Canadian GST Issues for Non-Resident Importers
Non-residents often act as importer of record for goods brought into Canada. They pay any duties owing plus, in most cases, the 5% federal component of GST. Non-residents who are registered for GST generally recover this tax as an input tax credit. However, the majority of non-resident importers are not registered. This article discusses: Where…
The Boundaries of the GST Residential Property Exemption
The sale of a residence such as a house or apartment building is generally exempt from GST once it has been occupied as a place of residence. However, this exemption has limits and does not always apply where one might intuitively think it should. In other words, if it looks like a house and smells…
Managing Customs in a Small or Medium Size Organization
Most small and medium sized organizations do not import often enough to hire a full-time customs manager. The job tends to be a part-time responsibility of someone in accounting or logistics or, in many owner-managed businesses, the President. The biggest challenge for this part-timer is having sufficient knowledge of trade and customs matters to provide…
GST Recovery for Non-Resident Importers
Most commercial goods that enter Canada are subject to the federal goods and services tax (GST), the Canadian VAT. The current rate is 5% of the duty paid value. The major exceptions are for certain basic groceries, prescription drugs and biologicals, medical and assistive devices and products of agriculture and fishing. The full list of…
Russia Sanctions at NATO’s Weakest Point
Prior to Covid, the Baltic Sea was a popular cruise destination for travelers from North America and Western Europe. Saint Petersburg, with its Hermitage Museum and window into the mysteries of Russia, was the highlight for many. Few people who live outside that region are aware that Saint Petersburg is not Russia’s only port on…
The Hidden Implications of FTA Origin Audits
Importers who claim preferential tariff treatment under a free trade agreement (“FTA”) are generally familiar with the certificate of origin provided by the exporter or producer of the goods. In most FTAs, importers are required to have this certificate in their possession at the time the preferential treatment is claimed. Many importers assume that the…
Restrictions on trade with Russia and Belarus
Effective March 2, 2002, goods originating in Russia and Belarus are denied Most Favoured Nation (MFN) treatment on importation to Canada, leaving them subject to the 35% General Tariff rate. The only other country with this infamous distinction is North Korea. It is important to note that the 35% tariff applies to goods that “originate”…
The basics of origin in international trade
The concept of origin for goods in international trade can be confusing, for several reasons. First, a good generally originates in the country where it is manufactured, which may not be the country from which it is exported. Second, not all forms of manufacturing confer origin. Third, there are two types – non preferential origin…
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The basics of customs valuation
The term “customs valuation” has a mysterious ring to it, as if it were based on some esoteric, perhaps dark principles. In fact, it is usually fairly straightforward. The valuation of 90% of imports is based on “transaction value”, the price payable on the commercial invoice issued by the exporter. The trick is to recognize…
The opportunities of CARM
If you import goods into Canada, you will have heard of the CARM initiative of the Canada Border Services Agency (CBSA). Your broker will be peppering you with emails to encourage you to register at the online portal, post a security bond and begin paying your duties and taxes directly. Unless you wish to account…
Preparing your customs documents using online resources
Importing goods can be intimidating. The customs rules are complex and inflexible, and the forms full of details and coding that appear undecipherable. That is why we have customs brokers. Many importers to assume that, once they hire a broker, they do not need to invest time and energy in understanding customs and trade concepts.…
Peter L. Mitchell Professional Corporation 