Compound duty is a type of import tax that combines two forms of taxation: ad valorem duties and specific duties. Ad valorem duties are based on the value of the goods being imported, while specific duties are calculated based on measurable attributes such as weight, volume, or quantity. This dual approach ensures that the tax reflects both the worth and the physical characteristics of the imported items.
Compound duty is primarily used in international trade law and customs regulations. It is relevant in the context of importation of goods into the United States. Businesses and individuals importing products must understand how compound duties apply to their shipments, as these duties can significantly impact the total cost of importing goods. Users can manage related forms and procedures through platforms like US Legal Forms, which provide templates for customs declarations and other necessary documentation.
Here are a couple of examples of abatement:
For instance, if a company imports electronics valued at $10,000 and the specific duty is $2 per unit for 100 units, the total compound duty would include both the ad valorem component and the specific duty component. This results in a comprehensive tax amount that the importer must pay to customs upon entry of the goods.
(Hypothetical example) A business importing furniture worth $5,000 with a specific duty of $50 per item for 20 items would calculate their compound duty based on both the value and the number of items.
| Term | Definition | Key Differences |
|---|---|---|
| Ad valorem duty | A tax based solely on the value of the goods. | Only considers value, not physical attributes. |
| Specific duty | A tax based on measurable attributes like weight or volume. | Only considers physical characteristics, not value. |
If you are importing goods and need to understand how compound duty applies, start by assessing the value and physical characteristics of your items. Use resources like US Legal Forms to access templates for necessary customs documentation. If your situation is complex or involves significant financial implications, consider consulting a legal professional for tailored advice.
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Ad valorem duties are based on the value of the goods, while specific duties are based on measurable characteristics like weight or volume.