Here are some tips from the CBSA (who charges you the fees).
Like many people, I placed an order online and waited impatiently for it to arrive only to receive a text message asking that I pay import taxes, duties and fees before I could clear customs.
When this happens, it’s often frustrating because costs can skyrocket, sometimes totaling the same amount or more than the original cost of the item. Most often, it also cannot be returned to the seller if you decide you don’t want to pay the fees. Sure, you can abandon the item at customs, but you don’t get your initial investment back and you still have to find a dress for your cousin’s wedding. So you’re down to a few hundred bucks with nothing to show for it.
To help avoid the bad shock in the future Vancouver is awesome contacted the Canada Border Services Agency (CBSA) and asked them why we have to pay these kinds of fees and what can be done to prevent them from happening in the first place (if at all).
The good news is that there is a rhyme and a reason for fees and therefore they can be avoided.
Why do import taxes and fees apply when items arrive in Canada?
A CBSA spokesperson told VIA via email that they are “required to collect duties and taxes on all goods entering Canada, unless there is specific legislation in place that fully or partially release the importer from this obligation. These amounts are based on federal and provincial tax rates, as well as current duty rates, which are set by the Department of Finance based on trade agreements. »
If an item is manufactured in a CUSMA country, which refers to the Agreement between Canada, the United States and Mexico, it is not subject to duties, but is subject to tax. As of this writing, this tax is 12% of the cost of the product and duty is 18%.
The CBSA says, “In addition, importers may incur costs from service providers, such as couriers or customs brokers, who facilitate the movement or clearance of their goods. The collection of third party fees such as these is not regulated by the Government of Canada.”
They also note that there has been a 117% increase in the volume of low-value courier shipments over the past three years and with “the changing e-commerce landscape” they predict that this percentage will continue to increase. increase.
The Courier Low Value Shipment program refers to a streamlined customs clearance process offered by Canada Customs to couriers when a shipment is valued at less than $2,500 so that it can be cleared quickly across the border.
Do different postal services (i.e. Canada Post, DHL, FedEx, etc.) have different fees?
According to the CBSA, “postal and courier services are two separate and distinct import streams. Each import stream is subject to different fees.”
Canada Post charges a processing fee of $9.95 CAD per dutiable or taxable mail item, but if the item is duty free and tax exempt, no amount is charged.
Customs clearance may require you to pay import duties or sales taxes to the Government of Canada, while service charges, such as customs brokerage fees, freight charges, or customs clearance fees charged by international couriers or customs brokers may apply when importing a product from outside. from Canada, but this is much less likely to happen in your everyday online shopping.
Nevertheless, administrative costs are charged by private third-party companies and may sometimes be charged after delivery. The Government of Canada does not regulate the collection of these additional service costs by private companies, so it is important to be aware of shipping policies before purchasing.
The CBSA would also like to point out that Finance Canada, the Canada Revenue Agency and the provincial revenue agencies are responsible for justifying the collection of duties and/or taxes. CBSA is the only enforcer.
How can people know if their purchases will be subject to fees before making a purchase?
The CBSA recommends before placing an order that you check the shipping and handling charges that may apply and even receive an estimate of the charges if possible, although many online retailers may not know or be willing to confirm the amount. Whether or not the customer is responsible for duty and customs fees can be found in the shipping policy section of the website or in the terms and conditions at the point of sale.
The CBSA also has a handy tool that estimates duties based on the value and type of goods.
“It’s important to take steps to protect against risk when shopping internationally. Consumer protection laws and standards in other countries may not be the same as those in Canada. For example, you may find yourself paying a service fee on top of any duties and/or taxes owed when purchasing from an international seller,” the spokesperson adds.
Some popular online shopping sites that are not subject to customs duties
To completely avoid duties and taxes, it is easier to shop at Canadian companies, as US companies can drop off shipments from non-CUSMA countries. It’s also worth knowing that the more expensive an item, the more likely it is to be held up at customs. Shein products should theoretically be eligible for customs duty, but more often than not they don’t get stopped at customs. However, the site includes a disclaimer that says “usually you don’t have to pay customs tax. However, due to more and more strict customs check, we can’t 100% guarantee whether you will be charged by customs for tax or duty or not.”
They offer partial refunds to people who send them a tax bill receipt or you can refuse the item and they will refund you when the shipping company returns it.
Other popular stores outside of Canada that will not be stopped for duties and taxes include:
Pretty Little Thing (they will cover duties but additional taxes may apply)