Customs valuation is the process of determining the official value of imported goods for customs purposes. Customs authorities use this value to calculate import duties, taxes, and certain fees. The customs value is often based on the transaction value, or the price paid or payable for the goods, with required adjustments such as assists, royalties, commissions, packing costs, or transport and insurance depending on local customs rules. Accurate valuation is essential for duty calculation, compliance, and avoiding penalties. In the U.S., CBP determines the dutiable value primarily by transaction value, the price actually paid or payable for goods sold for export to the United States. When CBP questions a declared value, the importer may face a valuation challenge and need invoices or other proof that the value is accurate.
Six Valuation Methods (in order of preference)
- Transaction value: price paid or payable, including assists
- Transaction value of identical goods
- Transaction value of similar goods
- Deductive value: based on resale price in the U.S.
- Computed value: based on cost of production
- Fall-back method: flexible application of the above methods
Additions to Transaction Value
- Selling commissions
- Value of assists: free materials, tooling, or designs provided by the buyer to the seller
- Royalties and license fees
- Proceeds of subsequent resale
- Packing costs
Related terms: Commercial Invoice, Customs Entry, First Sale Valuation.
