Importers and exporters pay a lot of duties and taxes. The extra costs can drive up prices for your customers. But you can try to cut your expenses through programs offered by the Canada Border Services Agency. The agency has programs designed to eliminate or defer your duty payments on imported goods, but the goods you import must meet specific program requirements.
If your imported goods won’t remain in the country, the Temporary Importations program is a good option. To avoid paying taxes and duties on items you’ve imported, fill out Form E29B to get a Temporary Admission Permit. You might need to pay a deposit that’s refunded when you export the goods.
So how do you know if your goods qualify as temporary imports? Basically, if the items you have shipped to your company aren’t staying in Canada, they are temporary imports. For example, if you repair electronics for international customers, you’d ship repaired items back to your non-Canadian customers. So the items shipped to you for repair are temporary imports. Another good example of temporary imports are items brought into the country to temporarily use for demonstration or training purposes.
A.T.A. Carnets is an internationally recognized customs agreement that speeds up the customs process on imported goods. It covers virtually all goods that are brought into the country on a temporary basis, except items that are disposable, consumable, or being brought in for repair.
Over 76 countries accept A.T.A. Carnets. If you import items from one of the participating countries, you don’t need a Temporary Admission Permit. You also don’t need to pay a deposit before customs releases the goods.
If you ship in displays or demo products for trade shows, this is a good way to avoid paying taxes and duties. It’s also an option for anyone who travels with professional equipment.
Canadian Goods Abroad Program
If your business regularly exports items for repair, alterations, or additions, the Customs Act requires you to pay duties and taxes on the goods when they return to the country. But the Canadian Goods Abroad program ensures you only pay taxes and duties on the value added to the goods you originally shipped. This means any additional materials or labour paid for while the items were out of country. So if you send clothing abroad for alterations, you would pay taxes and duties on any material added to the item and any labour costs. But you wouldn’t pay taxes and duties on the original piece of clothing.
Duty Deferral Program
The Duty Deferral Program has three different options. The Customs Bonded Warehouse Program lets you store the items you’ve imported in a customs-run facility until they are released for Canadian consumption or exported. This way you don’t have to pay the taxes and duties upfront.
If you plan to export the items you’ve imported in the same condition, the Duties Relief Program relieves you of paying taxes and duties completely. If you’re exporting goods that you’ve already paid taxes and duties on, the Drawback Program lets you request a refund.
The amount of taxes and duties your company pays on imported goods affects the prices of the goods or services your company sells. So if your company is shelling out a lot of money to customs, try cutting costs through an available program. You might just save enough money to get your prices lower than your competition.