How to calculate customs value correctly: Transport costs, free samples, and the Passar “border value”

Anyone moving goods across borders will recognize the situation: the commercial invoice is available and the amount appears unambiguous. Once the import declaration is prepared, however, it quickly becomes clear that the invoice total can only be the starting point. Freight, insurance, packaging, royalties, or domestic costs already included in the price may change the value that has to be declared.

Errors in customs valuation have a direct effect on duties and other import charges. They lead to questions, corrections, post-clearance payments, and potentially delays across the supply chain. That makes it essential to distinguish clearly between customs value, the import VAT taxable amount, and Switzerland’s border value.

Customs value, import VAT, and border value: three different figures

Where duty is charged as a percentage of value, the customs value provides the basis for calculating import duty. In the EU, it usually starts with the transaction value: the price actually paid or payable, adjusted by the additions and deductions required by customs law.

The taxable amount for import VAT generally goes further. It starts with the customs value and also includes elements such as import duties and certain incidental expenses up to the first place of destination in the country of import. Customs value and the import VAT base can therefore differ even though the goods are identical.

Companies filing declarations in Switzerland’s Passar system will also encounter the border value. It serves foreign-trade statistics and broadly represents the invoiced value of the goods delivered to the Swiss border: the goods price or value plus transport, insurance, and other costs up to the border, less discounts and cash discounts, and excluding import charges. In Passar export declarations, the border value is entered in the invoice currency and the system converts it into Swiss francs.

The distinction matters: the border value is a separate declaration figure. It is not automatically identical to the customs value or the taxable amount for import VAT.

Transport, insurance, and Incoterms: What belongs in the customs value?

The practical question is: What was the value of the goods at the relevant place of introduction into the customs territory? In the EU, depending on the mode of transport, that may be the first port, airport, or border location through which the goods enter.

The agreed Incoterms® help identify which costs are already included in the invoice price and which are paid separately by the buyer. They do not replace the customs valuation rules.

• Additions, for example under EXW, FCA, or FOB: If freight, loading, handling, and insurance up to the place of introduction are not included in the invoice price, the relevant amounts generally have to be added. Depending on the case, packaging, buyer-supplied materials or tools, and certain royalties may also form part of the customs value.
• Deductions, for example under DAP or DDP: If the invoice price already includes transport after the customs border, those costs can be left out of the customs value when the post-entry portion is objectively distinguishable and supported by evidence.
• End-to-end freight invoices: When one freight invoice covers transport both before and after entry into the customs territory, the amount needs to be split on a defensible basis. A separate cost statement from the carrier is stronger evidence than a broad estimate.

A simplified EU example shows the difference:

1. Ex-works invoice price: EUR 10,000
2. Freight to the port of entry: EUR 1,200
3. Onward transport from the port to the destination: EUR 300
4. Customs value: EUR 11,200

The EUR 300 onward transport does not increase the customs value in this example, but it may be included in the import VAT taxable amount together with the customs duty.

When there is no purchase price: the six customs valuation methods

The Union Customs Code provides six valuation methods in the EU. As a rule, they are considered in a fixed order. Only the deductive method and the computed-value method may be reversed at the importer’s request.

1. Transaction value of the imported goods: The price actually paid or payable, adjusted by the additions and deductions required by law.
2. Transaction value of identical goods: An accepted value for identical goods exported to the EU at or around the same time.
3. Transaction value of similar goods: A comparable value for goods with similar characteristics, materials, and functions from the same country of production.
4. Deductive method: The starting point is the EU selling price of the imported goods or identical or similar imported goods. Usual profit margins, duties, and domestic costs are then deducted.
5. Computed value: This method uses material and production costs plus an appropriate amount for profit and general expenses, together with the relevant transport and insurance costs.
6. Fall-back method: The preceding methods are applied with reasonable flexibility using the data available in the EU.

The transaction-value method may still be available for an intra-group shipment. The key issue is not the relationship alone, but whether it influenced the price and whether the declared value can be substantiated for customs.

The zero-euro trap for free inserts, samples, and replacements

Complimentary goods are a common stumbling block in e-commerce and industrial spare-parts operations. Marketing inserts, warranty replacements, and free samples may not create a separate payment. They still need a reasonable and supportable value in the customs declaration.

A pro-forma invoice may clearly state that an item is supplied free of charge. It should not simply replace the value for customs purposes with EUR 0.00.

The first question is whether the complimentary item forms part of the same sale as the paid goods. If it does, the total price may need to be allocated reasonably across the individual items. If there is no sale for export and therefore no transaction price for the free item, the remaining valuation methods have to be considered in their prescribed order.

Depending on the circumstances, useful supporting evidence may include:

• previously accepted customs values for identical or similar goods,
• regular selling prices and market prices,
• reliable manufacturer calculations,
• material, production, and overhead costs,
• previous imports of the same replacement parts or samples.

A clear invoice line might read: “Free sample — value for customs purposes: EUR 15.00; no payment due.” The amount must fit the specific product and valuation method. For Swiss import VAT, free samples, gifts, and free replacement deliveries are likewise generally assessed using their market value.

A zero value may trigger a technical rejection, a customs query, or a later correction. The real risk is therefore not the word “free,” but a declared value that cannot be explained or supported by evidence.

A defensible operational workflow

Teams that calculate customs values regularly should not reinvent the process for every shipment:

1. Review the invoice and delivery term: Which costs are included, and who pays them?
2. Identify the relevant border location: Where do the goods enter the customs territory?
3. Separate the costs: Record pre-entry freight, post-entry freight, packaging, insurance, and other charges independently.
4. Select a valuation method for each item: Review free goods and intra-group deliveries separately.
5. Retain the evidence: Keep invoices, freight statements, calculations, price lists, and valuation decisions together.
6. Validate the declaration figures: Do not confuse customs value, the import VAT base, statistical value, or the Passar border value.

Conclusion: Customs valuation is a data process

Correct customs valuation does not begin in the customs system. It begins with structured invoice, product, transport, and Incoterms data. The earlier that information is complete, the easier it becomes to review additions, deductions, and special cases in a transparent way.

Digital customs software such as Declarium can bring invoice and shipment data into a controlled workflow, make missing information visible, and prepare the figures and supporting documents needed for ATLAS- or Passar-related processes. Complex royalty structures, transfer prices, or unusual intra-group supplies may still require review by experienced customs specialists.

Handled this way, customs value stops being a weak point in the supply chain and becomes a well-documented part of the import process.