Import duty and taxes are due when importing goods into Canada whether by a private individual or a commercial entity. The duty valuation method is FOB (Free on Board), which means that the import duty is calculated exclusively on the value of the imported goods. In addition to duty, imports may be subject to other taxes such as GST/PST/HST and excise.
Duty rates in Canada range between 0% and 35%, where the average duty rate is 8.56%. Some goods are not subject to duty (e.g. certain electronic products, antiques, etc.).
Preferential duty rates
Canada has signed free trade agreements with a number of countries. To be entitled to preferential tariff treatment, a good must meet the “originating” criteria as set out on the Rules of Origin of individual FTAs. A certificate of origin is required upon importation, when the value of an import is greater than CA$1600, for preferential duty rates to apply.
- If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA or CCOFTA is claimed for casual goods (i.e. goods other than commercial goods), the importer and owner of the goods are exempt from the Certificate of Origin requirements, provided that certain conditions are met.
- If the benefit of preferential tariff treatment under NAFTA, CCFTA, CCRFTA, CPFTA or CCOFTA is claimed for commercial goods whose estimated value for duty is less than $1,600, the importer and owner of the goods are exempt from the Certificate of Origin requirements, provided that certain conditions are met.
In Canada there are three types of sales tax: a federal Goods and Services Tax (GST) at a rate of 5%, a provincial sales tax (PST) which rate varies by province, and a combination of both, a Harmonized Sales Tax (HST) Commercial importers are only subject to GST. Private importers are subject to GST, PST or HST. Sales tax is calculated based on the sum of the value of the goods, the duty, and the excise duty (if applicable). The amount of sales tax due depends on the place of residence of the importer rather than on the location where the goods enter Canada. The table below outlines the sales tax rates in the different provinces:
|Combined effective rate|
|British Columbia||BC||GST + PST||7%||12%|
|Manitoba||MB||GST + PST||8%||13%|
|Newfoundland and Labrador||NL||HST||10%||15%|
|Prince Edward Island||PE||GST + PST||10%||15%|
|Quebec||QC||GST + QST||9.975%||14.975%|
|Saskatchewan||SK||GST + PST||6%||11%|
Duty and GST/PST/HST are not charged if the FOB value, i.e. the value of the goods excluding shipping and insurance cost, does not exceed CA$20.00.
Other taxes and custom fees
Excise fee is applicable on alcohol and tobacco products. It is based on FOB but also on quantity measurements and alcohol content in case of alcohol products.
Duty and tax refunds
In case of overpayment of duty and taxes or returns of imported products to the seller, the importer might be entitled to a duty and tax refund.
Local Customs office and contacts
More information on import declaration procedures and import restrictions can be found at Canada Border Agency Services.
Original resource: dutycalculator.com