Ad Valorem Duty
A tariff calculated as a percentage of the value of the imported goods.
Understanding Ad Valorem Duty
Ad valorem duties are the most common type of import duty. The duty amount is determined by multiplying the customs value of the goods by the applicable tariff rate percentage. For example, a 5% ad valorem duty on goods valued at $10,000 would result in a $500 duty payment.
Ad valorem duties are considered more equitable than specific duties because they automatically adjust with changes in the price of goods.
Frequently Asked Questions
What is Ad Valorem Duty?
A tariff calculated as a percentage of the value of the imported goods.
Why is ad valorem duty important for US importers?
Ad valorem duties are the most common type of import duty. The duty amount is determined by multiplying the customs value of the goods by the applicable tariff rate percentage. For example, a 5% ad valorem duty on goods valued at $10,000 would result in a $500 duty payment.
How does ad valorem duty work in practice?
Ad valorem duties are considered more equitable than specific duties because they automatically adjust with changes in the price of goods.