Frequently Asked Questions
- What is a customs broker, and why do I need one?
- What do I need in order to import goods into Canada?
- Will I have to pay duties and taxes on my imports?
- Can I clear my own freight, or should I hire a broker to do so?
- I believe I've been paying too much in duties and/or taxes. Do I have any recourse to recover the funds?
- How do I set up an account with a customs broker?
- A customs broker is a person or company licensed by the Canada Border Services Agency (CBSA) to conduct business on behalf of others, when dealing with imports into Canada. While imports can be processed and performed without the assistance of a customs broker, there are numerous reasons that employing a customs broker to act on your behalf can be beneficial. These include, but are not limited to, trade compliance, facilitation of payment to CBSA, ensuring the lowest legal duty rates, general consulting to maximize efficiency in international trade, and perhaps most importantly, a significant reduction in stress and aggravation for the importer. Whether you import goods daily or once a year, a customs broker can benefit your business.
- In order to import commercially into Canada, you must have a registered importer business number with the federal government. This importer account is simply an extension of a corporation's federal business number in Canada. Once this account has been opened, CBSA requires that a commercial invoice showing the value of the goods, their country of origin, number of pieces, and weight of the shipment, along with the date of direct shipment be presented prior to arrival of the goods. Additionally, the carrier responsible for transporting the goods must attach an original PARS (pre-arrival review system) label, which serves to match their individual shipment when the goods arrive at the border with the electronic information presented to CBSA before arrival.
- The rate of duties and taxes payable on any given product is entirely dependent on the nature of the goods imported. Additionally, the majority of commercial items imported into Canada are subject to the Goods and Services Tax of 5%. In certain instances, some items may qualify for preferential treatment due to the products’ end-use or qualification under one of our many trade agreements, and may be either exempt from or zero-tax rated for the Goods and Services Tax. Rates of duty are determined according to the Customs Tariff, available at www.CBSA.gc.ca.
- While it is possible for a company to clear freight on its own behalf, it is not necessarily recommended. This is due to the constantly changing state of regulations in the international trade community. Hiring a customs broker not only helps to reduce legwork and headaches on the clients' part, but also helps to ensure compliance in the event of an audit.
- Yes. If you believe that your goods have been incorrectly classified, resulting in an overpayment of duties, there are methods to review, and amend past entries (up to four years after time of importation). Should CBSA approve the claim, refunds can be issued.
- In order to set up an account with a customs broker, certain forms and letters must be filled out. These include the following:
- Agency agreement: This document is completed by the importer, and gives authority to their appointed customs broker to act on behalf of the importer.
- GST agreement: This document signifies that clients are ultimately responsible for monthly duties and taxes owed to CBSA.