Importing goods into Canada can be a difficult process. It is important to know the process behind importing goods, and how you can start your own import business.
This guide will cover every step in the process on how to import goods into Canada.
Register a Business Number
If you don’t already have a registered business, you’ll need to start one before you can import anything into Canada. Registering for a business number with the Canada Revenue Agency (CRA) will allow you to register for an import/export tax account.
You should also consider registering for a GST/HST number, along with a corporate income tax account – as these are generally things you will need to register for when starting an import business. (Note: as always, speak to your lawyer/accountant for specific legal and tax requirements).
Collect Information on the Goods You’re Importing
When importing into Canada, you should make sure to have an accurate description of the goods you plan to import. You should also make sure that they can even be imported into Canada in the first place.
Calculate your Duty and Taxes Owed on the Goods
In order to accurately calculate these figures, you’ll need to know:
- The tariff classification of the goods
- The applicable tariff treatment
- The rates of duty
- And the tax payable when importing goods
A tariff classification is a 10-digit number used to determine the rate of duty payable when importing goods. The Customs Tariff guide by the CBSA will indicate both of these figures.
“Tax payable when importing goods” refers to GST, excise tax and excise duty.
For imported goods, you only pay the federal portion of tax (GST), regardless of whether or not you live in a province with harmonized sales tax (HST).
No GST is charged in goods that are considered “zero-rated,” such as medical devices or prescription drugs. For more information on types of supply, consult the Canada Revenue Agency’s guide.
Hire a Customs Broker
Many businesses hire a customs broker to help facilitate the process of importing goods into Canada.
A customs broker can help obtain and prepare relevant documents, arrange payments, and generally make it easier to navigate the world of importing.
Place Your Order with the Exporter
When placing an order with the exporter (sometimes the vendor, or another shipping company), they are responsible for getting the documentation together for sending the goods to Canada.
Some of the things they’ll need to prepare include:
- Packing list: describes the goods in detail.
- Bill of Lading: issued by the exporter to the carrier, this describes the goods being shipped, acknowledges their receipt, and sets out the contract for the export of the goods.
- Commercial Invoice: a document from which you pay the exporter.
- Canada Customs Invoice: a document used to declare goods to customs when importing into Canada.
- Certificates of Origin: these documents show where certain materials originated from. CoO are required for goods eligible for favourable tariff treatment under particular trade agreements.
All of these documents are prepared by the exporter and given to the carrier. If the value of the shipment is less than $2500 Canadian dollars, you don’t need a separate Canada Customs Invoice – provided that the commercial invoice has all of the necessary details for customs.
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Choose a Carrier
Your chosen cargo carrier is responsible for preparing a Cargo Control Document. This document is also sometimes referred to as a waybill or manifest. The carrier can prepare this from the exporter’s bill of lading and is used to report the shipment to the CBSA. When reporting, the documents can be submitted through the Electronic Data Interchange (EDI) system.
Obtain the Release of Your Goods
In order to have your goods released, you have two options:
- Present a full accounting and pay all duties at once
- Have your goods released prior to the payment of duties
Presenting a full accounting means having all of your paperwork present and complete. B3-3 Canada Customs Coding Form is the form you’ll need to complete and have ready for customs officials. For more information on B3-3, see the CBSA Memorandum D17-1-10.
For your goods to be released by customs, you’ll also need:
- Two copies of the Cargo Control Document (CCD)
- Two copies of the Canada Customs Invoice (or commercial invoice that contains the information)
- A paper copy of all import permits, certificates, license, or required documents from other government agencies, or an electronic copy if using EDI
For more information on having goods released prior to payment of duties, see the CBSA’s Memorandum D17-1-4: Release Procedures.
By following these steps, you’re sure to have your import business up and running quickly and without unnecessary difficulty.