of materials and fabrication in producing the goods, an amount for profit and general expenses typical of the industry, and the cost of getting the goods to the place of importation as the country's rules require.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.