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A Step-by-Step Guide to Importing

Features

This guide has been created to help small and medium-sized enterprises that import goods into Canada. It provides an overview of the commercial importing process and is intended to complement, not replace existing regulations, acts and references.

All regulations, programs, and references in this guide are detailed in Memoranda Series D1 - D22.

Before Importing

Before importing goods into Canada you must:

  1. Obtain a Business Number from the Canada Revenue Agency (CRA) for an import-export account:
  2. Identify the goods you plan to import. You must have an accurate description of the goods you plan to import before proceeding.
  3. Determine which country the goods are coming from and in which country they are manufactured.
  4. Make sure the goods are not prohibited from coming into Canada. For example the following prohibited goods can not be imported into Canada:
    • Material which is considered to be obscene, treasonable, seditious, hate propaganda, or child pornography;
    • Used or second-hand automobiles of all kinds (except from the United States);
    • Used or second-hand aircrafts of all kinds, barring exceptions;
    • Debased or counterfeit currency;
    • Certain birds;
    • Aigrettes, egret plumes and certain other feathers;
    • Used or second-hand mattresses;
    • Articles manufactured or produced by prisoners;
    • Reprints of Canadian works protected by copyright; or
    • Matches made with white phosphorus.

    For more information on prohibited goods, see Memoranda series D9.

  5. Determine whether or not the goods you want to import are subject to restrictions or other requirements. For example:

Tariff Classification, Rate of Duties and Taxes, Value for Duty

Once you are sure that the goods can be imported into Canada, you must determine the:

  • tariff classification;
  • applicable tariff treatment;
  • rates of duty; and
  • tax payable when importing goods.

  1. You must determine the 10-digit tariff classification number for each item you are importing. These numbers are used to determine the rate of duty payable when importing and to provide statistical data to the Government of Canada.

    Tariff classification numbers can be determined by:

    For more information on the methodology for classifying goods in the Customs Tariff refer to Memorandum D10-13-1, Classification of Goods.

  2. Once you have a tariff classification number, you must determine the rate of duty, which is also found in the Customs Tariff.

    • Most Favoured Nation (MFN) Tariff
      Goods originating from all countries, except North Korea and Libya, are entitled to use the rate of duty specified under this column.

    • Applicable Preferential Tariffs
      This column lists reduced rates of duty for goods based on trade agreements such as the:

      • North American Free Trade Agreement (NAFTA);
      • United States Tariff (UST);
      • Mexico Tariff (MT);
      • Mexico-United States Tariff (MUST);
      • Chile Tariff (CT);
      • Canada-Israel Agreement Tariff (CIAT); and
      • Canada-Costa Rica Tariff (CRT),

      or those based on special tariff provisions such as the:

      • General Preferential Tariff (GPT);
      • Least Developed Country Tariff (LDCT);
      • Commonwealth Caribbean Countries Tariff (CCCT);
      • Australia Tariff (AUT); and
      • New Zealand Tariff (NZT).

      The requirements of the particular trade agreement or tariff treatment must be satisfied in order to benefit from a preferential duty rate. You must possess a valid certificate of origin for the specific trade agreement at the time of importation. For example, to claim the UST you must have a valid NAFTA certificate of origin. Various proof of origin requirements exist for all other preferential tariff treatments. These can include Form A, Certificate of Origin or the Exporter's Statement of Origin. In addition, the goods normally have to be shipped to Canada from a beneficiary country on a through-bill of lading.

    A complete list of countries eligible for the above tariff treatments can be found in the front of the Customs Tariff. Regulations on origin are in Memoranda series D11 (D11-4 and D11-5).

  3. Goods and Services Tax (GST)

    GST (5%) is payable on most goods at the time of importation under Part IX, Division III, of the Excise Tax Act

    Some importations such as prescription drugs, medical and assistive devices, basic groceries, agriculture and fishing goods are non-taxable. They are listed under Sehdule VI and Schedule VII of the Excise Tax Act. The tax exemption codes to use on Form B3, Canada Customs Coding Form (PDF, 151 KB) are listed in Memorandum D17-1-10, Coding of Customs Accounting Documents, Appendix H, List 4 (GST Status Codes) and List 7 (Excise Tax Exemption Codes).

    For information on GST/HST, visit the Canada Revenue Agency or contact the CRA GST/HST Rulings Centre nearest you.

  4. Check to see if your goods are subject to excise tax or excise duty.

    Examples of goods subject to excise tax include:

    • 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.

    For more detailed information, contact the Canada Revenue Agency. Complete references on excise tax and excise duty rates are available from Justice Canada in the Excise Tax Act and the Excise Act, 2001.

  5. Determine the value for duty on which you will calculate the rate of duty and tax.

    Ensure that the vendor or exporter provides you with a receipt or a sales invoice. This document must include a complete description of the goods, the selling price and conditions and terms of sale. For more information on CBSA Invoice Requirements, refer to Memorandum D1-4-1 Canada Customs Invoice Requirements.

    There are a variety of valuation methods. The valuation method used will be based on the circumstances of an importation. In most cases where the goods are sold to the importer, the value for duty will be calculated on the price you pay for the goods (selling price). The selling price may have to be adjusted to add and/or deduct amounts when included in the price. Example: freight. Information on the Transaction Value Method can be found in Memorandum D13-4-1, Transaction Value Method of Valuation (Customs Act, Section 48). Other valuation methods can be found in the Memoranda series D-13.

  6. Calculate duties and taxes:

    Take the value in the currency indicated on the invoice. Convert the value into Canadian dollars using the exchange rate from the date of direct shipment. To obtain the proper exchange rate call BIS at 1-800-461-9999.

    Example:

    The following is a sample calculation example of goods valued at USD$100 and subject to 4% duty and 5% GST:

    US$100 x 1.155 = CAN $115.50 ($115.50 is the value for duty)

    $115.50 (value for duty) x 4% (rate of duty) = $4.62 (customs duty)

    $115.50 (value for duty) + $4.62 (customs duty) = $120.12 (the value for tax)

    $120.12 x 5% (GST) = $6.01 (GST)

    Total of duty and tax payable: $4.62 + $6.01 = $10.63

Importing

You must:

  1. Place your order with the vendor, shipper or exporter.

    Marking Requirements:
    Make sure that the country of origin is clearly indicated on the imported goods as required. It is important that you take care of this requirement before the goods leave the country of export. For more information on marking requirements, refer to Memorandum D11-3-1, Marking of Imported Goods.

    Labelling Requirements:
    Make sure you have contacted other government department or agencies, for example the Competition Bureau, Canadian Food Inspection Agency or Health Canada, to ensure your imported goods meet the necessary labelling requirements. Ensuring that this is addressed prior to the goods leaving the country of export will facilitate the importing process.

  2. Identify the desired or expected CBSA office of entry:

    Most shipments are released at the CBSA office of arrival (road or rail border crossing, international airport, sea port, or customs mail centre), however you may choose another inland service point that is closer to your residence if you use a carrier bonded by the CBSA.

  3. Identify the means of shipping to be used:

    • Highway;
    • Marine;
    • Rail;
    • Air;
    • Postal; or
    • Courier service

    Use a shipper with a good reputation who knows customs formalities well. A carrier who has deposited security with the CBSA may transport goods to different points in Canada, in bond, for release other than at the border.

  4. Reporting cargo:

    Unless you transport a shipment yourself, the carrier must declare all commercial goods on arrival. The carrier uses a bar-coded Cargo Control Document (PDF, 33 KB) (CCD) or the Electronic Data Interchange (EDI) system to report to the CBSA.

    Shipments valued at CAN$1,600 or more

    • The carrier will notify you when the goods arrive.
    • The CBSA will inform you of the arrival of postal shipments that are valued at CAN$1,600 or more.
    • The courier service will inform you of the arrival of shipments valued at CAN$1,600 or more.

    Shipments valued at less than CAN$1,600

    • A postal order valued at less than CAN$1,600 will be delivered to you directly by Canada Post. It will include Form E14, Customs Postal Import Form, indicating the classification, value, and applicable rate of duty and tax according to the information accompanying your shipment.
    • Ensure the information shown on your shipment is accurate in order for the duty and taxes to be calculated correctly. Canada Post will charge you a handling fee for this service.
    • For shipments that are valued at less than CAN$1,600 and forwarded by courier, the courier company may offer to complete the customs documentation on your behalf for a fee.

    For information on importing through the postal system or by courier please refer to the postal and courier programs.

  5. Examination of shipment:

    • Border services officers may examine your shipment in order to monitor compliance of CBSA requirements or restrictions.
    • The carrier allows the CBSA to examine the shipment.
    • You are responsible for any costs incurred for the examination.
  6. Obtaining release / Documents

    There are two options for getting your goods released:

    1. Full accounting and payment of duties prior to release

      You will need the following documents:

      • Two copies of the Cargo Control Document (CCD), which will be provided by your carrier.
      • Two copies of the Canada Customs Invoice (or the commercial invoice that contains the data). For information on Canada Customs Invoice requirements, see Memorandum D1-4-1, Canada Customs Invoice Requirements.
      • A paper copy of all import permits, certificates, licences, or required documents from other government departments and agencies or an electronic copy for EDI participants with other government departments (OGD)

      You may use the Commercial Cash Entry Processing System (CCEPS) that is available in certain CBSA offices. CCEPS is a self-service system that allows importers to complete Form B3, Canada Customs Coding Form (PDF, 151 KB). For a list of offices where CCEPS is available, consult Memorandum D17-1-5, Importing Commercial Goods, Appendix 3B.

      The CBSA will assign a unique 14-digit transaction number to your B3 accounting documents for each shipment.

      More information on accounting documents is available in Memorandum D17-1-5, Importing Commercial Goods.

    2. Release of goods prior to the payment of duties

      Release on Minimum Documentation (RMD) allows the release of goods and payment of duties later. For details on this option, refer to Memorandum D17-1-5, Importing Commercial Goods, Section 2, Release.

  7. Payment of duties/taxes:

    You may pay duties and taxes in a variety of ways:

    • Cash;
    • Debit card (available at most CBSA offices);
    • Certified cheque or money order (payable to the Receiver General for Canada);
    • Travellers cheque;
    • Credit card for amounts up to $500;
    • Uncertified cheque for amounts under $2,500 if certain conditions are met (payable to the Receiver General for Canada).

Adjustments and records

  1. Self-adjustment:

    This involves corrections to accounting documents relating to origin, value, classification, or diversion.

    For more information on the coding and processing of adjustment request forms, refer to Memorandum D17-2-1, Coding of Adjustment Request Forms and Memorandum D17-2-2, Processing of Adjustment Request Forms.

    For more information on self-adjustment, review Memorandum D11-6-6, Self-Adjustments to Declarations of Origin, Tariff Classification, Value for Duty, and Diversion of Goods.

Adjustment resulting in a refund of duties

Generally, you may apply for a refund within four years of the date of accounting. The exception is for goods exported from a NAFTA country or from Chile where preferential treatment was not claimed. In this case, you may apply for a refund up to one year after the goods were accounted for.

More information on refund of duties is available in Memorandum D6-2-3, Refund of Duties.

For more information on adjustments resulting in a refund of duties refer to Memorandum D17-2-1, Coding of Adjustment Request Forms and Memorandum D17-2-2, Processing of Adjustment Request Forms.

  1. Retention of records

    You must keep all records pertaining to your importations whether in electronic or paper format, for six years after the year of importation. This includes information relating to the quantities received, price paid, country of origin, vendor information, product information, and all other related information.

    For more information on maintenance of records and books in Canada by importers, visit Memorandum D17-1-21, Maintenance of Records and Books in Canada by Importers.

  2. Adjustment by the CBSA:

    • All commercial importations may be audited and adjusted for origin, value for duty, or tariff classification for up to four years after importation.
    • You must be able to produce all of the information that the CBSA requires.
    • If we adjust your accounting document, we will issue a Detailed Adjustment Statement (DAS) that outlines the adjustment, and you will have 30 days to pay any duties and taxes owing.
  3. Right to appeal:

    You have 90 days to appeal the results of any adjustment/decision issued by the CBSA.

    For information on the dispute resolution process, review Memorandum D11-6-7, Importers' Dispute Resolution Process for Origin, Tariff Classification, and Value for Duty of Imported Goods.

  4. The Administrative Monetary Penalty System (AMPS):

    AMPS is a civil penalty regime that secures compliance with customs legislation through the application of monetary penalties.

Trade Incentives and other information

You can reduce or eliminate customs duty on qualifying goods through duties relief incentives. The following outlines our trade incentives programs:

  • Duty deferral:
    This program enables companies to defer or be relieved of the payment of duties. The following are its three components:

    • Duties relief program:
      The duty relief program enables eligible companies to import goods without having to pay duties and taxes (with the exception of the GST), when the goods are to be exported or incorporated into the production of goods to be exported.

    • Drawback program:
      With the drawback program, duties are refunded on imported goods when these goods have been exported. For more information on this program, see Memoranda series D7.

    • Bonded warehouse program:
      A bonded warehouse is a facility operated by the private sector and regulated by the CBSA. In this warehouse, you may store imported goods without having to pay duties and taxes as long as the goods are not released in Canada.

    For more information on this program, refer to Memoranda series D7.

  • Remissions and temporary importations:
    Some goods can enter Canada duty free. For more information, review Memoranda series D8.

Other service options

CBSA offers a wide variety of other services, many of which use Electronic Data Interchange (EDI) technology and allow clients to benefit from Release on Minimum Documentation (RMD) privileges that mean no longer having to submit paper copies of accounting documents.

Additional information

For information on other federal departments and agencies involved in the commercial importing process, visit the Canada Site or call 1-800-O-Canada (1-800-622-6232).

For more information related to CBSA requirements, contact Border Information Service (BIS) during regular business hours at 1-800-461-9999 or contact your regional CBSA Client Services Office.

To access the Portable Document Format (PDF) version you must have a PDF reader installed. If you do not already have such a reader, there are numerous PDF readers available for free download or for purchase such as:

Date Modified: 2009-02-27

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