Clearit.ca's Blog on Customs Brokerage and News Updates
Each and every commercial item crossing the border into Canada must be declared, accounted for, and if applicable, have duty and taxes paid in full.
In order to identify a product or commodity and establish its duty rate, the Canada Border Services Agency uses the HS (Harmonized System) code identifier administered by the Brussels-based World Customs Organization. This HS code system is comprised of over 5,000 commodity groups in 100 chapters. It is a 10 digit code (the first 6 being international) and is arranged in a legal and logical structure and supported by well-defined rules to achieve uniform classification.
For example, the classification for a car bumper would be as follows:
Chapter 87: Vehicles other than railway or tramway rolling stock, parts, accessories
Sub-Chapter 08: Parts & accessories of motor vehicles of headings 87.01-87.05
Sub-Heading 10: Bumpers & Parts thereof
Sub-Heading 10: Bumpers
Sub-Heading 90: Other
Your tax rate is based on your status as a personal or commercial importer. Personal importers are subject to Provincial & Federal sales tax meaning when purchasing something online from outside Canada, you are subject to the same tax rates as if you had purchased the items in a store locally.
As a Commercial importer, you are only subject to GST (5%) which can then be claimed back through input tax credits. In order to import commercially, you must have a valid and registered import account with the Canada Revenue Agency – Certain products, like some food products, may be GST exempt.