LandedPulseHow is landed cost calculated?
Landed cost is built in a fixed order: customs value first, then duty on that value, then any applicable surcharge, then tax over everything combined. Each step is a separate line in the report, so the total can be reproduced by hand.
Customs value is the starting point, and its basis depends on the destination. Most jurisdictions, including the EU and Brazil, combine the goods value with freight and insurance to the port of entry — the CIF basis. The United States taxes the transaction value without international freight and insurance — the FOB basis. Applying the wrong basis misstates the duty, and it is one of the most common errors in a manual landed cost estimate.
Duty is then applied to that customs value. Where a retaliatory or safeguard surcharge applies, it appears as its own line rather than being merged into the base rate, because the two rest on different legal instruments and can change independently.
Tax comes last, charged over the composed base — goods, freight, insurance, duty and surcharge together. This is why tax on an import exceeds tax on the same goods bought domestically, and why calculating it against the invoice price produces a figure that will not match the clearance.
Rounding is applied once, at the end. Intermediate values keep full precision, so the lines you see always add up to the total you see — no cent that appears from nowhere when finance checks the arithmetic.
Last reviewed . General guidance on import duty mechanics, not customs or tax advice for a specific shipment.