Glossary term
Ad Valorem
A duty calculated as a percentage of the goods’ customs value, rather than by weight, volume or unit.
Latin for "according to value". An ad valorem duty is expressed as a percentage and applied to the customs value of the goods, so the amount payable moves with the price.
It contrasts with a specific duty, charged per unit, litre or kilogram regardless of value, and with a compound duty that combines both. The distinction matters when comparing tariffs: a specific duty bites hardest on cheap goods, an ad valorem duty on expensive ones.
Because an ad valorem rate depends entirely on the declared value, valuation rules and duty rates are enforced together. A rate is meaningless without the valuation basis it applies to.