Customs use the product value to clear your goods and determine the duties and taxes. That's why it's important to state it clearly on the paperwork and ensure it's correct. Bear in mind, that a product may be assigned different values in different situations. It's important to understand the differences and declare the right amount on your customs paperwork.
What is the declared value?
It’s the transaction value. This is usually the amount paid for the items being shipped. Say you’re shipping two pairs of shoes, each valued at $160, the value would be $320.
What's the difference between retail value, wholesale value, and cost price?
Retail Value: It's the price an end customer paid for a product. This value is used for Business-to-Consumer (B2C) shipments, such as items sold directly from an online store to an individual consumer.
Wholesale Value: It's the price paid for an item when purchased in bulk for resale. This is the value most commonly used for Business-to-Business (B2B) shipments.
Cost Price is the price it costs a producer to make the item. For customs purposes, this is rarely used as the declared value unless there is no transaction value to go by (e.g., if the item is a gift, a sample, or an intercompany transfer where no sale has occurred). It represents the cost of raw materials, labor, and production.
Which value should I declare on my commercial invoice?
You should always declare the "transaction value," which is the actual price paid or payable for the goods when they were sold. Bear in mind, that undervaluation (declaring fake value) is the most common reason for customs issues, so make sure to always declare the actual value, and be prepared to provide customs authorities with proof of transaction - if they ask.
What is the value used for?
Customs use it to clear your goods and determine the duties and taxes.
Where do I declare it?
On the Customs Declaration section when you are creating your shipping labels. UrShipper will later use the details you provided to generate the Commercial Invoice (CI) for your shipment.
What happens if I provide an incorrect / fake value?
Often people declare a lower value on the customs invoice to reduce the import tax and duty. If customs is suspicious of the valuation in your paperwork, often when your shipment arrives in the destination country, the customs officer will hold the package and ask the receiver to provide proof of payment. Or, they will open your package to inspect the goods, then check on their database or on your website to make sure the item's value declared in the shipping document matches the actual value of the item in the market.
Undervaluation of goods can be taken very seriously by the customs authorities and can result in a fine, goods being seized, or at worst: customs rejecting the entry of the shipment and then returning the package to the sender (under sender’s expenses). So to avoid customs delays and potential issues, please be honest with your paperwork!