Customs Valuation Explained: What Value Goes on the Commercial Invoice?

Customs valuation answers a deceptively simple question: what value should be declared for imported merchandise? That number can affect duty, government fees and the accuracy of your landed-cost model.

For many ordinary sales imported into the United States, the starting point is the transaction value—the price actually paid or payable for the goods—subject to required additions and valuation rules.

What CBP says about the commercial invoice value

U.S. Customs and Border Protection states that the commercial invoice should show the price the U.S. buyer paid for the goods, not the price at which the importer plans to resell them in the United States.

CBP also notes that duty is generally assessed on the price paid for the goods without international freight and insurance, unless the tariff provision uses another basis such as quantity or volume.

Costs that may need to be added

Importers should not assume that the supplier’s invoice subtotal automatically equals the final customs value. CBP specifically identifies additions that can include selling commissions, assists, royalties, production-related costs, packing and certain proceeds, depending on the transaction and applicable valuation rules.

Cost item	General planning treatment	Why it needs review
Price paid for goods	Starting point	Core transaction value
International freight	Generally excluded from dutiable value when properly separated	Must be documented
International insurance	Generally excluded when properly separated	Invoice structure matters
Packing costs	Can be included	Part of customs-value additions
Assists	May need to be added	Buyer may provide molds, tools, design work or materials
Royalties/license fees	May need to be added	Treatment depends on relationship to imported goods/sale
U.S. resale price	Not the normal transaction-value starting point	Do not confuse retail value with import value

What an “assist” means in practical terms

An assist can arise when the buyer provides something to the foreign producer free or at reduced cost for use in producing the imported goods. Examples can include tooling, molds, materials or certain design/engineering work. If the factory invoice does not reflect that contribution, customs valuation may require an appropriate amount to be added.

This is why procurement and customs teams need to share information. Finance may know about a tooling payment that the broker never sees on the shipment invoice.

Example: product cost vs landed cost vs customs value

Assume an importer buys merchandise for $30,000. Separately stated international freight is $2,500 and insurance is $150. The importer also supplied a mold whose allocated value for the shipment is $1,000.

The landed cost may ultimately include the $30,000 goods, $2,500 freight, $150 insurance, duty, government fees, broker charges and final delivery. The customs value is a different calculation. It may start with the $30,000 transaction value and require the $1,000 assist to be added, while qualifying international freight and insurance are generally excluded from the dutiable transaction value when properly documented.

This example is simplified; valuation methods and related-party transactions can require more analysis.

Related-party transactions need extra attention

If the buyer and seller are related, transaction value may still be acceptable, but the relationship and price need to satisfy customs rules. Importers should not assume that an intercompany transfer price automatically works for customs simply because it works for accounting or tax purposes.

Commercial invoice checklist

1. Use a clear product description, not generic labels such as “samples” or “parts.”
2. Show quantities and unit prices.
3. Identify the currency.
4. Separate freight and insurance when relevant.
5. State country of origin accurately.
6. Make sure discounts are documented and legitimate.
7. Tell the broker about assists, royalties or other valuation additions that may not appear on the supplier invoice.
8. Keep purchase orders, payment records and cost support.

How customs valuation affects landed cost

Valuation affects the base on which ad valorem duties and the Merchandise Processing Fee may be calculated. If the customs value is wrong, a landed-cost forecast can be wrong even when freight cost is perfect.

Use the Freight Cost Allocation Calculator after the entry costs are known, and see Import Duties, Taxes and Disbursement Fees for the broader landed-cost stack.

Common valuation mistakes

• Declaring expected U.S. retail price instead of the proper import transaction value.
• Leaving tooling or assists outside the broker’s data set.
• Including freight in value without documenting it separately.
• Using zero or nominal values for commercial merchandise.
• Assuming a free sample has no customs value.
• Failing to revisit valuation when supplier relationships or royalty arrangements change.

Frequently asked questions

Should freight be included on the commercial invoice?

It can be shown, but separating freight and insurance clearly helps support the customs-value calculation where those charges are excluded under the applicable valuation method.

Can I declare the factory cost if I bought through a trading company?

Not automatically. Customs valuation depends on the relevant sale and legal rules. Multi-tier transactions can require specialized analysis.

What if the goods were free?

Free goods can still require a customs value. Do not use a zero value merely because no payment was made; obtain proper valuation guidance.

Sources

• CBP: Value on the commercial invoice
• U.S. International Trade Administration: Customs brokers and valuation support