The DDP price on a sales invoice is not automatically the customs value for a U.S. import. U.S. customs valuation normally starts with the price actually paid or payable for goods sold for export to the United States, then applies the additions and exclusions required by 19 U.S.C. 1401a. A DDP invoice often combines goods, international freight, insurance, duty, inland delivery and service charges, so those components must be identified and supported before the broker declares a value.
When transaction value is available and acceptable, begin with the total payment made or to be made by the buyer to or for the benefit of the seller for the imported merchandise. Add any required amounts not already included, such as packing, buyer-paid selling commissions, apportioned assists, dutiable royalties or license fees, and qualifying resale proceeds. International freight, insurance and related services from the country of exportation to the U.S. place of importation are excluded from the price actually paid or payable, but the claimed amount must be identifiable and supported.
Do not reverse-engineer a value by subtracting every logistics cost from a single DDP total. First identify the actual sale, payment structure and statutory valuation method. Then document each adjustment. The DDP commercial invoice checklist explains how to present a transparent invoice for the broker.
DDP is a delivery term, not a customs valuation method. A seller may quote one amount covering the merchandise and multiple services through final delivery. Customs law asks different questions: Was there a sale for exportation to the United States? What was the total payment for the merchandise? Are the buyer and seller related? Which additions are required? Which costs are legitimately excluded or separately deductible?
The party acting as importer of record remains responsible for using reasonable care. A broker can transmit the declaration but cannot manufacture missing cost evidence. Confirm the party structure using the guide to importer of record, consignee and broker roles, and ensure the broker is properly authorized under the DDP customs power-of-attorney checklist.
Under 19 U.S.C. 1401a(b), transaction value is the price actually paid or payable for merchandise when sold for exportation to the United States, plus five categories of statutory additions when they are not already included and sufficient information is available. Transaction value also has eligibility conditions, including rules for restrictions, indeterminable conditions, resale proceeds and related parties.
A DDP quotation may include costs that are not part of transaction value if the law permits their exclusion and the amounts are separately identified. The most common examples are international transportation, insurance and related services incident to the international shipment. Reasonable post-importation transportation, installation, assembly, maintenance or technical assistance may also be excluded under the applicable statutory conditions. U.S. customs duties and qualifying federal taxes payable because of importation are excluded when separately identified.
CBP guidance states that a CIF or duty-paid total is not itself the value to declare. The safe practice is to record the merchandise price and each freight, insurance, duty and delivery component rather than state only one all-inclusive number.
An assist can exist when the buyer supplies certain items directly or indirectly, free of charge or at reduced cost, for use in producing or selling the imported merchandise for export to the United States. The statutory categories include materials or components incorporated into the goods; tools, dies, molds and similar production items; merchandise consumed in production; and certain engineering, development, artwork, design work, plans or sketches undertaken outside the United States and necessary for production.
Common DDP examples include buyer-owned molds sent to a factory, free components delivered to the producer, packaging artwork developed abroad, or engineering work supplied at a reduced charge. The value must be determined and apportioned on a reasonable basis. The importer should document the original cost or production cost, depreciation or prior use where relevant, transport to the producer, the units or period covered and the allocation method.
Do not add an assist twice. If the seller’s price already recovers the full value, confirm how it is reflected before making a separate adjustment. If sufficient information is unavailable for a required addition, transaction value may not be determinable.
A royalty or license fee is not automatically dutiable merely because it relates to a brand or product. The statutory question is whether the payment relates to the imported merchandise and whether the buyer must pay it, directly or indirectly, as a condition of the sale for exportation to the United States. The contracts and actual commercial behavior matter more than the label used on an invoice.
Review the sales agreement, license agreement, intellectual-property owner, payment recipient, calculation basis, right to purchase without the license, termination clauses and relationships among the parties. A percentage of U.S. resale revenue, a payment to a third-party licensor or a fee described as “marketing support” still requires analysis. Do not classify the payment from its name alone.
Buyer-paid selling commissions are one of the statutory additions. A bona fide buying commission is generally treated differently, but the importer must be able to show that the agent represents the buyer and does not perform seller-controlled functions. Retain the agency agreement, correspondence, service description and payment flow.
Payments need not move directly from buyer to seller to affect price actually paid or payable. A payment to a third party that satisfies a seller obligation, a debt settlement, a rebate arrangement or another indirect benefit can require review. Give the broker the complete payment structure, not only the face value of the commercial invoice.
A related-party price is not automatically rejected, but transaction value is acceptable only if the relationship did not influence the price or the value meets an applicable test-value comparison. Transfer-pricing documentation prepared for income-tax purposes may help explain the commercial arrangement, but it does not automatically prove acceptability under customs law.
Identify related parties before entry, document how the import price was set and establish a process for later transfer-pricing adjustments. Post-import rebates or price decreases may not reduce transaction value, while upward adjustments can create additional duty obligations. Obtain customs advice on reconciliation, prior disclosure or other correction procedures when values change.
U.S. law provides a sequence of alternative methods: transaction value of identical merchandise, transaction value of similar merchandise, deductive value, computed value and a fallback method derived from the earlier methods. The choice is not arbitrary. Non-sale transfers, consignment, free samples, related-party problems or missing information can make transaction value unavailable.
A zero-price invoice does not create a zero customs value. Describe the reason for the transfer and provide the records needed for the appropriate method. Ask the broker or customs adviser to document why the selected method applies.
No. Identify the actual international transportation, insurance and related costs and retain evidence. Do not deduct an estimate, markup or bundled service amount merely because the quotation calls it freight.
Customs duties and qualifying federal taxes payable because of importation are excluded from transaction value when separately identified under the statutory rule. The commercial invoice and worksheet should show the amount clearly.
It may be. Buyer-supplied tools, dies, molds and similar items used in production are within the statutory assist categories when supplied free or at reduced cost. Determine the value and a reasonable apportionment.
No. Analyze whether the fee relates to the imported goods and is required as a condition of the sale for export. Contract language, payment flow, party relationships and actual commercial conduct are important.
Not automatically. The importer must establish which sale is the legally relevant sale for export and satisfy all requirements for transaction value, including statutory additions. A lower invoice cannot be selected solely to reduce duty.
This guide provides general operational information, not legal, tax or customs advice. Customs valuation depends on the complete transaction facts. Confirm the valuation method, adjustments and evidence with a licensed U.S. customs broker or customs counsel before entry.
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A practical guide to CBP Form 29 for DDP imports, covering proposed versus taken action, classification and value evidence, response planning, exposure review, liquidation and follow-up controls.
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A practical guide to responding to CBP Form 28 in DDP imports, covering response ownership, classification, valuation and origin evidence, document controls, corrections, certification and follow-up.
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A practical guide to U.S. customs valuation for DDP shipments, covering transaction value, international freight and duty deductions, assists, royalties, packing, commissions, related parties and supporting records.
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