Paying Duties & Tax
Duties, taxes, delays, exams, 3rd party supply chain handling charges etc, are all separate from the government charges related to importing.
Determine if your goods are subject to the goods and services tax (GST), excise tax or excise duty
Any commercial item shipped to Canada may be subject to the Goods and Services Tax (GST) and/or duty. Unless specifically exempted, you must pay the 5% GST on items you import into Canada.
Any personal item would be subject to the Total Tax Rate applicable in each province.
Some specialty items have excise
Duty rates vary according to the type of goods you are importing, and the country from which they came or were made in. The CBSA then calculates any percentage of duty owed, based on the value of the goods in Canadian funds. Anywhere from 0% - 300+%
Figuring out the correct HS Tariff Classification for your goods can become a complex undertaking, so it might be a good idea to consult with a Customs broker to advise you.
A few duty rates examples for major imports:
Textile articles (bedding, linen, towels, curtains) 16-18%
Computers and related equipment 0% and duty-free
Small Appliances 0-8%
Auto parts 0-8%
Plastic Articles 0-7%
Want to look it up yourself?
There are many online duty calculators available. Caution if all you need is a "description". Most products are not specifically described and easy to find by description in the tariff listing.
Beware of numerous principals to consider that will influence and affect the HS Tariff Classification.
The Canada Tariff Finder enables you to check import tariffs for specific goods and markets and can also be used to compare tariffs for up to three different countries or products.
Tariff is not always specifically described, may have numerous statistical breakouts that require you to obtain further product information, and without the necessary expertise and insight to how the tariff is written, your international shipment could end up being delayed and cost more than expected.
When do I have to pay Customs?
All imports to Canada require financial security to be posted with Customs in order to receive release prior to payment privileges. Unless you or your broker has posted financial security with CBSA on your behalf, all of your import duties & tax are payable to CBSA at the time of import, in cash or other acceptable form of payment.
Not only does your broker provide critical trade advice and the ability to transmit declarations to Customs electronically instead of meeting each shipment upon arrival, they also often extend the use of their financial security bond to their clients.
Currently Customs brokers are allowed to assume the duty and tax liability on behalf of their clients through the use of their own customs broker surety bond, and invoice you with favorable negotiated terms.
What is going to change?
The process for clearing goods into Canada is approaching a fundamental shift. There will be significant changes in who will be the required party to post financial security and make payments. Separating the declaration of the goods, and the payment of duties and tax. Currently all done in one process, by a customs broker.
By 2023 Customs is moving to a model that requires each importer to be responsible for the posting of their own security with the CBSA, in the form of either cash or a customs bond and paying their own account on a monthly basis. This is called “CARM”, the CBSA Assessment and Revenue Management project.
Many importers are realizing that they need to be proactive to ensure they get their financial security bonds in place well ahead of the deadline, when inevitably surety companies will be faced with a significant influx of requests which they may struggle to deal with.