Legal Definitions - compound duty

Compound duty is a type of tax that is based on a combination of factors such as weight, volume, or item count, as well as a percentage of the product's value. For example, if a product is imported and subject to a compound duty of 5% of its value plus $1 per pound, the total duty owed would be calculated by adding 5% of the product's value to $1 multiplied by the product's weight in pounds.

Compound duty is different from ad valorem duty, which is calculated as a percentage of the product's value only, and specific duty, which is calculated based on the product's weight, volume, or item count only.

An example of compound duty in practice is the duty imposed on imported textiles in the United States. The duty is calculated based on the weight of the textile and a percentage of its value.