# ad valorem duty

*Last updated: 2026-06-26*

> Unlike a specific duty charged per unit of quantity, an ad valorem duty is levied as a fixed percentage of the declared customs value of the goods.

Unlike a specific duty charged per unit of quantity, an ad valorem duty is levied as a fixed percentage of the declared customs value of the goods. A 10 % rate on goods valued at USD 1,000 yields USD 100 in duty; the same rate on a USD 5,000 shipment produces USD 500. Ad valorem duties are the most widely used tariff form in world trade precisely because they scale automatically with product quality and price – no separate rate schedule is needed for premium and economy variants of the same product. For importers, the customs valuation method is therefore critical: most WTO members follow the transaction value principle, meaning the invoice price adjusted for freight and insurance to the point of importation. Compound duties blend an ad valorem element with a specific floor rate and are common in sensitive sectors such as textiles and agricultural goods.

**Source:** [https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx](https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx)

## Quick Facts

| Property | Value |
|---|---|
| Term | ad valorem duty |
| Language | EN |
| Word count | 147 |
| Last updated | 2026-06-26 |
| Source | https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx |

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