To apply tariff treatment correctly at the time of accounting, the tariff item, the origin of the goods, and any required support for a preferential claim must all be accurate and supported.
When you import goods into Canada, tariff treatment is one of the key factors that determines the duty rate you pay.
Canada does not apply a single universal duty rate to all imported goods, and the same product may be subject to different duty rates. It all depends on its tariff treatment and whether the conditions for that treatment are met.
In this article, we explain what a tariff treatment is, how the main types of treatments are grouped, and what must be correct when a tariff treatment is claimed.
Tariff treatment refers to the customs duty rate that applies to imported goods under Canada’s Customs Tariff.
The Canada Border Services Agency (CBSA) applies the applicable tariff treatment at the time of accounting for the goods.
The Customs Tariff sets out multiple tariff treatments, each linked to specific countries or groups of countries. The applicable tariff treatment determines the duty rate for a particular tariff item.
Tariff treatment and tariff classification are related but are not the same thing.
Tariff classification identifies the goods by assigning the correct HS code and tariff item. The tariff item lists the duty rates for the available tariff treatments.
Tariff treatment determines which of the listed duty rates applies to the goods being accounted for, based on the origin of the goods and whether the requirements for that treatment are met.
In Canada, tariff treatments generally fall within two main groups.
Unilateral tariff treatments are duty treatments that Canada extends under its own framework. These include:
The applicable treatment is determined by the country of origin and any applicable eligibility conditions set out in the Customs Tariff.
Preferential tariff treatments are provided under Canada’s free trade agreements (FTAs).
They are reciprocal arrangements negotiated with specific trading partners, and they apply only when goods meet the rules of origin under the relevant agreement and the claim can be supported. Examples include:
Unlike unilateral tariff treatments, preferential tariff treatments require the goods to meet the agreement-specific rules of origin set out in the relevant free trade agreement.
When a tariff treatment is applied, three elements must be correct.
The goods must be properly classified and assigned the correct HS code and tariff item. Each tariff item lists the duty rates that apply under the available tariff treatments.
At the time of accounting, the tariff treatment must be reported using the correct tariff treatment code.
The origin must be determined under the applicable origin rules. Origin is not necessarily where the goods are shipped from.
If you claim a preferential tariff treatment, your claim must be supported by the proof of origin required for that treatment, and it must be in your possession at the time of accounting.
At Cole International, we offer trade consulting and customs brokerage services to help Canadian importers identify the correct tariff treatments for their imports.
Our team can work with you to:
We don’t believe in guesswork. We get it right the first time.
Reach out to one of our trade professionals to discuss how tariff treatment may affect your import costs and compliance.