Importing Goods into Canada
Importing products into Canada is almost a requirement to compete in today’s global economy. While free trade agreements have simplified the procedure significantly in recent years, they have not eliminated the requirement to adhere to specific regulations. After reading this blog post, you’ll be able to more comfortably import goods into Canada and avoid potential hurdles.
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Import regulation is within the purview of a government department called the Canada Border Services Agency (CBSA). One of the first things you should do prior to importing, is register your company with the Canada Revenue Agency (CRA) and obtain an importer number, also known as a business number. You may do it either directly with the CRA or use your Customs Broker. The importer number is how the CBSA and CRA identify your company.
Once you know what goods you’re importing into Canada, you may choose between doing the paperwork yourself or hiring a customs broker. A customs broker’s services might come at a cost, but it streamlines the process and helps mitigate risks.
Doing it Yourself
If you want to avoid paying a customs broker and deal directly with the CBSA, you’ll need to research the import regulations for your products. Identify the place where the products were manufactured as a first step. The next step is to check with the CBSA and any other relevant government agencies to see whether your intended imports need any special permission, or permits prior to import. After that, you’ll need to find the 10-digit tariff code. Canada, the US, China, and India are just a few nations whose classification systems are based on the Harmonized System. The Canadian Customs Tariff may be used to ascertain the duty rate after the national origin and the classification number have been obtained. This is also the stage at which you figure out whether or not a multilateral or bilateral trade agreement applies to your situation.
There is a 5% Goods and Services Tax on the majority of commercially imported items.
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Shipment and Release
While most shipments are processed at the Canada Border Services Agency office where they first enter Canada, if you use an bonded carrier, you may choose the agency location that is most convenient for your business.
After your shipment has arrived in Canada, you may fill out the B3 Canada Customs Coding Form by visiting the CBSA office in charge of the warehouse where your items are being held. There, you may file your papers and pay any duties prior to picking up your package. In addition, it is essential that all documentation is kept for at least six years after the completion of a transaction because the CBSA may conduct an audit during this period.
The Importation Procedure
The CBSA must be notified of all shipments of products entering Canada, and all relevant duties and taxes must be paid. Tariff classification, country of origin, and declared value will all play a role in determining the amount of customs tax that must be paid. It is essential to follow the correct procedure to prevent penalties from being imposed.
Brokers Who Deal With Customs Formalities
A customs broker represents the interests of an importer when conducting business with the CBSA. Only customs brokers with a CBSA issued license can account for products and pay duties and taxes on different importers’ behalf.
Merchandise Importation Tariffs
The Harmonized Commodity Description and Coding System is the foundation upon which Canada’s customs tariff is built. Import tariffs, import tally data, quotas, anti-dumping and countervailing levies, are all based on the items’ categorization under the Customs Tariff.
Valuation of Imported Goods
To pay the correct amount in customs duty and tax, importers must first identify the fair market worth of the imported item. For Canadian customs, the transaction value approach is the default for determining a product’s worth.
Unless a connection between the seller and buyer has impacted the price, the transaction value is the amount paid or due for the products sold for export to a purchaser in Canada. When the transaction value method cannot be utilized, the Customs Act specifies other valuation techniques that must be performed in a prescribed sequence.
Customs and Tariffs
Imports into Canada from most countries are given Most-Favoured-Nation tariff protection. However, if the goods in question follow specific rules of origin, they may be eligible for reduced tariffs.
As long as they follow the CUSMA‘s rules of origin, the majority of goods imported into Canada from the US or Mexico do not incur import duties.
Canada has free trade agreements (FTAs) with several other countries. In addition, the General Discounted Tariff and the Least Developed Country Tariff provide preferential tax rates on imports from select “developing” countries if local content conditions are met.
This is a lot of information and may seem intimidating. There are many regulations to abide by, which is why many importers use the services of a Customs Broker when importing goods into Canada. For more information, or for a free quote, please contact us.