Customs use the value to clear your goods and determine the duties and taxes. That's why it's important to state it clearly on the paperwork and ensure it's correct.
It’s the transaction value. This is usually the amount paid for the items being imported.
Say you’re shipping two watches each valued at $160,00, the value would be $320,00.
Customs use it to clear your goods and determine the duties and taxes.
On the commercial invoice – and bear in mind inaccurate values are the most common reasons for duty and tax disputes, so make sure it’s correct.
As well as an accurate value, your commercial invoice should include an HS code and a detailed description of your shipment.
Depending on the Incoterms® you selected, you may also need to show the freight and insurance costs as these are included in the valuation of your goods. To find out more on this topic, watch our video ‘What are Incoterms®?’.
To determine the value of imported goods, the customs valuation procedure is applied.
Most customs authorities apply rules from the World Trade Organisation, otherwise known as the WTO. You can get more information on the six methods they use on their website.
Undervaluation of goods is taken very seriously by the authorities and can result in a fine or your goods being seized.
And if the customs authorities question the value you’ve provided, they may ask the receiver to provide proof of sale. So to avoid this delay, your carrier or broker will ask you for evidence of sale such as a contract or bank payment.