Preferential Rates of Duty are reduced tariff rates levied on the basis of trade agreements between two or more countries. These rates are usually substantially lower than the normal tariff rates and in many cases the customs duties are waived entirely.

Preferential treatment is granted by either one-way concessions, where only one party enjoys tariff reductions, or mutual concessions for the countries involved. One-way concessions are in most cases granted to developing countries.