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Trade News

Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Export/Import: GST and HST - 2010

Monday, July 26, 2010 > 11:47:42

Imported goods
Goods you import into Canada are subject to GST or the federal part of HST. GST/HST is calculated on the Canadian dollar value of the goods, including duty and excise tax, and is collected at the border at the same time as these duties.
The owner or importer of record is responsible for paying the tax on imported goods. If you are registered for the GST/HST and the importer (the person who caused the goods to be imported into Canada), you may claim an input tax credit for the tax you paid on the imported goods.

The 5% GST will apply to taxable importations of goods on or after January 1, 2008 or released from customs control on or after that day. In most cases, HST applies at the border to taxable importations of non-commercial goods imported by a resident of a participating province, regardless of the point of entry into Canada or customs clearance. If such non-commercial goods are imported on or after January 1, 2008, or released from customs control on or after that day, the resident of a participating province will pay HST at the rate of 13%.

No tax applies to items specified as non-taxable importations. Examples of non-taxable importations are:

1.- zero-rated goods (goods that are specifically taxed at 0% in Canada, such as prescription drugs);

2.- medals, trophies, and other prizes won outside Canada in competition (but not saleable goods, such as an automobile);

3.- tourist literature imported by governments or specified organizations for public distribution free of charge;

4.- goods imported by a charity or public institution that have been donated to the charity or institution;

5.- goods imported for the sole purpose of maintenance, overhaul, or repair, if the title or use to those goods does not pass while they are in Canada, and the goods are exported as soon as the services are completed;

6.- goods imported by manufacturing service companies where the goods are processed for non-residents and later exported without being used in Canada. Any parts to be used in or attached to, and materials directly consumed or expended in the processing of those goods, are also non-taxable. The manufacturing service companies must apply in writing for an import certificate to be able to import goods on a non-taxable basis. For more information on this application and the conditions that must be met, see GST/HST Technical Information Bulletin B-069, Goods and Services Tax Treatment of Imports by Exporters of Processing Services (Inward Processing);

7.- warranty replacement property and replacement parts supplied by a non-resident at no charge other than for shipping and handling; and

8.- goods valued at $20 or less sent to a person by mail or courier at an address in Canada, except for the following prescribed goods: excisable goods (such as beer, tobacco, and wine); books, newspapers, magazines, periodicals, or other similar publications, where the vendor was required to register for GST/HST, but did not do so; goods bought from a retailer in Canada and mailed or transported from outside Canada directly to the purchaser.

9.- Taxable non-commercial goods imported into a participating province by a resident of such a province are subject to HST on importation, except for motor vehicles required to be registered in a participating province, or a mobile home or floating home that has been used or occupied in Canada by an individual. The provincial part of HST on imported motor vehicles is paid when the vehicle is registered in a participating province.

Although the provincial part of HST is not payable when you import commercial goods that are destined for the participating provinces, the goods may be subject to the self-assessment rules discussed under Goods and services brought into a participating province.

Forms and publications
GST/HST Technical Information Bulletin B-069, Goods and Services Tax Treatment of Imports by Exporters of Processing Services (Inward Processing)
GST/HST Technical Information Bulletin B-079, Self-Assessment of the HST on Supplies Brought Into a Participating Province
GST/HST Policy Statement P-125, Input Tax Credit Entitlement for Tax on Imported Goods


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