Customs value is the basis used to calculate ad valorem import duty and can also influence import taxes. It is not always identical to the invoice total: the declared amount may require specific additions or exclusions under the destination country's valuation rules.
Begin with transaction value
The primary WTO method begins with the price actually paid or payable for goods sold for export to the country of importation, subject to conditions and prescribed adjustments. The commercial invoice is important evidence, but customs valuation examines the entire transaction rather than accepting a number without support.
Confirm that buyer and seller relationships, restrictions, conditions or later proceeds do not prevent use of transaction value or require additional analysis.
Identify required additions
Depending on local implementation, additions may include certain commissions and brokerage, containers, packing, assists supplied by the buyer, royalties or licence fees related to the goods, and proceeds that revert to the seller. Transport, loading, handling and insurance to the place of import may also be included where the jurisdiction applies that basis.
Additions must be supported by objective and quantifiable data. Keep contracts, freight invoices, insurance evidence, tooling allocations and royalty calculations with the declaration file.
Separate allowable exclusions
Post-import transport, installation, construction, maintenance, buying commissions or local duties and taxes may be excluded when the applicable rules permit and the amounts are separately identified. Do not deduct a cost merely because it appears undesirable; the exclusion must be legally supported and evidenced.
Incoterms® prices can include costs beyond the customs border. Break the price down rather than using EXW, CIF, DAP or DDP labels as automatic valuation formulas.
Apply the methods in sequence
If transaction value cannot be used, the WTO framework provides subsequent methods based on identical goods, similar goods, deductive value, computed value and a fallback method. Importers should not jump directly to an arbitrary estimate.
Record the selected method, adjustments, currency conversion, exchange-rate source and supporting evidence. Seek a binding valuation decision or specialist advice for related parties, royalties, assists or complex supply chains.
Quick control
Mini-checklist
- Confirm whether transaction value is acceptable
- Review all contracts and payments linked to the sale
- Add only legally required, quantifiable elements
- Separate supported post-import exclusions
- Document the method, exchange rate and evidence
Frequently asked questions
What professionals ask
Is customs value the same as the commercial invoice value?
Not always. The invoice price is often the starting point, but customs rules may require additions or allow separately identified exclusions.
Does customs value include freight and insurance?
It depends on the importing jurisdiction's implementation and the relevant place of valuation. Verify whether pre-import freight, loading, handling and insurance must be added.
What happens if transaction value cannot be used?
Customs valuation methods are applied in a prescribed sequence, including values of identical or similar goods, deductive value, computed value and a fallback method.
Authoritative references
Further reading
This guide provides general operational information and does not constitute legal, customs, tax or regulatory advice. Requirements vary by transaction and jurisdiction; obtain specialist advice where appropriate.