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Reduce import fees with customs duty exemptions

Dealing with duties, taxes, and tariffs is an inescapable part of doing business as an importer. Mitigating the impact of these types of import fees can make a significant difference in reducing the cost of international trade.

It's essential for importers to take advantage of opportunities for Canada Customs duty exemption and tax relief programs. Learning about programs that apply to the goods that your business imports can be the first step to reducing various import tariffs and taxes.

Conditional relief tariffs that reduce import duty

Formerly known as the “End-Use Program”, some importers can apply for conditional relief tariffs based on the end use of the items. If the imported goods are brought into Canada to fulfill an end-use, such as manufacturing or repair, the importer may qualify for reduced duty. Specific wording must be used to communicate the conditions that the items must fulfill, such as “for use in,” “for use in the manufacture of,” or “for the repair or remanufacture” of a related good.

In most cases, a certificate must be completed and signed by the end user of the goods and must include details such as the end user’s name, address and occupation, a description of the goods, and a description of the actual use of the goods. In some scenarios, an importer may attest to the intended use of the goods. These certificates can be applied to future shipments of the same goods.

Typically, the major sectors that benefit from conditional tariff relief include agriculture, electronics, chemical, automotive, and medical industries. Even if your company operates in a niche sector, it’s worth determining whether the good you import qualify for lower tariffs.

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GST relief programs

Some businesses can benefit from reduced taxes if eligible for GST/HST relief programs that apply to certain types of imports. Export-oriented companies that don’t make or produce goods but add value to them through processing or distribution may qualify for the Export Distribution Centre Program (EDCP). An EDCP certificate allows companies to import inventory, additive goods, and customers’ goods involved in exporting or processing.

The Exporters of Processing Services (EOPS) program offers GST relief for businesses that provide services such as processing, storage, or distribution of imported goods that are exported to non-residents. Processing includes activities such as repair, assembly, alteration, packaging, maintenance, and other work.

To qualify for EOPS, the goods must be used directly in processing other goods and then exported without being used or consumed in Canada.

Reduced tariffs under free trade agreements

Depending on the origin of the goods you import, you may qualify for reduced tariffs thanks to free trade agreements or special tariff provisions. These agreements are designed to reduce trade barriers in a variety of ways, most notably through preferential tariff rates with nations that are part of the agreements.

On their website, the Canada Border Services Agency (CBSA) lists 15 different free trade agreements with nations and trading blocs from around the world. The CBSA also manages special tariff provisions that include the following:

  • Australia Tariff (AUT)
  • Commonwealth Caribbean Countries Tariff (CCCT)
  • General Preferential Tariff (GPT)
  • Least Developed Country Tariff (LDCT)
  • New Zealand Tariff (NZT)

Maximize your exemptions for duties, tariffs, and taxes

Working with an experienced customs broker can help reveal opportunities to reduce the cost of duties, tariffs, and taxes on imported goods or avoid them in the first place. Contact us to learn more.

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