How to Calculate Landed Cost and Import Duty for Imported Goods
Learn how to calculate landed cost, import duty, and VAT or GST on imported products, with a worked example and a cost breakdown table.
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What landed cost includes
Landed cost is the total price of getting a product to your door. It includes more than the supplier's invoice, so ignoring it can hide how much you really pay per unit.
- Product cost
- International freight and insurance
- Customs duty
- Import taxes such as VAT or GST
- Local handling, clearing, and delivery fees
Basic calculation steps
Each country sets its own valuation rules, so check your local customs authority.
- Customs value (CIF) = product cost + freight + insurance
- Duty = CIF value × duty rate
- Tax = (CIF value + duty) × tax rate, in many countries
- Landed cost = CIF value + duty + tax + other fees
Worked example
Goods cost $1,000, freight is $100, and insurance is $20, so the CIF value is $1,120. With a 10% duty, duty is $112. With an 18% tax applied on CIF plus duty ($1,232), tax is $221.76. The landed cost is $1,453.76.
| Item | Amount |
|---|---|
| Goods | $1,000.00 |
| Freight and insurance | $120.00 |
| Customs duty (10%) | $112.00 |
| Import tax (18%) | $221.76 |
| Total landed cost | $1,453.76 |
Why the HS code matters
Duty rates depend on the product's Harmonized System (HS) code. A wrong code can mean the wrong rate, delays, or penalties. Always confirm the code and the current rate with official customs sources before you ship.
FAQ
What is CIF value?
CIF stands for cost, insurance, and freight. It is the product cost plus insurance and shipping to the destination, and it is the customs value in many countries.
Is import duty charged on shipping costs?
In many countries it is, because duty is based on the CIF value, but the rules differ by country.
How do I find the right duty rate?
Find the product's HS code and check your country's official customs tariff for the current rate.
