The import customs value how to determine the value, CIF, FOB and exchange rates.

The import customs value is the value used as the basis for computing import duty on imported goods. Under the regulations on export and import duty, the tax amount is generally determined from the customs value and the duty rate of each item at the time of calculation.

Put simply, the import customs value is not always equal to the purchase price on the invoice. In practice, a business needs to distinguish three concepts:

For instance, if the invoice shows a FOB price of USD 10,000, that figure usually only reflects the value of the goods at the port of departure. The business still needs to check international freight and insurance to determine the appropriate customs value.

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The commercial invoice is an important document, but it does not answer the question: “Which costs does this price already include?”

The same shipment may be priced at USD 10,000, yet with different delivery terms the way the customs value is determined also differs.

Therefore, before computing duty, a business should carefully read the contract, the invoice, the bill of lading and the freight and insurance documents. Relying on a single price line on the invoice carries a fairly high risk of undervaluation or miscalculation, affecting the duty computation and creating exposure to penalties.

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In import practice, CIF and FOB are the two terms most easily confused.

With CIF, the price usually already includes the value of the goods, the international freight and insurance to the port or border gate of import. CIF is therefore generally closer to the basis for the customs value than FOB. Even so, a business still needs to check the actual documents for any additions, deductions or other adjustments.

With FOB, the invoice price usually only reflects the value of the goods up to the moment they are loaded onto the vessel at the port of departure. When importing under FOB, a business needs to additionally check:

• International freight
• Cargo insurance, if any
• Costs related to the imported goods but not yet included in the invoice price

A simple operational way to understand it is:

Suppose a business imports a shipment with the following details:

Reference import customs value in USD:

Converted to VND:

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Another common mistake is taking a commercial bank rate or an internal accounting rate to compute duty. When building a cost estimate, a business may use a reference rate. But for the official customs declaration, the customs exchange rate must be checked against the information published by the customs authority or applied at the time the declaration is registered.

The General Department of Customs has a section that publishes foreign-currency exchange rates for customs declarations, including the USD/VND rate at each point in time.

The point to remember is that the rate can change. If a business quotes a customer before the declaration date, the exchange rate should be left as data to be updated rather than fixed from the start.

Not every cost is automatically added to the import customs value. However, there are several cost groups a business should carefully check before declaring:

• International freight
• Cargo insurance
• Packing and packaging costs if not already included in the goods price
• Commission and brokerage fees related to the import transaction
• Royalties and licence fees in certain cases
• Buyer-provided assistance such as moulds, designs, materials or tools
• Other payments related to the imported goods

To determine the import customs value more accurately, a business should prepare at least the following documents:

The import customs value and the VAT base for imports are related, but not the same.

The import customs value is the basis for computing import duty. The VAT base for imports, by contrast, is generally determined from the import price at the border gate plus the import duty and certain other taxes, if any. The General Department of Customs also provides a formula for import VAT as the customs value multiplied by the tax rate.

In other words, if a business gets the import customs value wrong, the downstream import VAT can be wrong too. Therefore, the step of standardizing the input value should be done before applying the rate and computing the total payable tax.

For a business importing many shipments, the data for computing duty is usually scattered across the invoice, the contract, the bill of lading, freight quotes, insurance documents, the C/O and product description files. Checking manually, it is very easy to miss data or use the wrong delivery terms.

Gexim.ai helps a business build a data-checking workflow before computing duty along the following lines:

• Standardizing product descriptions and document data
• Flagging missing information such as freight, insurance, origin and C/O
• Helping check the HS code to look up the correct tax policy
• Clearly separating goods price, freight, insurance, local charges and incidental costs
• Creating a data checklist before computing import duty and VAT

Instead of just entering a number and computing duty, a business should start from checking the shipment data. This step helps reduce errors in declaration, cost estimation and post-clearance reconciliation.

The import customs value is the starting point of every duty calculation, not a figure taken for granted from the invoice. Before applying the duty rate from the HS code, a business needs to determine under which terms the goods were bought, whether freight and insurance are included, whether there are any amounts to be added, and to use the correct customs exchange rate at the time the declaration is registered.

The safe approach is to start from checking the shipment data: gather sufficient documents, clearly separate goods price, freight, insurance and incidental costs, and only then compute duty. A standardized process for the input value reduces the risk of miscalculating import duty and VAT, of a skewed landed-cost estimate, and of issues that are hard to resolve during post-clearance reconciliation.