Duty over 200% - How did that happen?
It can be a challenge to keep track of all the rules and costs associated with the import of goods into Canada. And sometimes, just when you thought you knew what the duty rate was, you get surprised with an unexpectedly high rate of over 200 percent!
In this blog, we'll try to inject some clarity into the matter of duties on agricultural products so you can get on with your business of importing goods without the headache of duty rate surprises.
How it works: TRQs
Canadian Tariff Rate Quotas (TRQs) were introduced in 1995 as a way to offer protection to Canada’s agriculture sectors by limiting the amount of certain products that can be imported at a low rate of duty. Most meat, dairy and cereal products are subject to TRQs.
Under TRQs, imports of these products are subject to two different duty rates, depending on how much of that product has already been imported in a given year. Low “within access commitment” rates of duty will be applied up to a predetermined limit, while imports in excess of this limit are subject to significantly higher “over access commitment” duty rates.
The full list of TRQ goods can be found in the Import Control List under the Export & Import Permits Act. Imported agricultural products that are subject to TRQs include poultry, beef, dairy, wheat and barley and many goods made from these products. The complete list of import-controlled agricultural products can be found on the Global Affairs Canada website.
What can you do to minimize duty charges?
There needs to be a lot of careful scrutiny and paperwork when importing TRQ commodities. Being prepared and knowing what to expect will make this a lot easier.
Do your homework – make sure you know at the time of importing whether the lower “within access commitment” duty rate or the higher “over access commitment” duty rate is in effect for your imports.
For some goods, you can only access the lower duty rate if you have obtained import quota shares and an import permit – subject to specific terms and conditions –in advance from Global Affairs Canada. Other goods are “within access commitment” on a first come, first served basis and open to all importers without prior approval.
We can help
Our consulting team can help you sort out all the particulars around importing and exporting in Canada. They can also assist with related appeals, audits or penalty mitigation if needed. For more information, visit our website or...
Information provided by: Canadian Consulting Dept. - Cole International
