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A discussion of the two distinct GST compliance methods for real property sales, including where each applies and common confusions, tips and traps.

The United States-Mexico-Canada Agreement (“USMCA”), the successor to NAFTA, provides duty free treatment for substantially all goods traded between those countries which are said to “originate” among them. When a company holding goods situated in one of those countries begins to export to the others, the rules governing access to this duty-free treatment may appear intimidating and confusing. This article attempts to explain the basics in plain English. What does the term “originate” mean? We’ll start by describing two types of exports that do not or may not originate under the USMCA. We will then discuss how to identify those which do originate.

The most common transaction I've dealt with in 35 years of GST/HST practice is the sale of a multi-use rural property, typically 10 - 40 acres. Learn more.

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.

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 like a house, it isn’t always taxed as a house.

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 the customs broker with complete and accurate information.

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.

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 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 and preferential origin.

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