Video Tutorials・Customs Valuation・2026-06-26・Last updated:
Many people assume that when importing goods, “Customs will simply assess tax on whatever value I declare.” That is incorrect. Customs must follow a legally prescribed sequence when determining customs value. In the video, the founder of HowBridge recites all six methods in one go: the transaction value method, transaction value of identical goods, transaction value of similar goods, deductive value method, computed value method, and fallback method. Once you understand these six steps, you will see why “truthful declaration + complete documentation” is always the least expensive approach.
30-second summary: Taiwan Customs determines customs value under Articles 29 through 35 of the Customs Act, applying six methods in sequence: ① Transaction value method (§29: the price actually paid or payable, plus freight, insurance, and other required additions) → ② Transaction value of identical goods (§31) → ③ Transaction value of similar goods (§32) → ④ Deductive value method based on the domestic selling price (§33) → ⑤ Computed value method (§34: calculated from costs plus profit) → ⑥ Reasonable means (§35: valuation based on information obtained by Customs). The first method is generally the most favorable to importers, but only when the transaction documents are genuine and complete. If the declared price is clearly unreasonable or cannot be substantiated, Customs will move down the sequence. The resulting value is usually higher than the invoice price and may also lead to penalties for false declaration.
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Taiwan Customs’ valuation sequence for imported goods: 1. Transaction value method, 2. Transaction value of identical goods, 3. Transaction value of similar goods, 4. Deductive value method, 5. Computed value method, 6. Fallback method #TaiwanDedicatedShipping #HowBridge
The most valuable part of this video is that it covers the entire “valuation sequence,” something most people have never heard of, in just 15 seconds. This is not mere trivia—it determines how much tax you actually pay on every shipment. Import duty, commodity tax, and business tax are all calculated on the basis of the “customs value” (see our three-tax calculation guide), and that value is determined through these six methods.
The sequence reflects the principles of the WTO Customs Valuation Agreement: priority is given to the genuine transaction value agreed between the buyer and seller. Customs moves step by step to an alternative method only when the transaction value cannot be used, such as when there is no sale, a related-party relationship affects the price, or the documentation is inaccurate.
The six methods follow a strict sequence: a later method is used only when the preceding method cannot be applied. You cannot skip ahead and select whichever method is most favorable to you:
| Priority | Method | Legal Basis | Plain-English Explanation |
|---|---|---|---|
| 1 | Transaction value method | Customs Act §29 | The calculation starts with the price you “actually paid or must pay,” with required additions such as freight and insurance borne by the buyer. The vast majority of goods are valued under this method. |
| 2 | Transaction value of identical goods | §31 | If the transaction value cannot be used, Customs refers to previously determined customs values for “identical goods” imported around the same time—goods from the same country of production with the same quality and specifications. |
| 3 | Transaction value of similar goods | §32 | If no identical goods can be found, Customs looks at “similar goods”—products with comparable characteristics, materials, and functions that are commercially interchangeable. |
| 4 | Deductive value method based on the domestic selling price | §33 | Customs starts with the selling price of the goods, or identical or similar goods, in Taiwan and deducts domestic profit, freight, taxes, and other permitted items to work backward to the import value. |
| 5 | Computed value method | §34 | Customs calculates the value from the production side: raw materials + manufacturing costs + profit + freight and insurance, producing a reasonable customs value. |
| 6 | Reasonable means (fallback method) | §35 | If none of the first five methods can be applied, Customs determines the value through reasonable means based on the information it has obtained. This method allows the greatest degree of discretion. |
“Transaction Value” Is Not Simply Whatever Appears on the Invoice：The transaction value under §29 must be verifiable: the invoice, order, and payment records must all match. If a related-party transaction, such as purchasing goods from your own overseas company, affects the price, Customs may reject it and proceed to the subsequent valuation methods.
Why is underdeclaration almost certain to be detected? Because Customs conducts valuations every day, and every declaration and every determined value is entered into its price database. As soon as your declared unit price enters the system, it can be compared with historical customs values for identical or similar goods. This database is the source of the information used for the second and third methods: the transaction value of identical or similar goods.
If the declared value is clearly below the database range, Customs will request additional transaction documents, such as proof of payment or screenshots of the platform order. If you cannot provide them or the records do not match, Customs will proceed to a later valuation method. The resulting value will usually be much closer to the prevailing market price and far higher than the underdeclared amount. You will still have to pay the additional tax and may also be penalized for false declaration under Article 37 of the Customs Anti-smuggling Act.
Customs Has Seen Every Common Underdeclaration Tactic：“Setting the invoice amount at 3 tenths of the actual value,” “declaring merchandise as a gift sample,” or “splitting one shipment across multiple low-value invoices”—Customs’ price database and big-data comparisons flag all of these as high-risk indicators. They only increase the likelihood of inspection and reassessment.
The Most Favorable Strategy for You：Declare truthfully and keep complete documentation so the valuation remains under the first method and uses the genuine transaction value. Prices actually paid on Taobao or Pinduoduo are often already lower than the prevailing values in Customs’ database. Truthful declaration therefore gives you the lowest lawful value.
Follow these four practices, and customs valuation is unlikely to bring any surprises:
Declare the amount actually paid and provide screenshots of the order and payment. If Customs has questions, it may request additional documents or an explanation. When a genuine promotional price is supported by documentation, the transaction value method (§29) still uses the amount actually paid. The problem is not that the price is low—it is being unable to prove it.
Yes. If you disagree with the determined customs value, you may apply for a review within the statutory period under the Customs Act. If you disagree with the review decision, you may file an administrative appeal and subsequently initiate administrative litigation. In practice, first provide the complete transaction documents and communicate with Customs; most disputes can be clarified before the formal review stage.
If the transaction value method cannot be applied, Customs will proceed in sequence to the value of identical or similar goods or another valuation method. In practice, Customs often refers to the market price of new goods and applies an appropriate adjustment. Keep any evidence showing how you acquired the goods, such as an auction listing or transfer record, and truthfully declare the acquisition price.
The customs value includes freight and insurance up to the port of importation, consistent with the CIF concept, as calculated under Customs regulations. HowBridge’s tax estimate accounts for common scenarios, but the actual amount remains subject to Customs’ final determination.
No. §35 still requires Customs to determine the value “through reasonable means based on information obtained,” and it may not use unreasonable benchmarks such as the domestic selling price in the exporting country or an arbitrarily assigned value. This discretion remains legally constrained, and the importer may still seek relief through the review process.
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This article is based on Articles 29～35 of the Customs Act and publicly available official information. It is provided for general reference only and does not constitute legal advice for any specific case. The determination of customs value and the applicable review procedures are subject to the current regulations of the Customs Administration, Ministry of Finance, and the actual determination made by Customs. Consult a professional customs broker when necessary.
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