GlossaryEN1 min readUpdated: Jun 26, 2026

ad valorem duty

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.

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Last updated: 26 June 2026Published: 22 November 2025

Source: https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx

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Definition & Explanation

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.

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