How to determine the customs value of your U.S. imports

Getting your customs value right protects your business from delays and penalties. It also ensures you only pay the duties and taxes you truly owe.

Every shipment entering the United States requires you to declare its customs value to U.S. Customs and Border Protection (CBP).

CBP uses this figure, along with the Harmonized Tariff Schedule (HTS) code, to determine applicable duties, taxes, and other import charges.

The customs value is not always the same as the invoice price, and there are several valuation methods you can use to calculate it.

Understanding these methods and knowing which one applies to your shipment will help you plan costs and stay compliant with CBP requirements.

Understanding customs valuation

Customs valuation is the process used to determine the customs value of your goods.

The rules for customs valuation come from the World Trade Organization’s (WTO) Customs Valuation Agreement, which sets a standard framework followed by most countries.

Following this framework ensures that no matter where your goods are coming from, the process for determining their value is consistent across the globe.

The 6 different customs valuation methods

There are six methods to determine the customs value of imported goods.

1. Transaction value

This is the most common method. It is based on the price actually paid or payable for the goods when sold for export to the U.S.

If the sale is a genuine, arm’s-length transaction, the price is used and adjusted to include costs such as assists, royalties, packing, and freight to the U.S. port of import.

2. Transaction value of identical goods

If the actual sale price can’t be used, the value may be determined by using the value of identical goods imported into the U.S. around the same time.

The goods must be identical in all respects (same physical characteristics, quality, origin, and ideally the same manufacturer).

3. Transaction value of similar goods

When no identical goods are available, the value of similar goods can be used. These are items with similar characteristics and materials, performing the same basic function. 

The goods must be produced in the same country and by the same or a comparable manufacturer.

4. Deductive value

This method starts with the resale price of the goods in the U.S. and works backward to arrive at the customs value. 

Costs such as profit, transport after import, and applicable duties and taxes are deducted from the resale price.

5. Computed value

Calculated from the production side, this method adds up the cost of materials, direct labour, overhead, packing, and a reasonable profit.

It requires detailed cost data from the foreign manufacturer.

6. Fallback method

Used only when none of the other methods apply, the fallback method adapts elements from other methods to determine the customs value.

The process of customs valuation starts with the transaction value method and continues in sequence, with each subsequent alternative used only if the method before it is not applicable. 

Inclusions and exclusions

No matter which valuation method you use, certain costs must be added to the customs value, while others must be subtracted.

Inclusions

The customs value must include the following:

• Packing costs
• Selling commissions
• Assists (materials, tools, parts, or designs you supplied to the seller at no charge or at a reduced cost)
• Royalties and license fees you’re required to pay as a condition of sale
• Freight, insurance, and related costs to bring the goods to the U.S. port of import
• Proceeds from the resale of the goods that are payable to the seller

Exclusions

The customs value should exclude the following:

• Duties and taxes
• Domestic transportation, insurance, and handling after the goods arrive at a U.S. port of import
• Post-importation assembly, installation, or processing costs
• Marketing, advertising, or distribution expenses incurred in the U.S
• Buying commissions paid to your agent for representing you in the purchase

Costs must be clearly itemized on your commercial invoice or in your supporting documents so CBP can easily verify your declared value.

How Cole International can help

Determining the correct customs value can be more complex than it seems, especially when there are assists, royalties, commissions, or other costs involved. That’s where we come in.

At Cole International, we offer trade consulting and customs brokerage services to help U.S. importers navigate changing regulations with confidence.  

Our team works with importers every day to:

• Apply the correct valuation method under the WTO framework
• Review transactions and identify all costs that must be included or excluded
• Prepare documentation to support the declared value and ensure CBP compliance

We don’t believe in guesswork. We get it right the first time.

If you need to determine the customs value of your imports and streamline their entry into the U.S., please reach out to one of our trade professionals.