Starting today, we will embark on a series of posts about the brand new and recently integrated eCommerce compliance solutions by MyDutyCollect. The first new territory is Canada, where we will look over its import rules and regulations, prohibitions and restrictions, as well as the main requirements for businesses and individuals who intend to have goods shipped into the country.
–
READ MORE: Get to Know Our Solution For Switzerland
–
The import process can be broken down into six main steps:
1- Businesses and/or individuals will need a Business Number (BN) issued by the Canada Revenue Agency (CRA) for an import/export account. It’s a crucial part of the import process to ensure that goods are permitted into Canada or perhaps subject to any restrictions or prohibitions.
2- Determine the correct 10-digit tariff classification code for each good you wish to import. The first six digits are a common identifier across all countries using the Harmonization Code system (HS) for that particular good. The following four are unique to Canada and used to establish the duty rates and for statistical purposes.
3- Determine the value of the goods being imported, the applicable tariff treatment, rate of duty and if the goods are subject to the Goods and Services Tax (GST), excise tax or excise duty. As any other member of the WCO, Canada also has Free Trade Agreements (FTAs) and they need to be checked for preferential tariff treatment purposes.
It’s important to determine if your goods are subject to the Goods and Services Tax (GST), excise tax or excise duty. The GST (5%) is payable on most goods at the time of importation under Part IX, Division III of the Excise Tax Act.
Examples of goods subject to excise tax:
- Automobile air conditioners, whether separate or permanently installed ($100 per air conditioner);
- Certain vehicles designed for use as passenger vehicles; and
- Certain fuels.
Examples of goods subject to excise duty include:
- Tobacco and certain alcohol products.
4- Select a mode of shipping and report your goods to the Canada Border Services Agency (CBSA). Reporting methods vary depending on the mode used and the value of the goods. If you are transporting the goods yourself please refer to Memorandum D17-1-4, Release of Commercial Goods, for information on the Hand Carried Goods Release Process. A carrier uses a bar-coded Cargo Control Document (CCD) or the Electronic Data Interchange (EDI) system to report to the CBSA.
5- It’s also important to choose the correct incoterm. You can self-clear the goods and pay the applicable duties and taxes before the goods are released (DDP), or use the services of a customs broker and pay duties and taxes after the goods are released (DDU).
6- After your goods are released, if there is any error in the accounting information you submitted, you may be required to adjust it. Keep all records for six years and be aware that your documents may be verified and adjusted by the CBSA.
MyDutyCollect has developed a streamlined and cohesive suite of features that will make the import process to Canada simple and fast by providing an end-to-end solution that simplifies customs compliance processes from the moment of purchase until goods are cleared. Our APIs cover:
- HTS Classification: high levels of product classification accuracy by using natural language
- Landed Cost Calculator: includes precise calculation of import Duties, Excise Duties (if applicable), taxes and fees such as GST, shipping cost, etc.
- Prohibited and Restricted goods screening: screen and return updated lists of P&R goods.
Easily integrable, our suite of APIs can boost your business by bringing vast international opportunities. If you are interested in our solutions, subscribe to our blog and visit our website and LinkedIn for more information. You can also reach us by sending a message to info@mydutycollect.com. We will be delighted to hear from you.
