Trying to mitigate or avoid import duties and taxes, some importers misrepresent or underprice the correct value of their import shipments. Others risk criminal smuggling charges by not declaring the imported items at all.

Novice importers often assume that the price paid on their commercial invoice will be the value that customs officials will use to calculate the amount of duty and tax payable. That is not necessarily so.

This article explains valuation methods for properly calculating the transaction value of an import shipment from customs’ perspective.

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