How is import duty calculated?
Duty is a percentage of the value customs puts on your goods. The percentage comes from your code and your destination. The value is not simply what you paid the supplier, and the order in which the charges stack is what most estimates get wrong.
Work it in the order customs works it: establish the customs value, apply the duty rate to that, then apply the consumption tax to the value plus the duty. Tax is charged on duty. Duty is never charged on tax.
Start with the customs value
The customs value is the figure both the duty and the consumption tax are calculated from, and different countries build it differently. Some include international freight and insurance in it; others take the price at the exporter's door and exclude everything spent getting the goods to the border.
That difference is worth real money on a low-value, high-freight consignment, and it is the reason two calculators can produce different answers from the same invoice without either being broken.
Apply the duty rate
The rate attaches to your code in the destination's own tariff schedule. Published rates are the default rate that applies to any origin without a trade agreement, and a preferential rate under an agreement can be lower, sometimes zero, if you can prove where the goods originate.
Not every duty is a percentage. Wine, watches and some food products are charged per litre, per item or as a percentage plus an amount per kilogram. A calculator that multiplies those by a percentage returns a confident wrong answer, which is why this site prints the official wording for them instead.
Then the consumption tax
VAT, IVA, MwSt, TVA and GST are the same mechanism under different names, and they are charged on the customs value plus the duty. Adding them to the goods value alone understates the bill on anything dutiable.
The United States is the exception worth knowing: there is no federal consumption tax at the border, and state sales tax is a separate matter handled after import rather than by customs.
What the estimate leaves out
Trade remedies sit on top and are origin-specific: anti-dumping duties, countervailing duties and safeguard measures can multiply the effective rate on goods from a named country while leaving the same product from elsewhere untouched.
So do the costs that are not tariffs at all, which are charged by companies rather than governments and vary by who you use. Budget for them separately rather than expecting a duty calculator to know them.
Currency, and the day the rate is fixed
Your invoice is rarely in the destination currency, so somewhere between the supplier and the declaration an exchange rate is applied. Customs authorities publish their own periodic conversion rates for exactly this, and the published rate is the one that binds, not the mid-market rate your bank quoted on the day you paid.
The gap is usually small and occasionally is not. A volatile month, a large consignment and a rate fixed a fortnight before arrival can move a duty bill by more than the freight cost. If you are pricing on thin margins, budget against the authority's published rate rather than a live quote, and expect a small discrepancy either way.
A worked example
Cotton T-shirts into the United States, using the stored rate and the valuation rule the calculator applies to that market.
| Goods value on the invoice | 5,000.00 |
| International freight | 400.00 |
| Cargo insurance | 45.00 |
| Value the duty is charged on (FOB basis) | 5,000.00 |
| Duty at 16.5% | 825.00 |
| United States charges no consumption tax at the border | 0.00 |
| Total, before commercial charges | 6,270.00 |
| Estimate uses the US customs valuation method, which excludes international freight and insurance from the dutiable value. 19 U.S.C. 1401a(b)(4)(A) and 19 CFR 152.103: transaction value is exclusive of costs incident to the international shipment, where those charges are separately identified. Rate last verified 2026-08-31. | |
Note which line the freight lands on. Move that consignment to a destination that values goods differently and the duty changes without the invoice changing at all.
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