Guide 02 / Duty & tax

How duty and VAT
stack at the border.

Start with the customs value

Most countries start from the transaction value: the price actually paid or payable, adjusted for certain additions such as international freight, insurance, commissions and assists. The exact rules differ by country.

Our calculator uses a CIF planning base for the destinations in the model. The US generally includes international freight and insurance in the customs value; the Gulf states use CIF; the EU uses a CIF basis at the border. That is a modelling assumption, not a legal ruling for your entry.

Duty is not one rate

The base tariff rate comes from the national tariff line. Additional measures can sit on top: Section 301 for China-origin goods in the US, anti-dumping duties, safeguards, quotas or excise.

Two shipments with the same HS code can face different total rates because of origin, a trade agreement, a product-specific measure or a change in the measure’s scope. A category-level range is a planning tool, not a substitute for the line-level check.

VAT and GST are different

Import VAT is usually charged on the customs value plus duty, and sometimes plus fees or excise. A registered business often recovers it, so it is a cash-flow cost rather than a permanent margin cost — but it still has to be funded at entry.

The US has no federal VAT at import. State and local sales tax can apply later in the chain. That is why a US estimate can look lower than a Gulf estimate even when the duty rate is similar.

Fees and local charges are not duty

Merchandise processing fees, harbor maintenance fees, broker fees, terminal handling, drayage and documentation sit outside the duty line. They still change the landed cost and should not be buried in a single “customs” number.

FOBtoDDP keeps them separate so you can see which costs are statutory, which are modelled and which are negotiable.

LineBaseTypical driverEvidence level in our report
Customs dutyCIF customs valueHS line + origin + measuresRule-based category estimate
Additional tariffCIF customs valueSection 301 / 232 / AD / safeguardsRule-based where modelled
Import VAT / GSTCIF + duty (+ measures)Destination VAT rateRule-based
Statutory feesCIF or FOBCountry fee scheduleRule-based with caps
Clearance & portPer shipmentBroker / terminal / examEstimated range
Inland deliveryPer shipmentDistance and equipmentEstimated range
Keep this

The order of calculation matters: duty changes the VAT base. A tool that adds VAT before duty will understate the tax due at the border.

Common questions

Is duty calculated on FOB or CIF?

It depends on the destination and the valuation rules. Our model uses CIF for the supported destinations and labels that assumption on every report.

Can I recover import VAT?

Often yes for a VAT-registered business, subject to local conditions. Recovery does not remove the cash requirement at entry.

Why is my broker’s number different?

The HS line, origin, valuation, freight, exam status or a measure in force on the date of entry can all differ. Replace our estimates with confirmed figures before contracting.

Put your own shipment through the model.

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