How to Calculate Import VAT and Landed Cost
When you import goods, the final cost is not only the product price. You must also add freight, insurance, customs duty, VAT or GST, port charges and clearance charges. This final amount is called the landed cost.
What Is Landed Cost in Importing?
Landed cost is the total cost of bringing a product from the supplier’s country to your warehouse or customer. It helps importers decide the correct selling price and profit margin.
Landed Cost Formula
Landed Cost = Product Cost + Freight + Insurance + Customs Duty + VAT/GST + Clearance Charges + Local Transport
How Is Import VAT Calculated?
In many countries, import VAT is calculated on the customs value plus applicable customs duty. The exact rule depends on the destination country and product classification.
Import VAT = (Customs Value + Customs Duty) × VAT Rate
Import VAT Example
If customs value is $10,000, customs duty is $1,000 and VAT rate is 20%:
($10,000 + $1,000) × 20% = $2,200 import VAT
Why Landed Cost Is Important
- It helps set the correct selling price
- It prevents underestimating import expenses
- It shows the real profit margin
- It helps compare suppliers and shipping options
Use Our Free Calculators
Use our Import VAT Calculator to estimate VAT, duty and landed cost. For duty-only estimates, use the Customs Duty Calculator.
Calculate Import VATFAQs
What is landed cost in importing?
Landed cost is the total cost after adding product cost, freight, insurance, duty, VAT/GST and clearance charges.
How is import VAT calculated?
It is generally calculated on customs value plus applicable customs duty, based on destination country rules.