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How to reduce import taxes and solve problems with online purchases

How to reduce import taxes and solve problems with online purchases
Online shopping is steadily rising in every corner of the world. Over 2.6 billion people were shopping online by the end of last year – nearly one third of the world’s population. Importers and shoppers can reduce import taxes  and solve problems with online shopping by understanding regulations and their rights under Canadian law.

E-commerce sales are expected to top $5 trillion in revenue before the end of 2025. The future looks bright for online commerce, so importers and shoppers should know their full range of options to reduce the cost of imports and protect themselves if an online purchase goes wrong.

Reduced import taxes and duties with de minimis thresholds

The Canada-United States-Mexico Agreement (USMCA/CUSMA) includes specific rules for imported goods that are transported from the U.S. or Mexico into Canada. Importers can reduce taxes and duties on some items, depending on the value of the goods and their origin. Knowing the de minimis threshold for goods imported into Canada can help reduce costs.

The most recent de minimis thresholds were established on July 1, 2020, including: BLog Customs Brokers  (2)

  • Goods valued at $20.00 or less will qualify for waived customs duties and taxes
  • Goods valued at $20.01 or more, imported from countries other than the U.S. or Mexico, will be subjected to duties and taxes
  • Goods valued at value of $40.00 or less, imported from the U.S. or Mexico, will qualify for waived duties and taxes
  • Goods valued from $40.01 to $150.00, imported from the U.S. or Mexico, qualify for waived customs duties while taxes remain applicable
  • Goods valued at $150.01 or greater are subject to applicable duties and taxes when imported from any country

Can I get a refund for duties and taxes?

A good place to start is with the Canada Border Services Agency (CBSA). The CBSA offers services across Canadian provinces and territories, such as Casual Refund Centre offices, that process non-commercial refund claims for duties and taxes on postal, courier, and traveler imports.

The duty and taxes you pay can be refunded for the following reasons:

  • There's an opportunity to apply a tariff classification with a lower duty rate 
  • There is an undeclared duty-free end-use tariff code
  • The goods may qualify for a free trade agreement
  • There’s a potential to allow certain deductions from the value for duty, such as freight charges and discounts, which would lower the amount owed to CBSA

What if my online purchase isn't what was expected?

Good things don’t always come to those who wait. If you’ve ordered online and haven’t received the goods you've purchased after the agreed upon date, here’s what you can do:

problem with an online purchase

Reach out to the seller first - Legitimate businesses will want to ensure their customers' satisfaction. They'll let you know how to get a refund on an online purchase or make an exchange, if necessary.

Keep accurate records - It's easy to take screenshots of the website that you ordered from, including the date you ordered, claims about shipping times, receipts, and any other correspondence.

Pay by credit card - You can dispute charges with your credit card company. Debit or prepaid cards may not offer the same protection.

Reach out to authorities - Get help from the Competition Bureau, Better Business Bureau, Canadian Anti-Fraud Centre, or the Consumer Protection agency in your area.

Due diligence for online purchases is time well spent

Studies show that 60% of all purchasing journeys begin online. With a few clicks, consumers and importers have the ability to research the reputation of sellers, discover cost-saving opportunities, and understand their rights under Canadian law.

Cole International has achieved more than a half-century of excellence in customs, compliance, and freight forwarding. Reach out to one of our experienced specialists.

Keeping you in the loop. It's what we do.

Contact us today!
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