Guide for Imports to Canada
Importing to Canada can be a simple process as long as you recognize the importance of your responsibilities as an importer. The named importer of record is solely responsible for the accuracy of the documentation provided and the subsequent declaration made on your behalf.
The importer of record may be a resident or non-resident of Canada but is usually the “person” who causes the goods to be imported to Canada.
This is a simplified step by step process to assist you to understand importation rules and regulations and the process involved to ensure a smooth and trouble free import.
Business Number (BN) for an import or import/export account must be obtained from Canada Revenue Agency (CRA) which can be applied for on line or by phone and is usually issued the same day.
The Business Number is used for major government revenue programs such as GST (Goods and Services Tax), payroll deductions and corporate income tax.
Other Government Departments (OGD) Some goods are subject to the requirements of OGD and may need certain permits and/or certificates, for example:
All used equipment that may be contaminated with soil MUST be cleaned and have a steam clean certificate issued prior to transport for acceptance by the Canadian Food inspection Agency (CFIA)
Goods for retail sale must comply with labeling/marking laws.
The country of export and country of origin/manufacture must be determined and declared.
The country of export and the origin of your goods will determine the trade agreement and the tariff treatment they will receive as duties can range from free to 35%.
Certain trade agreements are in place, most notably NAFTA, but just because your goods are shipped from a NAFTA country does not mean they qualify under NAFTA
Determining the tariff classification of your goods.
Not all goods are created equal and determining the tariff classification which sets the rate of duty is crucial. Some goods are simple to classify and some not so simple. Determining the tariff classification in advance will avoid surprises in the future.
Valuation and determining the type of transaction, sale of goods or reason for import.
Most goods are sold and imported as a simple transaction between unrelated parties and the transaction method is the simplest way of determining the value of the goods for customs purposes.
Complications arise when;
Goods are sold between related parties.
Goods are not sold to a Canadian company but shipped to Canada on consignment, for a potential sale, for loan or lease or for any other reason than a regular transaction.
Royalties, assists, commissions or other factors determine the sale or potential sale.
Certain conditions and/or allowances apply if you are a non-resident importer of record.
Documentation and certificates.
You can use three invoicing options.
Canada Customs Invoice (CCI), which either you or the vendor can complete.
A commercial invoice containing the same information as a CCI.
A commercial invoice which indicates the buyer, seller, country of origin, price paid or payable, and a detailed description of the goods, including quantity, and a CCI that provides the remaining information.
There are several certificates of origin which are required to claim a preferential tariff treatment (see 3 above) to coincide with your country of export and origin of goods.
NAFTA – North American Free Trade Agreement (Canada, US and Mexico).
CIFTA – Canada –Israel Free Trade Agreement.
CCFTA – Canada-Chile Free Trade agreement.
Form “A” or Exporter’s statement of origin for goods which may qualify under the General Preferential Tariff (GPT) or the Least Developed Country Tariff (LDCT). The criteria for GPT status has been drastically restricted and reduced since 2015.
Maintenance of books and records.
As an importer, you have to keep books and records to substantiate what goods you imported, the quantities, the prices you paid along with proof of payment, and the origin of goods along with all certificates declared. You are responsible for all records on reporting, releasing, accounting for, as well as any later adjustments.
You have to keep records in Canada, in either paper or electronic format, for six years after the year you import the goods. If you want to keep your records outside Canada, you must get written approval from the Canada Revenue Agency (CRA).
These regulations apply regardless if you are a resident or non-resident of Canada as the declared importer of record.
Goods and Services Tax (GST)
April 01, 2013 British Columbia has reverted to the GST collection of the 5% GST payable on imports, this will affect the tax status of collection for non-residents carrying on as doing business in Canada.
These rules are complicated and are best outlined on a case by case basis, especially when claiming the GST Input Tax Credit (ITC).
The importer of record is solely responsible to ensure the GST and or PST is collected and remitted.
As in all cases, certain conditions may apply that will alter some of these steps as provided and is best to consult prior to engaging in a restrictive sales agreement or contract.