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It appears that many folks are unclear as to what amount they should fill in for "Total Value" on the customs form when shipping internationally.
It's really very simple. The "Total Value" is the amount paid for the item (the transaction value). This is the internationally accepted definition.
The value should NOT include the amount paid for shipping, and it is NOT the amount the seller paid for the item, and it is NOT what the seller estimates that the item is worth. I think the confusion originates with the unclear wording on the form. Also, I've heard that some folks were mis-informed by post office employees. Hopefully, it is now clear. And yes, it does matter.
For example, if I purchase an item for $1 and pay $25 to have it shipped, and the seller erroneously states the value as $26 on the form, customs will charge me duty and taxes on $26 instead of on the correct amount of $1. Naturally, I find that pretty annoying, as I then have pay the charges and then submit my invoice from the seller to customs to show the correct amount and then wait several weeks for a refund. In other words, it's simpler for the seller to put in the correct amount than it is for me to have to deal with the error.
If you're still having some doubts, you can check out details about the internationally accepted Customs Valuation Code at http://www.cbsa-asfc.gc.ca/publications/pub/bsf5000-eng.html, which outlines the following:
You have to use the first of the six methods, the **transaction value** method, whenever possible to determine the customs value of imported goods. Note that you don't get your choice of which method, you must always go firstly by the transaction value "whenever possible", and it is possible if you know what you sold the item for.
Sellers please note: You may never get the feedback from your buyers that you erred in this way, but if you want repeat business, you're well advised to do it correctly the first time.
It's really very simple. The "Total Value" is the amount paid for the item (the transaction value). This is the internationally accepted definition.
The value should NOT include the amount paid for shipping, and it is NOT the amount the seller paid for the item, and it is NOT what the seller estimates that the item is worth. I think the confusion originates with the unclear wording on the form. Also, I've heard that some folks were mis-informed by post office employees. Hopefully, it is now clear. And yes, it does matter.
For example, if I purchase an item for $1 and pay $25 to have it shipped, and the seller erroneously states the value as $26 on the form, customs will charge me duty and taxes on $26 instead of on the correct amount of $1. Naturally, I find that pretty annoying, as I then have pay the charges and then submit my invoice from the seller to customs to show the correct amount and then wait several weeks for a refund. In other words, it's simpler for the seller to put in the correct amount than it is for me to have to deal with the error.
If you're still having some doubts, you can check out details about the internationally accepted Customs Valuation Code at http://www.cbsa-asfc.gc.ca/publications/pub/bsf5000-eng.html, which outlines the following:
There are six valuation methods:
- transaction value
- transaction value of identical goods
- transaction value of similar goods
- deductive value
- computed value
- residual
You have to use the first of the six methods, the **transaction value** method, whenever possible to determine the customs value of imported goods. Note that you don't get your choice of which method, you must always go firstly by the transaction value "whenever possible", and it is possible if you know what you sold the item for.
Sellers please note: You may never get the feedback from your buyers that you erred in this way, but if you want repeat business, you're well advised to do it correctly the first time.Guide created: 03/07/09 (updated 03/07/09)
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