Landed cost and what goes into it

Landed cost is the total it takes to get goods from the seller to a buyer in another country: the price of the goods, shipping and insurance, customs duty, any additional duties, import VAT, GST or excise, and the government and carrier fees charged on the way in. The same order can land at very different totals in two countries, because each one taxes a different base at a different rate.

Rules as of 30 October 2026.

What does landed cost include?#

Landed cost includes up to eight kinds of charge, and which apply depends on the destination, the product's tariff code and the country where it was made. Some are percentages of a value, some are fixed amounts, and the import tax is usually charged on top of the duty, so the parts can't simply be added as rates.

Currency conversion sits across all of these. Customs converts the invoice into its own currency at an official rate, and the buyer may pay in a third currency.

Which government fees are part of landed cost?#

Government fees are charges customs makes for processing the import, separate from duty. The United States and the European Union show the two common shapes: a fee that scales with value up to a cap, and a flat fee per item. Both change, so check the year's amounts before building them into prices.

In the United States, the merchandise processing fee on a formal entry is 0.3464% of the customs value. For fiscal year 2027, which began on 1 October 2026, it is at least $34.58 and at most $670.86. An automated informal entry pays $2.77. Shipments through an express carrier's facility don't pay that informal fee; the carrier pays CBP $1.38 for each individual air waybill instead.

How is landed cost calculated?#

Landed cost is calculated in a fixed order, because each step feeds the next: the code and origin set the duty, the customs value sets what it's charged on, and the duty becomes part of the import tax base. Skipping a step, or taking them out of order, is how an estimate comes out too low.

1. Classify the product to the destination's full tariff code. The HS code classifier gives the national code with its official description.
2. Record the country of origin: where the product was made, not where it ships from.
3. Work out the customs value on the destination's basis, which either includes transport and insurance to the border or leaves them out. The duty calculation guide covers both.
4. Check the value against the destination's de minimis thresholds for duty and for tax.
5. Apply the duty rate for the code and origin, then any additional duties for that product and origin.
6. Build the tax base, usually the customs value plus duty, and apply the import tax rate. The import tax rates guide lists each country's base.
7. Add government fees and the carrier's charges, and convert everything into the buyer's currency.

Worked example: the same order to the US and Ireland#

The same order shows how much the destination changes the total. The order is 10 cotton T-shirts made in Vietnam, sold for 240 with 30 shipping, sent by express courier to a consumer. The amounts are in US dollars for the United States and in euros for Ireland, which is in the EU.

Three things drive the difference. The United States leaves international shipping out of the customs value and Ireland includes it. The United States has no federal import VAT, while Ireland charges VAT on the customs value plus the duty. And the US total carries the Section 301 duty on goods of Vietnam that has applied since 24 July 2026; the Section 301 guide lists the rate for each economy.

Two details matter at the edges. In the United States, an article valued over $250 classified in chapter 99, subchapter III or IV, needs a formal entry, so a single line of shirts worth more than $250 would also pay the merchandise processing fee, at least $34.58. In the EU, shirts of Vietnamese origin can enter at 0% under the EU's agreement with Vietnam when the goods meet its rules of origin and the declaration carries proof of it; the example assumes no claim. Neither total includes the carrier's own clearance charge.

Common questions#

Is shipping part of landed cost?#

Yes, always. Whether duty is also charged on the shipping depends on the destination: the EU includes transport to the border in the customs value, while the United States and Canada leave international transport out.

Does US landed cost include sales tax?#

Not at the border. The United States has no federal import VAT, and state sales or use tax is collected domestically by the seller, a marketplace or the buyer, as the VAT, GST and sales tax guide explains.

Who pays the landed cost?#

It depends on the shipping terms. Under DDP the seller collects it at checkout and pays it at import; under DAP the buyer pays the duty, tax and carrier fees on arrival. The DDP guide compares the two.

How do I get an exact landed cost for my product?#

Run the code, origin, destination, value and shipping through a calculator with current rates. The landed cost calculator returns every duty, tax and fee line with the rate and source it used.

Sources#

• WTO: Agreement on Implementation of Article VII of the GATT 1994 (Customs Valuation Agreement) (opens in a new tab), World Trade Organization, 1994
• 19 CFR 152.102 and 152.103: transaction value (opens in a new tab), eCFR, current as of 27 October 2026
• 19 CFR 143.21: merchandise eligible for informal entry (opens in a new tab), eCFR, current as of 27 October 2026
• Customs User Fees To Be Adjusted for Inflation in Fiscal Year 2027 (opens in a new tab), U.S. Customs and Border Protection, Federal Register, 2026-07-31
• Harmonized Tariff Schedule of the United States, 2026 Revision 21 (opens in a new tab), U.S. International Trade Commission, effective 2026-10-09
• Notice of Actions in Section 301 Investigations of Various Economies Related to Forced Labor (opens in a new tab), Office of the U.S. Trade Representative, Federal Register, 2026-07-28
• TARIC duties export, chapters 01 to 99 (opens in a new tab), European Commission, downloaded 2026-10-30
• Buying goods from outside the European Union (opens in a new tab), Revenue (Ireland), published 2026-07-01
• The temporary EUR 3 customs duty and the Union handling fee: guidance for Member States and trade (opens in a new tab), European Commission, version of 2026-10-05