There have been changes in the rules for defining the value to be used for duty and tax purposes at the time of import. In considering whether an individual or business entity is the "purchaser in Canada," the following question and answers might prove to be helpful:
Is the person an individual or incorporated/unincorporated business entity which is not resident (i.e. does not carry on business in Canada or the management and control of which are not in Canada) and does not have a permanent establishment in Canada (through which it carries on business in Canada)?
If yes, one of the following sets of circumstances will likely apply:
(a) If, prior to assuming ownership, the non-resident importer had not agreed to sell the goods to a resident in Canada, the non-resident importer would be considered the "Purchaser in Canada," under the provisions of subparagraph 2.1(c)(ii) of the regulations (refer to paragraphs 18 to 22).
(b) If, prior to assuming ownership, the non-resident importer had agreed to sell the goods to a resident in Canada, the non-resident importer will not be considered the "Purchaser in Canada," but rather the vendor of the imported goods. The "Purchaser in Canada" would be the business entity which purchased the goods from the non-resident importer.
(c) Where the non-resident importer produced the goods or acquired them on consignment, and the goods are not subject to a prior sale or agreement to sell to a "Purchaser in Canada," the transaction value method will not apply and an alternate method of valuation will be used to determine the value for duty of the imported goods.
If you require further information, please contact our Consulting or Client Service Department.