Duty is a percentage of the customs value. Getting that value right is as important as the duty rate.
Transaction value — the starting point
The price actually paid or payable for goods sold for export to the US. International freight and insurance are generally not included when shown separately.
What must be added
| Addition | Example |
|---|---|
| Assists | Moulds, tooling or materials the US buyer supplied free to the Vietnamese factory |
| Packing costs | If paid by the buyer and not in the price |
| Selling commissions | Paid by the buyer to the seller's agent |
| Royalties / licence fees | When a condition of sale |
| Proceeds of resale | Accruing to the seller |
First-sale valuation
When goods pass through a middleman, the US may accept the factory-to-middleman price if the sale is bona fide, at arm's length and the goods were clearly destined for the US at that time. It can lower duty significantly — with strong documentation. See garment duty.
Common mistakes
- Forgetting assists such as moulds.
- Under-invoicing — a serious violation.
- Inconsistent values across invoice and entry.