CIF (Cost, Insurance, Freight)
Customs Valuation · Valuation Basis
What is CIF (Cost, Insurance, Freight)?
CIF (Cost, Insurance, Freight) is a customs valuation method where duty is calculated on the goods' price plus the cost of international shipping and insurance to get them to the destination port - not just the item's price alone.
Most of the world, including the EU and UK, values imports on a CIF basis, which means a product with expensive freight or insurance faces a higher duty bill than the same product shipped more cheaply, even at an identical item price.
Picture your order's "official value" for tax purposes as more than just the price tag - under CIF, customs adds the cost of getting it to you (shipping and insurance) before calculating what you owe, so a pricier shipping option quietly raises your tax bill too.
When to Use It
CIF matters when estimating duty for a destination that uses it - since duty is calculated on price plus shipping plus insurance, underestimating any of those three inflates the duty estimate, and overestimating them understates it.
It's easy to assume duty is only ever calculated on the item's price. Under a CIF valuation, shipping and insurance costs are folded directly into the taxable base - a cheap item with expensive express shipping can face more duty than expected precisely because of that added freight cost.
Frequently Asked Questions About CIF (Cost, Insurance, Freight)
Which regions use CIF valuation?
The EU and UK are the most prominent examples among the destinations this site covers - duty there is calculated on the combined goods, shipping, and insurance value, not the item price alone.
Does CIF include the cost of insurance even if I didn't buy shipping insurance separately?
Yes, in principle - customs valuation typically includes a reasonable insurance cost as part of the CIF value, whether or not the buyer purchased a separate insurance product.
How is CIF different from FOB?
FOB values goods at their price at the port of export only, excluding international freight and insurance - CIF adds those two costs into the taxable value, which usually results in a higher customs value for the same shipment.
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