Customs Regulations Do I need a "Carrier Code"?
HST Do I have to pay HST on the goods I am importing?
How does HST work?
HST on Summit's Invoices?
Importing Do I have to pay Washington State Tax?
What a supplier needs to know
What are the basic steps?
What does a broker do?
What does Summit need from me when importing a car?
Do I need a "Carrier Code"?If you are bringing commercial goods across the border by yourself you will need to apply for a carrier code with Customs. A "carrier code" is a four character code that identifies the person or company that is carrying goods into Canada. This comes into effect on April 1, 2011.
Previously a carrier code was only required if you imported / carried more than 5 shipments a year on your own. For a copy of the "Carrier Code Application Form" please click "Forms" to the left.
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Do I have to pay HST on the goods I am importing?CBSA only collects the federal portion of the HST on commercial shipments. This means that you will only be paying the current 5% tax on the value of the goods at time of import. (This does not include duty and other taxes if applicable.)
On casual or personal shipments we will have to collect the whole HST on the value of the goods and on our services.
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How does HST work?We will be charging HST on our brokerage charges based on the province in which the goods were located when they were released. We asked for a ruling on shipments going to various provinces but clearing in other provinces. The ruling came back that the rule would be that the HST is based on the province of release as stated above.
If you would like more information on this you can refer to GST/HST Bulletin B-103 which can be located on the CRA's website. This is dated June, 2010
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HST on Summit's Invoices?The column that used to show GST now shows any applicable HST, QST, PST and GST combined on services. If there is GST or HST applicable on the value of the goods it is displayed on a separate line. Our understanding is that the total shown for this column is allowed as an "Input Tax Credit" on your "HST" return.
If you have any futher questions you may want to talk to your accountant or email us at firstname.lastname@example.org.
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Do I have to pay Washington State Tax?Washington Sales Tax...
The following is an excerpt that shows that goods exported from Washington are tax exempt provided they meet the requirements laid out in the legislation. You should have the vendor check with their accountant to ensure that they meet the requirements.
Washington Administrative Code
Imports and exports -- Sales of goods from or to persons in foreign countries.
Exports. A deduction is allowed with respect to export sales when as a necessary incident to the contract of sale the seller agrees to, and does deliver the goods (1) to the buyer at a foreign destination; or (2) to a carrier consigned to and for transportation to a foreign destination; or (3) to the buyer at shipside or aboard the buyer's vessel or other vehicle of transportation under circumstances where it is clear that the process of exportation of the goods has begun, and such exportation will not necessarily be deemed to have begun if the goods are merely in storage awaiting shipment, even though there is reasonable certainty that the goods will be exported. The intention to export, as evidenced for example, by financial and contractual relationships does not indicate "certainty of export" if the goods have not commenced their journey abroad; there must be an actual entrance of the goods into the export stream.
In all circumstances there must be (a) a certainty of export and (b) the process of export must have started.
It is of no importance that title and/or possession of the goods pass in this state so long as delivery is made directly into the export channel. To be tax exempt upon export sales, the seller must document the fact that he placed the goods into the export process. That may be shown by the seller obtaining and keeping in his files any one of the following documentary evidence:
(1) A bona fide bill of lading in which the seller is shipper/consignor and by which the carrier agrees to transport the goods sold to the foreign buyer/consignee at a foreign destination; or
(2) A copy of the shipper's export declaration, showing that the seller was the exporter of the goods sold; or
(3) Documents consisting of:
(a) Purchase orders or contracts of sale which show that the seller is required to get the goods into the export stream, e.g., "f.a.s. vessel"; and
(b) Local delivery receipts, trip sheets, waybills, warehouse releases, etc., reflecting how and when the goods were delivered into the export stream; and
(c) When available, United States export or customs clearance documents showing that the goods were actually exported; and
(d) When available, records showing that the goods were packaged, numbered, or otherwise handled in a way which is exclusively attributable to goods for export.
Thus, where the seller actually delivers the goods into the export stream and retains such records as above set forth, the tax does not apply. It is not sufficient to show that the goods ultimately reached a foreign destination; but rather, the seller must show that he was required to, and did put the goods into the export process.
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What a supplier needs to knowOverview of Shipping to Canada
The first step is the company in Canada will purchasing goods from you. Generally you will agree how the goods are to be shipped and who is responsible for the freight. When the goods are shipped the carrier or freight company is usually the one who faxes the documents to the Customs broker to let them know when and where they will be crossing into Canada. The "supplier" of the goods should provide the carrier with proper documents as outlined below.
- Invoice - This can be a Canada Customs Invoice or a regular commercial invoice provided it shows the information listed below.
- NAFTA Certificate - If the goods are manufactured or produced in the USA you should fill out a certifcate. If the goods are valued at less than $1600 Canadian you can just put a signed statement on the invoice attesting to the fact that the goods were manufactured in the USA.
- Certificates - Any certificates and other documents that might apply.
Information Required for Invoices
- Supplier Name and Address - We need the full name and address of the supplier.
- Consignee Name and Address - The name and address of the company the goods are going to.
- Value and Currency - The value of the goods and the currency the invoice is in. There is no such thing as a "no value" invoice. If the goods are a gift, warranty replacement or samples you should put a reasonalble price that the goods would sell for.
- Clear Description of Goods - Please provide a clear description of the goods. This can include what the goods are made of to help in classifying them.
- Date of Shipment - The date the goods were shipped.
- Optional Information - You can include the purchase order number, your invoice number and other information that may be useful.
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What are the basic steps?The basic steps in importing goods into Canada are:
Research the goods you are thinking of importing.
It is important to make sure that the goods you are planning on importing are allowed entry into Canada. There are various government departments that may have regulations on the products you are thinking of importing. Certain commodities require permits, licenses or other formal permission to allow them entry into Canada. This stage would include calculating the actual costs of importing -- freight, duties, taxes and other service fees.
Set up an account.
If you wish to avoid the trouble and paperwork involved in importing you can set up an account with a broker. (Set Up an Account) A broker is required to have "Power of Attorney" to act on your behalf with customs.
Order the shipment from your supplier.
Generally you would make arrangements for how the goods would be shipped to you at this time as well. Let the supplier and freight company know who the customs broker is going to be so they can let them know when and where they are coming into Canada.
The goods are shipped.
Once the goods are on their way to Canada the freight company will inform the broker when and where they are coming into Canada. The broker will make arrangements with Customs to release the goods and to pay any duties and taxes that are owed.
The goods are delivered.
Once the goods have been cleared they can be delivered to you. Depending on the credit arrangements made with the broker you will either be required to remit funds prior to delivery or you will receive an invoice in the mail.
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What does a broker do?"What does a broker do anyway?" is one of the most commonly asked questions that we get. Well, here is a brief look at at typical shipment to show what we do.
1. Documents received notifying us that a shipment is arriving or has arrived.
We make sure that the documents are in order. This includes getting the required permits, making sure the licenses, certificates and any other special documents are there. If all the documents are not there we will either contact the supplier or client to obtain the documents. In some cases we can generate the documents ourselves.
2. Ocean shipments (before release)
If your goods are arriving by ship there are generally several more steps that we do before the shipment is released. This can include submitting the original Bill of Lading to the steamship agent and ensuring that all the fees have been paid. We have to confirm with the warehouse that the goods are available for customs release before applying to have the goods released.
3. Set up release with customs
Depending on where and when the goods are coming into Canada we will prepare the required documents or information for customs and submit it to them. Generally this is done by entering the details of the shipment and sending the information to customs electronically. In some cases we have to prepare a package with the documents and either courier or deliver it to customs ourselves.
4. Ocean Shipments (after release)
If necessary we will make the arrangements to have the shipment picked up at the warehouse and delivered to you. This includes faxing the warehouse and the cartage company. At this time we also check to make sure that the steamship and the warehouse don't have any reasons why the shipment can't be picked up. They may not have the Bill of Lading or there may be fees that have not been paid.
5. Account for Duties and Taxes
Once the shipment has been released the duties and taxes have to be accounted for within a prescribed time limit. This involves classifying each commodity in the shipment and determining the country of origin for that commodity. This information is transmitted electronically to customs.
6. Invoice sent to client
We generally prepare the invoice and other supporting documents within a day of the shipment having been released.
7. Other things we do
- Retain all documents pertaining to shipments for 6 years.
- Maintain the correct bonds and licenses for each office that we operate.
- Pay the Receiver General the duties and taxes for each shipment.
- Operate "non-revenue" offices at various locations to provide better service and to reduce your costs.
- Keep current with changes made by customs and other government departments.
- Maintain databases with current information on exchange rates, duty and tax rates and requirements of other government departments.
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What does Summit need from me when importing a car?We strongly encourage you to talk to Transport Canada if you have any questions about the car being admissible into Canada. Once you have checked that out we need the following information.
1. Copy of the title/certificate. (If it exists)
2. Bill of Sale
3. When and where you are crossing into Canada.
US Customs requires 72 hours (only business days count) advance notice for any "self-propelled" vehicle. Although they have made exceptions to this we strongly encourge you to ensure that you leave time for this in your schedule.
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