How SARS determines your customs value
The Customs and Excise Act follows the WTO Customs Valuation Agreement. The primary method — used in the vast majority of commercial imports — is the transaction value method: the price actually paid or payable for the goods when sold for export to South Africa.
That transaction value is then expressed on an FOB basis at the port of export. Unlike many countries, South Africa does not add the international ocean freight and marine insurance to the customs value — so the customs value is an FOB number, not a CIF number. Customs duty is applied as a percentage of that FOB value. A statutory 10% uplift is then added to the FOB value (it stands in for the excluded freight and insurance) to reach the base for import VAT, called the Added Tax Value (ATV), and VAT (currently 15%) is charged on the ATV together with the duty.
In formula terms:
Customs duty = Customs value × duty rate %
Import VAT = (Customs value × 1.10 + Customs duty) × 15%
(For goods originating in the BLNS countries within the Southern African Customs Union — Botswana, Lesotho, Namibia, Eswatini — the 10% uplift is not added.)
What each Incoterm means for your customs declaration
The Incoterm determines what costs are already inside the invoice price, and therefore what your clearing agent must add or deduct to build back to the FOB customs value.
| Incoterm on invoice | What's already in the price | Adjustment to reach the FOB customs value |
|---|---|---|
| EXW | Ex-factory price only | Add origin inland transport + export/loading charges |
| FOB | Goods loaded on vessel at origin | None — the invoice already is the FOB value |
| CFR | Goods + ocean freight to destination port | Deduct the ocean freight |
| CIF | Goods + ocean freight + min. insurance | Deduct the ocean freight and insurance |
| DAP / DPU | Goods + freight + inland delivery (post-border) | Deduct freight, insurance and post-border delivery |
| DDP | Goods + freight + insurance + SA duty + VAT | Deduct freight, post-border costs and the SA duty/VAT |
Worked example: same goods, three Incoterms
Goods: stainless steel kitchen fittings from Guangzhou. Duty rate: 15%. Values in Rand (2026 estimates). Ocean freight Guangzhou → Durban (20ft FCL): R24,000. Marine insurance: R600. Origin inland transport + export charges (EXW → FOB): R3,000. The true FOB value of the goods is R183,000 in every case.
| Step | EXW R180,000 | FOB R183,000 | CIF R207,600 |
|---|---|---|---|
| Invoice value | R180,000 | R183,000 | R207,600 |
| Add: origin inland + export charges | +R3,000 | — (already in FOB) | — (already in CIF) |
| Deduct: ocean freight + insurance | — (not in EXW) | — (not in FOB) | −R24,600 |
| FOB customs value | R183,000 | R183,000 | R183,000 |
| Customs duty @ 15% | R27,450 | R27,450 | R27,450 |
| + 10% uplift (R18,300) → ATV base | R201,300 | R201,300 | R201,300 |
| Import VAT @ 15% on (ATV + duty) | R34,313 | R34,313 | R34,313 |
| Total duty + VAT payable to SARS | R61,763 | R61,763 | R61,763 |
Once each invoice is adjusted to the same FOB customs value (R183,000), the duty and VAT are identical — the Incoterm did not change the tax. What the Incoterm changes is the paperwork: under EXW you must add freight-to-port costs, while under CIF/DAP/DDP you must strip out freight (and post-border costs) and prove the deduction to SARS. The risk is real money: forget to add under EXW and you under-declare; forget to deduct under CIF and you overpay. Where you cannot cleanly separate a marked-up CIF freight, your declared FOB value can drift higher than it should — which is one practical reason many SA importers prefer to buy FOB and book their own freight.
Common customs-value mistakes — and how to avoid them
You receive an EXW invoice and your clearing agent lodges that value with SARS without adding the origin inland transport and export/loading charges needed to reach the FOB value. The customs value is understated. SARS can raise a penalty and detain the goods. Always give your agent the cost breakdown on EXW and FCA shipments.
A CIF or DAP invoice already includes ocean freight (and inland delivery). Because SA values on FOB, those must be deducted. Use the full CIF/DAP figure and you overstate the customs value and overpay duty and VAT. Request a freight-cost split from the seller at purchase-order stage.
Some DDP operators (especially informal Chinese fulfilment services) under-declare the customs value to reduce their duty liability. If SARS audits the transaction and links the true value to your company, you as the importer of record can be held liable, even though the seller handled clearance. Use only reputable, licensed customs agents under DDP arrangements.
Calculate your customs duty and VAT instantly
Enter your FOB customs value and HS-code duty rate to see the exact duty, 10% ATV uplift and 15% VAT you will owe SARS — before the shipment arrives.
Open the Duty & VAT Calculator →Frequently asked questions
Does SARS use FOB or CIF for the customs value?
South Africa uses an FOB basis: the goods plus the cost of loading them at the export port, excluding the international ocean freight and insurance. That is why, whatever Incoterm is on your invoice, the clearing agent adjusts to an FOB value before applying duty.
What is the 10% ATV uplift and why does SARS use it?
The Added Tax Value (ATV) is the FOB customs value plus a statutory 10% and the customs duty. The 10% is a proxy for the freight, insurance and handling that the FOB value leaves out. Import VAT (15%) is charged on the ATV — not on the bare customs value — which is why the total tax can feel disproportionate to the goods price.
Does the Incoterm change how much duty and VAT I pay?
Not in itself. Once each Incoterm is adjusted to the same FOB customs value, the duty and VAT are identical. Differences only arise from genuine price differences between terms, or where a marked-up CIF freight cannot be cleanly separated and stripped out.
Can I challenge a SARS customs value determination?
Yes. If SARS rejects your declared transaction value and substitutes a benchmark, you can lodge an objection under the Customs and Excise Act. You will need evidence of the true transaction value — the commercial invoice, proof of payment, and the freight/insurance breakdown. Engage a licensed customs consultant early if SARS raises a valuation query.
Does the Incoterm affect anti-dumping or safeguard duty calculations?
Anti-dumping and safeguard duties (administered by ITAC) are typically calculated on the same customs value base as ordinary customs duty. So they too rest on the FOB customs value — get that right and the trade-remedy duty follows. Check the ITAC tariff schedule for your HS code if your goods originate from a country subject to trade remedies.
Related guides
Sources: SARS Customs Valuation; ICC Incoterms 2020; ITAC. Last updated June 2026.