How goods legally enter a country · Transaction value first
Customs value — what duty is calculated on
The value customs uses to calculate duty, usually the transaction value with specified additions and deductions.
Key facts
| Primary method | Transaction value: the price actually paid or payable for the goods |
|---|---|
| Additions | Some commissions, assists, royalties, packing and selling costs may need to be added |
| Deductions | Post-import costs and certain charges may be deducted if they are separately identified |
| Transport | Whether freight and insurance are included depends on the destination and the Incoterm |
| Related parties | A related-party price may be accepted if it is arm's length; evidence may be required |
| Currency | Converted using the rate required by the customs authority |
| Burden of proof | The importer must be able to support the declared value |
| Official source | WTO Customs Valuation Agreement and national valuation guidance |
The invoice total is not always the customs value
Customs value starts from the price paid or payable, but the rules can add or subtract items. A tooling cost, a design fee or a royalty paid to a third party may be part of the value even though it is not on the goods invoice.
Freight and insurance treatment varies. A CIF-based system generally includes them; an FOB-based system may not. Do not assume the invoice structure is the customs structure.
Related-party pricing needs evidence
Selling to or buying from a related company is allowed. The question is whether the price reflects the goods' value. Keep transfer-pricing documentation, cost data and comparable prices ready if customs asks.
A low declared value to reduce duty is a compliance risk, not a pricing strategy. The duty saving can be recovered with penalties and interest.
Frequently asked questions
Is customs value the same as the selling price?
Often it starts from the transaction price, but additions and deductions can change it. The destination rules decide.
Do I include freight in the customs value?
It depends on the country's valuation basis and the Incoterm. Check the destination guidance rather than assuming.
Ask a compliance question
Free first answer by email. Tell us the destination, the product and the channel — we will point you to the rule and the official source. No obligation, no sales sequence.