Canadian Border Services Agency has a policy of keeping a profile on all importers. Importers with a good profile – that is, who consistently provide accurate documentation – will be rewarded with less border scrutiny and are able to take advantage of special release options. On the other hand, those with a poor profile will face fines and penalties and will not be able to benefit from participation in some CBSA programs.
How does the Canadian Customs system work?
There are two stages to customs: release and accounting. You or your customs broker takes care of the release, while accounting is based on the documentation supplied by you as importer, the exporter, and the carrier.
- Release: Before the goods arrive, the customs broker prepares the release by gathering all necessary information and documentation from you, the shipper, and the carrier. They then review the paperwork and contact you or the shipper if anything is missing. The customs broker will also obtain any required import permits or certificates required by other government departments. When this is complete, the broker then submits a release electronically to the CBSA. When your shipment arrives in Canada, CBSA will release the goods providing everything is in order.
- Accounting: Within 5 days of the release of the shipment, the customs broker submits the second stage of the import - accounting. To do this, a customs entry must prepared and submitted to the CBSA with more detailed information about the shipment. The customs entry includes a Form B3 - Canada Custom Coding Form. This form contains information about the goods, such as the your identification, description of the goods, tariff classification, value, country of origin and other trade data, as well as how much duty and tax is owed to the CBSA. In essence, the customs entry is a “tax return” to the CBSA for the shipment.
What do I need to do?
If you are importing to Canada for the first time, we strongly recommend using a customs broker to ensure that everything is accurate and that you build a good profile with customs. Customs can be very complicated for first timers, and someone with in-depth knowledge of the systems is required.
You are responsible for keeping all records related to the import for six years following date of entry.
What documents do I need to provide with my import?
The documentation to be included with an import varies depending on the value of the goods. If the value of your import is valued at $1,600 (CDN) or greater, you need to include:
- A Bill of Lading
- Carrier’s Manifest (Cargo Control Document)
- Canada Customs Invoice or Commercial Invoice
- Import permits, certificates or licenses (as required)
- Any other documents that may be needed to present to Customs to satisfy the CBSA requirements or the requirements of other government departments.
- Certificate of Origin (if applicable)
For Imports valued under $1,600 (CDN) you need all of the above apart from a Canada Customs Invoice.
What is a Customs Invoice?
A customs invoice contains information on:
- Your name and business number
- Exporter name
- Unit of measure and quantity of goods
- Value of the goods and currency
- Detailed description of the goods
- Goods’ country of origin
- Number of invoice pages
- Bar-coded transaction number
- Permits, licenses and certificates required by other government departments
When is a Certificate of Origin required and what is its purpose?
A Certificate of Origin is a documented submitted by the exporter listing the goods to be imported and place of origin. Where countries have agreements (such as NAFTA) for favorable duty treatments for goods originating in specific counties, submission of a certificate of origin can assist in lowering or even completely eliminating duty on goods, thereby helping to increase your competitiveness in the Canadian market.
There are five main types of certificates of origin:
- NAFTA (North American Free Trade Agreement)
- CIFTA (Canada-Israel Free Trade Agreement)
- CCFTA (Canada-Chile Free Trade Agreement)
- CCRFTA (Canada-Costa Rica Free Trade Agreement)
- Form “A” Certificate of Origin from certain developing countries
To find out whether a Certificate of Origin is required, contact a customs agent.
How much will I have to pay in tariffs and duties?
All merchandise imported for commercial use are subject to customs duty and goods and services tax (GST), unless they are exempt or free of duties. No matter where you purchased the goods and in what currency, the value of the goods must be converted in to Canadian dollars to determine the duties payable. Some goods will also have other charges or taxes apply, including excise duty and excise tax on luxury items like jewelry or alcohol.
The CBSA can assist you in determining the duties you will have to pay on goods before they arrive. Valuing goods can be a complicated task as a number of adjustments to the actual sale price are required, expert assistance is usually required.
In order to establish what duties will have to be paid, you must have a thorough description of the goods and know their value and origin. The CBSA can also give you advice about the appropriate valuation method, tariff classification, and tariff treatment. If you wish to know in advance exactly what you will have to pay, you can request an Advance Ruling or a National Customs Ruling on tariff classification, origin, marking or valuation.
Then contact the CBSA through the BIS line (see below) and speak to an agent in person. The agent will refer you to a staff member who specializes in these matters.
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