Entry value is the reported price of an imported product, declared by the seller on shipping documents. Customs officials and shipping companies use this value to calculate customs, duties, freight, and insurance costs. Some countries have laws requiring supporting documentation for accurate reporting. Gifts may have lower customs duties, but laws may require inspection to ensure compliance.
Entry value is the reported price of an imported product based on information provided by the seller. It can also be called the declared value. The seller lists this price on the shipping documents when he sells a product to an international buyer. Customs officials rely on this reported value data when calculating customs and duties on imported goods. Shipping companies may also refer to this value when determining the cost of freight or insurance for the product.
Each product may have two different declared value figures, both based on vendor reports. The first is the value of transportation. The cart input value is typically the same as the seller’s cost to produce the item. The shipping company often refers to this value when determining freight costs, although not all shipping companies price freight based on input value. Insurance companies also look at the down payment of the car when setting insurance limits for the product or calculating a claim payout.
The entry value for customs is often much higher than the entry value for transport. The customs entry value represents the sale price of the product, or the price that the seller is charging the buyer for the purchase of the goods. Customs officials focus on the customs entry value when calculating customs duties or taxes due on imports. They are much less likely to pay attention to the entry value of the car, just as shipping and insurance companies pay little attention to the entry value of customs.
Since the vendor reports input values, it is common for these values to be inaccurate. For example, the seller may want to report this figure to the shipping company in an effort to save on freight. Sellers may also reach an agreement with buyers to underreport customs value in an attempt to reduce duties and taxes.
In an effort to reduce fraud and misrepresentation of import values, some countries have laws in place that require supporting documentation for these figures. In the United States, all imported goods must be accompanied by a commercial invoice, or invoice, that reveals the true selling price of the good. Insurance and freight companies may also require supporting documents related to the seller’s costs to produce and ship the items.
Some countries allow people to import or export items as gifts as long as the declared value is less than a certain amount. When items are sent as gifts, customs duties are generally low or non-existent. To reduce the risk of fraud, customs laws may require that gifts can only be sent from person to person, and not from one company to another. Agents may also inspect the property to ensure that the true value is within the requirements established by law.
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