Glossary
What is ad valorem and specific duty?
Ad valorem duties are charged as a percentage of the customs value of goods. Specific duty is charged as a fixed amount per unit of quantity per kilogram, litre or item regardless of what the goods are worth. A compound duty applies both. |
How is each one calculated?
- Ad valorem — a percentage of customs value. As the value rises, the duty rises with it. Most manufactured goods sit here.
- Specific — a fixed charge per unit of quantity, unaffected by value. Common on alcohol, tobacco and certain agricultural goods.
- Compound — both applied together, or whichever of the two produces the higher amount.
Why the distinction matters
Ad valorem duties track the market; specific duties do not. On low-value goods a specific duty can approach or exceed the value itself. It also shifts where accuracy counts with a specific duty, the declared net weight or quantity decides the bill, not the price on the invoice.
Where you meet both at once
Trade remedy measures such as anti-dumping duty and countervailing duties are frequently expressed as a specific amount per tonne, sitting on top of an ad valorem tariff. Reading the tariff properly means checking the unit of measure alongside the rate — the two together give the real figure.
iCustoms calculates duty across ad valorem, specific and compound rates from the commodity code up. |
