When and how to use the Duties Relief Program

To use the program, you need CBSA approval, a valid licence number, clear records that track the goods while they are in Canada, and a process to meet export and reporting requirements.

The Duties Relief Program may apply when you import commercial goods into Canada that are not intended to remain in the Canadian market.

As one component of Canada’s Duty Deferral Program, it may allow qualified companies to import goods without paying duties or taxes at the time of import, provided that the goods are eventually exported.

In this article, we explain when the Duties Relief Program may apply, how to apply for it, and common mistakes to avoid.

What is the Duties Relief Program?

The Duties Relief Program is a trade incentive program offered by the Canada Border Services Agency (CBSA) for imported commercial goods that are later exported from Canada.

In most cases, qualifying goods can be imported without paying customs duties, anti-dumping and countervailing duties, or excise taxes at the time of importation, as long as the goods are for export.

GST/HST is not relieved under the program. However, the GST/HST payable may be reduced because it is calculated on the value for tax after the relieved duties are taken into account.

The program is different from the Duty Drawback Program. Duties Relief applies before duties are paid, while Duty Drawback may apply after duties have already been paid.

When you can use the program

The Duties Relief Program may apply when you are approved to import commercial goods that will later be exported from Canada.

This may include goods designated for:

• Further processing in Canada
• Display or demonstration in Canada
• Development or production in Canada
• Exportation without being used in Canada for another purpose

The program may also apply when goods are sold or transferred to another approved participant in the Duties Relief Program before export, provided that the program requirements are met.

There are also exclusions. Relief may not be granted for certain duties or taxes under the Excise Act, 2001, the Excise Tax Act, or section 20 of the Customs Tariff on tobacco products or designated goods.

How to apply for the Duties Relief Program

To participate in the Duties Relief Program, you need to complete Form K90, Duties Relief Application, submit it through the CARM Client Portal (CCP), and receive CBSA approval.

If approved, the CBSA will issue a unique licence number. When importing goods under the program, you must enter this licence number in the Special Auth Duty Relief Licence field of the Commercial Accounting Declaration (CAD) in CARM.

Your records must be detailed enough for the CBSA to verify the receipts, activities, and movement of goods covered under the program while they remain in Canada.

In most cases, goods imported under the program must be exported within four years from the date of importation, or within five years for imported spirits used to manufacture distilled spirits.

If goods no longer qualify for duties relief, you must report the change to the CBSA through a CAD Adjustment Form in CARM and pay any duties owing within 90 days.

Non-compliance may result in a demand for payment, removal from the program, and penalties under the Administrative Monetary Penalty System (AMPS).

Four common mistakes to avoid

Common misunderstandings and issues related to the Duties Relief Program include:

1. Assuming the program applies automatically

You need to apply to the CBSA and be approved before importing goods under the program.

2. Using it as a general duty exemption

The program is intended for qualifying goods that are ultimately exported, not for goods imported for final sale or use in Canada.

3. Keeping incomplete records

Your records need to connect the imported goods to the exported goods or export activity.

4. Considering the program after duties have already been paid

If duties have already been paid, the Duty Drawback Program may be more relevant.

How we can help

At Cole International, we offer trade consulting and customs brokerage services to help Canadian businesses assess duty relief opportunities and manage import requirements.

Reach out to one of our trade professionals to discuss whether the Duties Relief Program may apply to your imports.