Why using the right tariff treatment code for your imports matters
For goods imported into Canada, the tariff treatment code plays an important role in how duty is applied and how import costs are managed.
While the HS code identifies a product, it is the tariff treatment code that determines how that product is treated for duty purposes.
This code is required on the Commercial Accounting Declaration (CAD) and influences the duty rate for each shipment. Because of this, it’s important to get it right when planning your imports.
In this article, we explain how the tariff treatment code works and how choosing the right one can help increase duty savings and reduce import costs.
The tariff treatment code tells the Canada Border Services Agency (CBSA) which tariff measure or trade agreement is being claimed on the import declaration.
This two-digit code indicates whether the goods are subject to Canada’s standard tariff rates or qualify for preferential treatment under a unilateral program or free trade agreement (FTA).
In Canada, the duty rate is determined by the tariff classification number (HS code) and the origin of the goods, which is represented by the tariff treatment code.
As a result, the same product with the same HS code can have two different duty rates depending on its tariff treatment code.
Tariff treatments are either non-preferential or preferential, and each has its own codes.
These apply when no preferential program or trade agreement applies. They include:
Preferential tariff treatment applies when goods are eligible for reduced or zero-duty rates under a specific unilateral preference program or a free trade agreement.
These provide more liberalized tariff treatment rates for imports from eligible developing countries without a reciprocal trade agreement, such as:
These apply when goods qualify under a specific bilateral or multilateral agreement and meet origin requirements. Common examples include:
For the complete list of tariff treatment codes, refer to Appendix H of Memorandum D17-1-10.
Using the correct tariff treatment code ensures accurate import declarations and offers several other benefits, including:
The right code can help you apply reduced or zero-duty rates when your goods qualify under a preferential program or agreement, instead of facing higher standard tariffs. This can help lower the duty paid on your shipment.
Using the correct tariff treatment minimizes guesswork and helps you plan your landed costs more accurately. This makes it easier to forecast your expenses and manage your profit margins.
Accurate tariff treatment at the time of import means fewer corrections or adjustments are needed after release. This can help you avoid additional duties, interest, and administrative costs.
At Cole International, we offer trade consulting and customs brokerage services to help Canadian businesses apply the correct tariff treatment and keep their import declarations aligned with CBSA requirements.
Our team can work with you to:
We don’t believe in guesswork. We get it right the first time.
To make sure you’re using the correct tariff treatment codes and claiming the right duty rates, reach out to one of our trade professionals.