Costs and charges
CIF value
The cost of the goods plus insurance and freight to the port of entry, used as the customs value in the GCC.
In four languages
CIF value is the figure GCC customs use to calculate duty: the price of the goods plus the cost of insurance and freight up to the point of entry. If the invoice is on FOB or EXW terms, the freight and insurance are added to reach the CIF value, so they should be documented. Import VAT is then calculated on the CIF value plus duty. CIF value is a customs calculation and applies whatever Incoterm the buyer and seller agreed; it is not the same as buying on CIF terms. Example: goods invoiced at FOB USD 20,000, with USD 2,000 of freight and insurance, have a CIF value of USD 22,000. Duty at 5% is USD 1,100, and VAT is calculated on USD 23,100. Showing freight and insurance clearly on documents helps the broker declare the right value.
Questions
Is CIF value the same as the CIF Incoterm?
No. The CIF Incoterm decides who pays and who carries the risk, while CIF value is the customs base used for duty whatever Incoterm you used.
My invoice is FOB. How does customs get the CIF value?
Freight and insurance to the port of entry are added to the FOB price, using the freight invoice and insurance details provided with the declaration.