Custom Broker License Practice Exam 2025 – The Complete All-in-One Guide to Exam Success!

In transaction valuation, customs duties are assessed based on the price actually paid or payable for the goods, which is referred to as the transaction value. However, certain costs are typically excluded from this valuation to avoid inflating the basis for duty calculations. Customs inspection costs are typically excluded from this deduction because they are not part of the direct cost of purchasing or making the goods available for sale; they are associated with compliance and regulatory checks rather than the intrinsic value of the merchandise itself.

Other options, such as island freight for international shipping, discounts applied at the point of sale, and insurance fees related to risk, can affect the transaction value calculation as they are integral to the cost associated with acquiring the goods. For instance, freight costs are included in the transaction value because they are part of getting the goods to the buyer. Discounts applied can reduce the transaction value, and insurance fees may also be included to reflect the total cost incurred by the buyer. Thus, customs inspection costs stand out as the correct exclusion in the context of transaction valuation.