When you ship goods internationally, you must declare a value for the items you're sending. This is used in conjunction with the Importer of Record (IoR) on your Commercial Invoice, and it's a crucial piece of information for customs authorities.
An accurate declared value is essential for a smooth customs clearance process. An incorrect valuation can lead to delays, fines, or seizure of your goods.
This article covers the declared value, the Importer of Record, and how Shippit determine these things when creating your commercial invoice. For more information about the various documents required for international shipping, see the international documentation article.
What is a declared value?
The declared value is the monetary worth of your shipment, as stated on the customs documentation. Customs officials in the destination country use this value to assess any applicable duties and taxes.
There are three possible values that you can use as the declared value:
Selling price
Sometimes called the transaction price, checkout price, or final price.
This is the price that your customer has paid for the item, and includes all duties and taxes.
In most cases, the selling price is used as the declared value.
Retail price
Sometimes called the listed price, the before-tax price, the suggested retail price, or the catalogue price.
This is the price of the item before duties and taxes have been applied. It is often the price of an item that is shown in a catalogue or store front, and it can be the same as the selling price.
Use this as your declared value if you want to show the pre-tax retail value of the goods.
Cost price
Sometimes called the wholesale price.
This is the amount it cost you to produce or acquire the item, before any discounts, markups, or pricing rules have been applied.
If you have an entity in the receiving country that is accepting the goods as a B2B transaction, then this is usually the declared value. If you use the cost price as your declared value, you must also declare the importer of record (IoR) on your commercial invoice.
⚠️ IMPORTANT: If you have the importer of record (IoR) set up in your Shippit account, it is shown on the Commercial Invoice, regardless of which price you use as your declared value. However, the IoR is only required if you choose to use the cost price as the declared value.
Declared value and the commercial invoice
The declared value is a key field on the commercial invoice. The commercial invoice is the primary document used for customs, and it's essential for getting your shipment cleared and delivered.
Declaring an accurate value for your goods is a legal requirement. It's important for several reasons:
Customs clearance: The declared value is used to clear your goods through customs. Without it, your shipment will be held until the value is provided and verified.
Duties and taxes: Customs authorities use the declared value to calculate the duties, taxes, and fees that need to be paid on the shipment. An accurate declaration ensures that you or your customer pays the correct amount.
Insurance: The declared value is also used to determine the maximum amount you can claim if your shipment is lost or damaged in transit.
By default, Shippit creates the commercial invoice using the retail price of the items in the order, as set in your product details. If your retail price already includes duties and taxes, this could mean you end up paying extra duties on the invoice. To avoid this, you can choose to use a different value as the declared value on all your commercial invoices. If you need to adjust which value is used on your commercial invoices, contact your Shippit Account Manager, or contact support.
Who is responsible for the declared value?
The Importer of Record (IoR) is the person or entity who is legally responsible for ensuring that a shipment of goods complies with all the legal requirements and regulations of the destination country. The IoR is ultimately responsible for the accuracy of the information on the customs documents, including the declared value.
The IoR is the merchant’s designated party in the destination country and is generally the merchant, their local entity, or their appointed partner in the destination market.
The Importer of Record must:
Provide complete and accurate import documentation.
Ensure all product values, descriptions, and HS codes are correctly declared.
Pay any duties, taxes, and fees associated with customs clearance.
Because the IOR is the liable party, they must be a reliable entity with the authority and willingness to take on these responsibilities.
If you have IoR details set up in your Shippit account, it is shown on the Commercial Invoice, regardless of which price you use as your declared value. However, the IoR is only required if you choose to use the cost price as the declared value.
You can configure your IoR information based on which country you are shipping to.
If you need to change or update your IoR information in your Shippit account, contact your Shippit Account Manager, or contact support.