CIF (Cost, Insurance, Freight)
Customs valuation method including goods, shipping, and insurance.
Definition
CIF (Cost, Insurance, and Freight) is an Incoterm and a customs valuation method. As an Incoterm, CIF means the seller pays for goods, insurance, and freight to the destination port. As a valuation method, CIF customs value includes the goods price plus shipping and insurance costs. Most countries (UK, EU, Australia) use CIF for customs valuation—meaning duty is calculated on the total of goods + freight + insurance. The US is a notable exception, using FOB (goods only).
Why It Matters
Understanding whether your destination uses CIF or FOB valuation affects your landed cost calculation. CIF countries charge duty on a higher base (including shipping), resulting in more duty. For a $1,000 shipment with $200 shipping and 10% duty: CIF-based duty = $120, FOB-based duty = $100.
Example
UK import: Product $2,000, shipping $300, insurance $50. CIF value = $2,350. At 5% duty, you pay $117.50. If the UK used FOB like the US, duty would only be $100.
Landed Cost Calculator
Estimate total import costs including duty, tax, and shipping fees.
Related Terms
Frequently Asked Questions
Which countries use CIF for customs valuation?
Most countries use CIF, including the UK, EU, Australia, Japan, and most of Asia. The US is the major exception, using FOB (transaction value without freight/insurance).
Is CIF the same as the Incoterm?
CIF can refer to both the Incoterm (seller delivers to port with insurance) and the customs valuation method (goods + freight + insurance). Context matters—for landed cost, we usually mean the valuation method.
Related Resources
What is Landed Cost?
Complete guide to import duty and tax
ToolLanded Cost Calculator
Estimate import duty, tax, and total cost
DefinitionFOB (Free On Board)
Customs valuation method based on goods value only, excluding freight.
DefinitionCustoms Value
The value used by customs to calculate import duties.
DefinitionImport Duty
Tax charged by customs on imported goods.