How to Calculate China Import Costs (CIF + Duty + VAT)

Most sellers importing from China think the cost is a single number: the unit price the supplier quotes. But that price is often only half of the real cost of getting the product into your warehouse in Türkiye. Freight, insurance, customs duty, import VAT, and a pile of fixed items fill the gap. In this article we move cost out of guesswork and build it with a formula: find the CIF, layer duty and VAT on top, add the fixed items, divide by quantity. At the end you have a single number — the real unit cost — and you set both your sale price and your margin on top of it.

Short rule (the master formula): Taxed base = (Goods value + International logistics) × (1 + Duty rate) × (1 + VAT rate). Add fixed items such as the broker fee and inland transport, divide by total quantity; the result is the real unit cost. Pricing off the supplier quote alone understates cost dramatically.

What makes up the cost of importing from China?

Import cost is not one line but a stack that builds on itself. A typical order produces the following items; you cannot see the real cost without putting them all in the same calculation:

• Goods value (FOB): the supplier’s factory/port delivery price — the starting point of the calculation.
• International freight: transport from China to Türkiye; varies hugely by air, sea, or road/rail.
• Insurance: usually a small percentage of cargo value; the third leg that completes CIF.
• Customs duty: a rate that varies by HS/GTIP code and country of origin.
• Import VAT: the VAT paid at customs; its base is not the goods but CIF + customs duty.
• Customs broker fee: a fixed/service charge for the declaration and process handling.
• Domestic items in Türkiye: release/terminal/warehouse charges and inland transport to your depot.
• Product-specific extra taxes: anti-dumping, special consumption tax, banderole, etc. (see below).

Do not treat these as hidden costs; they are all predictable and can be planned. We covered the full landed-cost logic — including how to allocate these import items into unit cost — in how to calculate product cost (COGS), and the practical customs/logistics side of importing in importing products from China.

What is CIF, and why is it the start of the calculation?

Customs calculates tax not from the price you paid for the product but from the CIF value. CIF is the sum of three things: Cost (goods value) + Insurance + Freight. So the FOB price you pay the supplier is not the tax base on its own; the base is the larger figure you get after adding transport and insurance.

This is why a cheap product plus expensive shipping is misleading: put 1 dollar of freight on a 2-dollar product and duty is calculated from 3 dollars, not 2. Every customs estimate made without building CIF correctly comes out short. The short formula:

• CIF = FOB goods value + Freight + Insurance
• The base for customs duty and VAT is this CIF (in its TL equivalent).

Freight and desi: how do you find the logistics item?

Freight is the most volatile item in import cost, and it is usually priced by volume rather than weight. Carriers compare actual weight with volumetric (desi) weight and charge on whichever is larger. A light but bulky product (a pillow, a plastic storage box) looks cheap by the kilo but expensive by desi.

The desi calculation is roughly as follows; the divisor changes by carrier and transport type, so verify with your forwarder:

• Desi = (Width × Length × Height, cm) / divisor (common divisors: 3000 in domestic cargo, often 5000–6000 in international air transport).
• Chargeable weight = the larger of actual kg and desi weight.
• You find unit freight by dividing total freight by the number of parcels/orders.

The transport mode changes cost fundamentally: air is fast but expensive, sea is cheap but takes weeks and has minimum container/parcel limits. For small first tests air cargo makes sense; for regular, high volume sea/rail is better. Whichever you choose, you cannot build product cost correctly without allocating freight per unit — because the unit cost of the same product differs when you import 100 units versus 1000 units.

How is the duty and VAT layer applied?

The two taxes stack in order, and the order matters. First customs duty is added on top of CIF; then VAT is calculated on the sum of CIF + customs duty. Applying VAT directly to the product price is a common mistake that understates cost.

• Customs duty = CIF × duty rate
• Import VAT = (CIF + customs duty) × VAT rate
• Taxed base = CIF + customs duty + import VAT = CIF × (1 + duty rate) × (1 + VAT rate)

The duty rate is not fixed: depending on the HS/GTIP (customs tariff) code, the type of product, and the country of origin, it ranges roughly from 0% to 48%; double-digit rates are common on many consumer goods. On certain groups of Chinese-origin products (textiles, footwear, some metal/plastic goods) an anti-dumping duty may also apply, and this item can be even larger than the duty rate. The VAT rate can be 1%, 10%, or 20% depending on the product.

These rates are for reference; your product’s exact duty rate, VAT rate, and extra taxes depend on its GTIP code. For the exact rate, consult your customs broker, your accountant, and an official source (the Ministry of Trade tariff schedule / the Revenue Administration) — a wrong GTIP leads to under/over payment and surprise penalties. The figures here are to show the logic of the calculation, not a declaration.

Step-by-step worked example

Suppose you import 500 units of a small home product. The figures are examples; use your own amounts and the current exchange rate in your own order.

• Goods value (FOB): 500 × 2 USD = 1,000 USD
• Freight + insurance: 300 USD → CIF = 1,000 + 300 = 1,300 USD
• Example rate 40 TL/USD → CIF = 52,000 TL
• Customs duty 10% (example): 52,000 × 10% = 5,200 TL → subtotal 57,200 TL
• Import VAT 20%: 57,200 × 20% = 11,440 TL
• Broker + inland transport + other fixed items (example): 3,000 TL

You can reach the same result with the master formula: 52,000 × 1.10 × 1.20 = 68,640 TL (taxed base), plus 3,000 TL of fixed items = 71,640 TL total. Divided by quantity:

• Unit cost (VAT included): 71,640 / 500 ≈ 143 TL
• Unit cost (VAT excluded): 60,200 / 500 ≈ 120 TL — separate the VAT (reason below)

Here is the crux: the supplier price was only 2 USD per unit (~80 TL); the real unit cost is 120–143 TL. If you had calculated profit off 80 TL, you would have been off by about 50% on every sale. Instead of doing this 15-item calculation by hand on every order, enter the goods, freight, duty, and VAT items into the product cost calculator and let the unit cost come out automatically.

Other items that get overlooked

Beyond the formula, some items may appear depending on the product and process. They do not occur on every product, but even one of them raises the unit cost noticeably:

• Anti-dumping duty: an extra burden on certain Chinese-origin groups; the rate can be high.
• Special consumption tax (ÖTV): on some product groups such as electronics and cosmetics.
• Banderole / conformity documents: TRT banderole, TSE/CE conformity — mandatory costs on relevant products.
• Bank/transfer fees and FX difference: currency transfer commissions and rate movement between payment and delivery.
• Waste and returns: damaged/short items; dividing by the sound quantity raises the unit cost.

Your customs broker will clarify which of these apply to your product. Rather than assuming an uncertain item is zero, put it in with a cautious estimate; in imports a surprise cost can wipe out the profit on a thin-margin product entirely.

Import VAT: cost or cash?

Above we gave the unit cost two ways; the reason is that VAT does not behave the same for everyone. If you are a VAT-registered company, the import VAT you pay at customs is deductible VAT — it is not part of product cost (COGS); it is offset against your output VAT on your return. In that case your real unit cost is the VAT-excluded figure (~120 TL in the example), but the VAT still leaves your pocket as cash today and ties up money until the refund/offset date.

In personal/micro imports, or if you are not VAT-registered, the import VAT is not deductible; then VAT genuinely becomes cost and your unit cost is the VAT-included figure (~143 TL in the example). We covered why input VAT normally does not belong in COGS in the product cost (COGS) article.

Because the tax side changes with personal circumstances, this is general information; for your own company type, tax registration, and deduction/refund situation, be sure to consult your accountant. A wrong assumption breaks both your cost and your filing.

From unit cost to sale price and margin

You now have a single real number: unit cost. The correct order of pricing is to put the marketplace deductions on top of this cost to reach your target margin — not the reverse. When setting the sale price, add the following on top of cost in order:

1. Marketplace commission (and, on most marketplaces, the VAT stacked on top of commission).
2. Shipping/logistics and any service fees — on a cheap product these can be larger than commission.
3. Withholding, return rate, and advertising — items that take a share of every sale.
4. Your target net profit margin — what you want left over.

For the 120 TL unit-cost product in the example, you need to reverse-calculate the price that leaves your target margin after commission and shipping are deducted. To see these two steps — landed unit cost, then marketplace deductions — in one chain, first derive unit cost with the product cost calculator, then feed that cost into the marketplace profit calculators; you will see clearly which margin you earn at which price.

Three frequently asked questions

Can’t I just apply VAT directly to the product price?

No. The base for import VAT is not the product price but CIF + customs duty. If you apply VAT directly to the product price, you drop both freight and customs duty out of the base and find the cost lower than it is. The order is always: CIF first, then duty, then VAT last.

Where do I learn my exact duty rate?

From the product’s GTIP code. Determining the correct GTIP takes expertise; a wrong code means a wrong rate, penalties, and delays. For the exact rate, extra taxes, and documents, consult a customs broker and verify the official tariff schedule. The 5–48% range in this article is for orientation, not your product’s rate.

Why is the per-unit cost higher on a small batch?

Because expenses such as freight, the broker fee, and fixed customs items are independent of quantity; dividing their total across a small number of units inflates the unit cost. When the same product arrives as 1000 units instead of 100, these fixed items spread out and the unit cost drops. So do not confuse the unit cost of a first trial order with the cost of a serial order.

Do not estimate cost — calculate it

The cost of importing from China is not a single number but a layer that builds on itself: build the CIF, apply duty and VAT in order, add the fixed items, divide by quantity. Instead of running this chain by hand every time, use the product cost calculator; after you derive the unit cost, Verimle, once it tracks your sales, reads each order’s marketplace deductions from the actual payout breakdown, puts them on top of that unit cost, and shows net profit per product. That way you decide based on the real 120 TL cost, not the 80 TL supplier price. On the tax and rate side, verify the exact information with your panel, your accountant, and official sources (the Revenue Administration / Ministry of Trade) — this article is general information.

Currency and verification note: The customs duties, import VAT, special consumption tax (ÖTV), CIF thresholds, and variables such as freight/exchange rate in this article change over time with legislation and the market; the calculation here is an example and does not replace the current official tariffs/legislation. For exact and current rates, check an official source — the Republic of Türkiye Ministry of Trade —; for the current customs/tax status and process of your own order, verify with your customs broker and your accountant. To calculate the unit cost with your own figures, use the product cost calculator. This guide was last reviewed on 18 July 2026.