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Customs Valuation & Landed Cost

Royalties & License Fees

Also known as: Royalties

Royalties and license fees are payments a buyer makes for the right to use intellectual property — patents, trademarks, copyrights, or know-how — embodied in or associated with imported goods, and they may have to be added to the customs value. The test is whether the buyer must pay the royalty as a condition of the sale of the goods for export; when it must, the payment is dutiable even though it is billed separately from the merchandise. Because licensing arrangements are common in branded and technology products, determining the dutiability of royalties is a frequent and consequential valuation question.

The JFS takeLicensed customs broker · Filer 82G

Dutiable when the buyer must pay them as a condition of sale of the imported goods. The analysis turns on whether the license is tied to buying the goods or is genuinely separate, and the answer sits in contracts your customs people usually have not read.

Where it matters for compliance

  • Dutiable where paid as a condition of sale, directly or indirectly.
  • Proceeds of a later resale that accrue to the seller are also an addition.

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.Customs ValuationCustoms 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.

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.