While the Unites States and Canada enjoy a close trade relationship, shipments between the two countries are considered commercial transactions and are therefore subject to import duties.
That means if you are importing goods into Canada, you are required to pay federal and regional sales taxes on your goods. The Canada customs duty rates are regulated by the Canada Customs Act and enforced by the Canada Border Services Agency. (CBSA)
A few duty rates examples for major imports:
Computers and related equipment 0% and duty-free
Textile articles (bedding, linen, towels, curtains) 16-18%
Auto parts 0-8%
Duties and Fees
Figuring out the correct category and applicable taxes and fees for your goods can become a complex undertaking, so it might be a good idea to involve an experienced customs broker to advise you. There are several different regulations that might apply.
If your goods are marked as made in the United States, Canada or Mexico, and are accompanied by a North American Free Trade Agreement (NAFTA) certificate, no duty is payable. Most imported goods however are subject to the Federal Goods and Services Tax (GST) and Provincial Sales Tax (PST) or, in certain provinces and territories, the Harmonized Sales Tax (HST).
Goods and Services Tax
One tax you cannot avoid when importing into Canada is the Goods and Services tax, also called GST. It’s a five percent federal tax that is imposed on practically everything that is sold in Canada. A limited number of these goods and services are exempt from the GST and “zero-rated”, for example milk, bread and vegetables, prescription drugs or medical devices such as artificial teeth or hearing aids.
While most Canadian provinces impose their own taxes, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, and Ontario “harmonize” their provincial sales tax with Canada’s general sales tax. The “harmonized tax” combines the 5 percent federal GST plus the appropriate provincial tax. Provincial sales taxes are established by the specific province and can range from five percent (for example in Saskatchewan) to 9.975 percent (example Quebec).
When you return to Canada, you may also qualify for a personal exemption from the Canada customs duty rates. This allows you to bring goods of a certain value into the country without paying taxes and duties. Depending on the length of your absence from Canada, CBSA has determined what amount of goods you can import without paying any duties. (A minimum duty may apply to some tobacco products).
- Less than 24hours: There are no personal exemptions for same-day cross border shoppers.
- 24 hours or more: Up to CAD$200 (except alcohol and tobacco)
- 48 hours or more: UP TO CAD$800 (may include alcohol and tobacco products, within the prescribed limits set by provincial or territorial authorities).
- 7 days or more: UP TO CAD$800 (may include alcohol and tobacco products, within the prescribed limits set by provincial or territorial authorities)
For further details check the CBSA guide, or check with certified Canadian customs brokers.
As you can see, there are numerous factors to consider that will influence and affect your Canada customs duty rates. Are your goods being imported for personal or commercial use? What is their final destination in Canada and what regulations and laws governs this province? When you are importing goods and try to estimate the costs for fees and duties, don’t overlook the hidden costs, for example the exchange rate, preparation of documents, clearance and handling fees.
The list goes on and on, and without the necessary expertise and insight, your shipping project can quickly turn into a costly affair. Clearit has the expertise and the customs knowledge to provide you with the support and know-how you are looking for. Best of all, besides advising you about applicable Canada customs duty rates, we also provide great customer service.
After all, we are in business because of you!