Process of Importation
All goods imported into Canada must be reported to the CbsA and all applicable duties and taxes must be paid. the amount of customs duty payable will depend upon the tariff classification, the origin and the value of the goods, as determined for customs purposes.
Business Number – importer/Exporter Account Number
All Canadian individuals or businesses importing on a commercial basis must obtain a business number and an import/export account in order to account for their goods. the CbsA uses this number to identify a business and to process customs accounting documents. Application forms to clear commercial shipments are available from all CbsA offices and online from the CbSA’s website at www.cbsa-asfc.gc.ca.
A customs broker acts as an agent of an importer in dealings with the CbsA. Although any agent, customs brokers included, may undertake most customs work on behalf of importers, only customs brokers who have been licensed by the CbsA are authorized to account for goods and pay duties and taxes on behalf of an importer on a commercial basis.
Tariff Classification of Imported Goods
Canada’s Customs tariff is based on the international Harmonized Commodity Description and Coding System. this classification of goods under the Customs Tariff is used to determine the rate of duty that applies, to collect statistics on importations and to determine if the goods being imported are subject to any prohibitions, quotas, anti-dumping or countervailing duties.
Valuation of Imported Goods
To determine the duty and tax applicable to an imported good, importers first need to know the value of the good for customs purposes. the primary method of valuing goods for Canadian customs purposes is the transaction value method. the transaction value is the price actually paid or payable for the goods when sold for export to Canada to a purchaser in Canada, subject to certain adjustments, provided the vendor and the purchaser are not related, or if they are related, provided that it can be shown that the relationship has not influenced the price. Where the transaction value method cannot be used (for example, if there is no sale for export to Canada), the Customs Act provides other methods of valuation that must be applied in a specified order.
Goods imported into Canada from most countries are entitled to Most-Favoured-Nation tariff treatment. there are, however, a number of preferential duty rates available provided the goods in question meet prescribed rules of origin. For example, pursuant to the North American Free Trade Agreement (“NAFTA”), goods which are imported into Canada from the u.s. and Mexico and which meet the NAFtA rules of origin are entitled to enter free of duty. Canada has also implemented free trade agreements with Chile, Columbia, Costa rica, iceland, israel, liechtenstein, Norway, Peru and switzerland. in addition, goods originating in certain “developing” countries are entitled to preferential rates of duty under the General Preferential Tariff or the Least Developed Country Tariff provided certain local content requirements are met.