GlossaryEN1 min readUpdated: Jun 23, 2026
ad valorem
A freight forwarder declares a shipment at a customs value of €10,000; the applicable rate is 5 per cent – resulting in a duty of €500.
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Source: https://www.wcoomd.org/en/topics/valuation.aspx
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Definition & Explanation
A freight forwarder declares a shipment at a customs value of €10,000; the applicable rate is 5 per cent – resulting in a duty of €500. That is the ad valorem principle in practice: the charge is assessed as a percentage of the goods' declared value rather than as a fixed amount per unit. Ad valorem is the global standard for customs duties, taxes, and many freight surcharges. Unlike specific duties – fixed per kilogramme, piece, or litre – ad valorem charges depend entirely on accurate customs valuation, making correct value declaration a core task for every freight forwarder and customs broker. The term also applies beyond customs law: ad valorem pricing appears in cargo insurance premiums and certain port or handling surcharges.
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