Ad Valorem Duty

An ad valorem duty in US customs compliance is a tariff calculated as a percentage of the customs (dutiable) value of imported goods—generally the transaction value (price paid or payable for the merchandise, adjusted as required under US Customs law)—rather than a fixed amount per unit. For example, if the Harmonized Tariff Schedule rate for a particular product is 5% and the declared customs value of a shipment is $10,000, the importer must pay $500 in ad valorem duty (plus any applicable fees and taxes).