Shipping to Canada Guide
> Section 3 - Revenue Canada, Customs, Excise & Taxation

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3.1 GOODS AND SERVICES TAX (GST)

3.1.1 GST REGISTRATION

All companies doing business in Canada, whose world wide sales is $30,000.00 and over are required to obtain a registration number from the Department of National Revenue. Registered US. firms may assess the GST on their actual commercial invoice to their Canadian customer. The recovery of the GST is then realised immediately upon settlement of the invoice by your customer in Canada.

3.1.2 EXEMPT OR ZERO RATED PRODUCTS

Some products are exempt, for instance, certain medical products, basic grocery items, and certain medicinal drugs.

3.1.3 METHOD OF APPLICATION AND RATE OF GST

The Goods and Services Tax, more commonly referred to as the GST is a federal tax, which applies to most products, imported and domestic. The rate is seven (7%) per cent and is based on the duty paid value (duty plus the cost of goods).

3.1.4 METHODS OF RECOVERY OF THE GST PAID UPON IMPORT

If a non-resident importer chooses not to register, another method of recovery of the GST is available via the “flow through” process. This method can be utilised by providing a copy of the proof of payment of the GST at time of import to the Canadian customer, who may account for the credit via their normal reporting method, i.e. monthly, quarterly or annually.

Contact L.M. Clark Ltd. for application forms and a gst booklet for non-resident importers.

L.M. Clark Ltd. as your Canadian customs broker, can also make arrangements to collect GST directly from your Canadian customer.

3.2 MAINTENANCE OF BOOKS AND RECORDS FOR IMPORTS INTO CANADA

All companies doing business in Canada must maintain copies of all documents related to their business for a period of five (5) years from the date of importation. Examples of some of the documents to be retained are: customs entries; commercial invoices; proof of settlement with your Canadian customers; bank deposits, bank statements with cancelled cheques, etc.

These records must be maintained in Canada. Non-resident importers may choose to engage a Customs Broker, Lawyer, Accountant or any other Canadian firm or person to perform this service and bear the cost associated with this method. Alternatively, you might wish to sign and complete an affidavit, which when approved by Revenue Canada, grants permission to non-resident firms to maintain records at their head office. A sample of the affidavit form is located in section 1, Documentation, item 1.9.

3.3 VALUE OF IMPORTED PRODUCTS

Products entering the commerce of Canada are subject to duty based on the value. There are six methods of determining the value, the most commonly used method being the transaction value. This is the value at which the goods is being sold to the Canadian purchaser and this is likely the value that you will be using upon entry into Canada. If you have reason to believe that your valuation would be other than the transaction value, we would be pleased to discuss the other methods for determining the value for duty.

3.4 INCOME TAX

Income tax for non-resident importers is predicated upon the significant presence of your firm in Canada. If you have no presence in Canada, there are no tax implications. An example of significant presence would be, having an office, employees, bank accounts, order desks, agents salespeople, etc. If you feel you may be subject to Canadian income tax, please consult our CLIENT Service Department.

3.5 THE SINGLE BUSINESS REGISTRATION NUMBER (SBRN)

The Single Business Registration number (SBRN) is the number by which the Canadian government identifies a company doing business in Canada. This number, when applied for by a company, illustrates to them whether you are an importer; exporter; GST registrant; or whether you are remitting income taxes on behalf of your Canadian employees. This number for importing and exporting purposes can be secured directly or by L.M. clark ltd.

3.6 MARKING OF PRODUCT REGULATIONS

Certain commodities require their country of origin to be marked on them prior to importation into Canada. This marking must be visible to the consumer when the product is made available for resale. The marking must have words such as “made in,” “produced in,” or “printed in” followed by the country of origin. Rules pertaining to NAFTA products differ from other countries when determining the country of origin.

Examples of some items, which require marking, are Bakeware, Candles, Clocks, Lighters etc. It is advisable to research these regulations prior to shipping into Canada, as compliance after the fact can at times be very difficult. Please contact us if you wish a copy of Canada’s Marking Regulations.

3.7 TEMPORARY ENTRIES

At times certain shipments are sent into Canada for a temporary period and will subsequently be returned to their origin or shipped on to another country. To avoid duty and tax applying to the products Customs Regulations provide for certain Temporary Entries such as E29B, 1/60th, Carnets etc. These entries require either bonds or deposits which are arranged by the Customs Broker.

Should you have goods destined to go to Canada for purposes such as Trade Shows, Exhibitions, Sales Seminars etc. contact the Customs Broker prior to shipping to determine eligibility, bonding requirements and entry requirements to ensure a hassle free entry into Canada.