Answer

What Is the Difference Between Duty and Tax?

Direct answer: duty is a customs charge on goods crossing a border; tax is a domestic consumption charge. Learn how each applies to ecommerce imports, what appears on a commercial invoice, and how the Import Duty Calculator models both.

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Answer summary
Question

What is the difference between duty and tax on imported goods?

Direct answer

Import duty is a charge imposed by customs on goods entering a country — it is based on the product's HS code, origin, and customs value. Import tax is a domestic consumption charge (such as VAT or GST) applied to the sale or importation of goods — it is typically calculated on the duty-inclusive value. Both appear separately on import documents.

What you need
  • The HS code for the imported goods
  • The country of origin of the imported goods
  • The customs value (transaction value plus freight and insurance)
  • The applicable duty rate and additional tariff rate
  • The destination country's tax rate (VAT/GST) and taxable base
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Source note

Verify the final code, rate, origin treatment, and document requirements in official destination sources before filing or shipping.

Last reviewed

July 2026

Import duty: what it is and how it is calculated

Import duty is a customs charge imposed on goods when they cross an international border. It is levied by the customs authority of the importing country and is based on the customs value of the goods, the HS code, and the country of origin. The duty rate is expressed as a percentage of the customs value. Additional tariffs (such as Section 301 tariffs on China-origin goods) are applied on top of the base duty rate in some markets.

  • Duty is calculated as: customs value × duty rate.
  • The customs value is the transaction value plus freight, insurance, and certain other additions.
  • The duty rate depends on the HS code and the country of origin — the same product from a different origin can face a different duty rate.
  • Additional tariffs are applied as a percentage on top of the base duty in some origin-destination pairs.
  • Duty is paid to the customs authority at the time of importation.

Import tax: what it is and how it is calculated

Import tax (such as VAT in Europe, GST in Australia and Canada, or state sales tax in the US) is a domestic consumption tax applied to the sale, delivery, or importation of goods. It is separate from import duty and is typically calculated on the duty-inclusive value. In some countries, import VAT or GST is collected by the customs authority at the time of importation; in others, it is collected by the seller or platform at the point of sale.

  • Tax is calculated as: (customs value + duty + additional tariffs) × tax rate.
  • The tax rate varies by destination country and product category (some goods are zero-rated or exempt).
  • VAT and GST are the most common import taxes for ecommerce destinations.
  • In the US, federal excise taxes may apply to specific product categories on top of any duty.
  • Some countries have a de minimis threshold below which no duty or tax is charged on imports.

How duty and tax appear on import documents

On a commercial invoice, the customs value and declared value are listed as line items. The duty and tax are not shown as line items on the invoice itself — they are calculated by the customs authority and assessed on arrival.

  • Commercial invoice shows: item price, quantity, total value, HS code, country of origin, Incoterms.
  • Duty is assessed by customs on arrival based on the HS code, origin, and customs value.
  • Tax is calculated on the duty-inclusive value and collected at customs or at the point of sale.
  • The landed cost is the sum of product cost, freight, duty, taxes, and fees.
  • TariffCatalog calculators model each component so you can see the estimate before filing.

Common confusion: duty vs tax vs tariff

The terms duty, tax, tariff, and levy are often used interchangeably, which creates confusion. In ecommerce import contexts, the practical distinctions matter for planning and pricing.

  • Duty (or customs duty): charged by customs on goods entering a country; based on HS code and origin.
  • Tariff: often used interchangeably with duty; in modern usage, can also refer to the published schedule of duty rates.
  • Tax (VAT, GST, sales tax): a domestic consumption charge; calculated on the duty-inclusive value.
  • Levy: a generic term for any charge; can refer to duty, tax, or special fees depending on context.
  • Additional tariff (e.g., Section 301): an extra duty layer applied by the US on specific origin-product combinations.
Editorial

About this answer

Written by TariffCatalog Editorial Team

Maintained by Ryan Cole. Reviewed for customs-data workflow clarity. Last reviewed: July 2026.

This page follows TariffCatalog's methodology for customs data preparation, estimate-only calculations, and document draft workflows.

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Maintainer

Reviewed by Ryan Cole

Ryan Cole maintains TariffCatalog from the perspective of a long-time ecommerce operator with 15+ years of experience in product catalog, international shipping, and pre-shipment data workflows. This page is reviewed for customs answer clarity, source-check clarity, and estimate-only or candidate-only wording.

TariffCatalog is a preparation aid, not a customs broker, legal, tax, or freight-forwarding service. Verify final classifications, rates, documents, and filing treatment with official sources or qualified professionals.

Official Source Note

Verify before filing

USITC HTS

Use this official source to verify final classification, duty rate, and customs requirements.

CBP

Use this official source to verify final classification, duty rate, and customs requirements.

EU TARIC

Use this official source to verify final classification, duty rate, and customs requirements.

UK Trade Tariff

Use this official source to verify final classification, duty rate, and customs requirements.

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FAQ

Common questions

Is import duty the same as a tariff?

In practice, yes — tariff and duty are often used interchangeably to mean the charge imposed by customs on imported goods. Tariff can also mean the published schedule of duty rates.

Is VAT the same as import duty?

No. Import duty is charged by customs and is based on the HS code and origin. VAT or GST is a domestic consumption tax charged on the sale or importation of goods. VAT and GST are typically calculated on the duty-inclusive value.

How is the landed cost different from the duty?

The landed cost is the total cost of getting a product from the supplier to the buyer's door, including the product cost, international freight, duty, taxes, and fees. The duty is only the customs charge. The Landed Cost Calculator combines duty, tax, and freight.

Do I pay duty and tax separately?

Yes. Duty is paid to the customs authority at the time of importation. Tax is either paid to customs at the same time (for import VAT) or collected separately at the point of sale (for marketplace-collected VAT or GST).

Is there a threshold below which no duty or tax is charged?

Most countries have a de minimis threshold — a value below which no duty or tax is charged on imports. Check the current de minimis threshold for the destination country using the De Minimis Calculator.

What is the difference between duty and a customs fee?

A customs fee (such as the US MPF or HMF) is a processing fee charged by the customs authority or carrier for processing the import entry. It is separate from the duty rate and is typically a flat fee or a small percentage of the customs value.

Last reviewed: July 2026

Disclaimer

TariffCatalog provides candidate HS code suggestions, estimate-only calculators, and document drafts. Verify final classifications, duty rates, document requirements, and filing obligations with official sources, carriers, brokers, or destination authorities before filing or shipping.