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:

8708.10.10.90

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.