Duty Free and Tax Tips

This section provides you with tips and answers to common questions related to duty and tax on items imported into Canada from the United States.

Planning on exceeding your duty free allowance? Use our Canada Customs Duty Rates, Tariffs and Taxes Chart to see how much duty you will have to pay to bring goods back to Canada from the U.S. that exceed your duty free allowance. You can also use our Canadian Duty Calculator to calculate duty and tax payable on 1,000's of other items.

Duty Free Secrets!

Many cross border shoppers miss out on great deals because they assume the duty they will have to pay upon returning to Canada is too high to make it worth while.

What most consumers don’t know is that many goods brought in from the United States have little or no duty on them! All it takes is a little time and research to find out which ones.

Even if you are over your personal exemption limit, you can purchase an item that qualifies as “duty free”, and will only have to pay provincial sales tax and GST (along with any other applicable taxes) on that item.

How much duty you pay on goods you bring in from the United States is a complicated question that is governed by a number of free trade and tariff agreements. Generally, products that are made in the United States, Mexico, Chile and Costa Rica are duty free, but this is not always the case. Even experienced CBSA customs agents may have to go through hundreds of pages of detailed product descriptions to calculate the duty you owe before your return to Canada

Great deals can be found on items that have little or no duty on them. Below are a few tips to help you along the way:

Tips:

  • Do your research before you go so you know which items you can bring back duty free. Check the Resources section below to find out how.
  • Look for goods that are made in the United States, Mexico, Chile and Costa Rica. These countries have free trade agreements with Canada, and goods made there can usually, but not always, enter Canada duty free.
  • Many goods produced in “Most Favoured Nation” countries (the list is quite large) are a good option as well, since these goods often have low or no duty on them.
  • Look at the product label to see where the item is manufactured.

Resources

Two resources that will help you find out which duty rates, if any, apply to specific items are the Border Information Services (BIS) phone line and the Customs Tariff section of the Canada Border Services Agency (CBSA) website.

We recommend that if you are interested in a few specific items, you use the BIS phone line and ask an agent what the duty is on the items that interest you, as opposed to using the CBSA website, which may require you to look through hundreds of confusing pages to determine the duty payable on your item:

Phone:  1-800-461-9999
Internet: Canada Border Services Agency (CBSA) 

Paying duties

Making a full declaration and paying any duty and taxes you owe is a simple, straightforward process. You can pay by cash, traveller’s cheque, Visa, American Express or MasterCard. Debit cards are also accepted at most offices. If an amount is not more than CAN$2,500, you can sometimes pay by personal cheque. A border services officer should give you a receipt showing the calculations and amounts you paid.

Special Duty Rate

After each trip outside Canada of 48 hours or longer, you are entitled to a special duty rate of 7% under the Most Favoured Nation (MFN) tariff treatment in addition to your personal exemption. The rate applies only to goods that accompany you, that do not qualify for duty-free entry under the North American Free Trade Agreement (NAFTA) and that are worth up to CAN$300 more than your 48 hour and 7 day personal exemptions of CAN$800. The rate does not apply to tobacco products or alcoholic beverages. You still have to pay any GST/HST that applies. In some provinces, provincial sales tax (PST) is also collected.

Regular Duty Rate

If you do not qualify for a personal exemption, or if you exceed your exemption limit, you will have to pay GST/HST, as well as any duty or other tax or assessment that applies on the excess amount. Duty rates vary according to the goods you are importing, the country where the goods were made and the country from which you are importing them. You may also have to pay PST if you live in a province where CBSA has an agreement to collect the tax and you return back to Canada through that province.

How goods qualify under NAFTA

Your goods qualify for the U.S. duty-free rate under NAFTA if the following applies:

  • the goods are for your personal use; and
  • they are marked as made in the United States or Canada or not marked or labeled to indicate they were made anywhere other than in the United States or Canada.

If you would like more information on goods eligible under NAFTA, refer to Memorandum D11-4-13, Rules of Origin for Casual Goods Regulations, which is available on the CBSA’s Web site, or you can call Border Information Services (BIS) at the telephone number listed at the end of this section.

World Trade Organization (WTO) agreement

The duty on a wide range of products originating in non-NAFTA countries has been cut or will be reduced to zero over the next few years. NAFTA goods also qualify for the WTO agreement rate. If the duty rate payable on the goods you are importing is lower under the WTO agreement than under NAFTA, border services officers automatically assess your goods using the lower rate.

Value for duty and foreign sales tax

Value for duty is sometimes called customs value. It is the amount used to calculate duty on your goods, and it is generally based on the price you paid for the goods.

In most cases, any foreign sales tax added to or included in the price is considered to be part of the value. However, some foreign governments will refund sales tax to you if you export the items you bought. In such cases, you do not have to include the amount of the foreign sales tax that was or will be refunded to you.

Protecting your valuables

Before travelling outside Canada with valuable items, you may wish to take advantage of a free identification service that is available at all CBSA offices. This service is available for items that have serial numbers or other unique markings. For items that do not have such markings, the CBSA can apply a sticker to them so they can be identified for customs purposes as goods legally in Canada.

When you show your valuables to the border services officer and state that you acquired them in Canada or lawfully imported them, the officer will list your valuables and their serial numbers on a wallet-sized card called a Form Y38, Identification of Articles for Temporary Exportation. If you are questioned about your goods when you return to Canada, show your card to the border services officer. This will help identify the valuables that were in your possession before leaving the country.

Jewelry

Because jewelry often has significant value and can be difficult to identify, border services officers cannot list it on a Form Y38. It is recommended that you travel with as little jewelry as possible. Taking the following steps before you leave Canada will make it easier for you to re-enter the country with jewelry:

  • Obtain an appraisal report and a signed and dated photograph of each piece of jewelry from a recognized Canadian gemologist, jeweller or your insurance agent.
  • Obtain written certification that the items or jewelry in the photographs are the ones described in the appraisal report.
  • Take the jewelry appraisal reports, certification statements and photographs to a CBSA office to be validated.
  • If the jewelry was purchased in Canada, retain the sales receipt. If you imported the goods previously, make sure you have a copy of your receipt.
  • Carry the appraisal reports, the certifications and photographs when travelling outside Canada.

Modifying an item outside Canada

Under customs legislation, if you take any item outside Canada and change it in any way to enhance its condition or value, the CBSA does not consider it to be the same item when you bring it back into the country. You have to declare the full value of the new item.

Example

You take an old diamond ring with you on a trip outside Canada. While outside Canada, you decide to have the diamond taken out of the old ring and placed in a new setting. When you return to Canada, the ring will be considered new and must be declared accordingly.

Even if part of the ring originated in Canada, the CBSA is required to treat the ring like any other piece of jewellery you may have purchased while outside the country. This rule applies unless you have previous authorization from CBSA to have those repairs or alterations made outside Canada.

Duty on Repairs or alterations to your vehicle/vessel

If you intend to have repairs or alterations made to your vehicle/vessel/aircraft outside Canada, check with the CBSA before you leave. Under customs legislation, the CBSA can no longer consider your vehicle, vessel or aircraft to be Canadian-made if you increase its value, improve its condition or have it modified outside Canada. As a result, you may have to pay duty and the goods and services tax (GST) or harmonized sales tax (HST) on its entire value when you bring it back.

The value of the repairs or alterations made to your vehicle/vessel/aircraft in the United States will be free of duty when it is re-imported into Canada. GST/HST will apply to the value of the repairs or alterations.

Emergency repairs can be made to your vehicle/vessel/aircraft while you are travelling outside the country to ensure your safe return to Canada. To be eligible for this special provision, however, be sure to declare the value of all repairs and replacement parts when you return to Canada with the vehicle.

Transport Canada also has requirements for vehicles that are extensively modified. For more information, contact Transport Canada’s Registrar of Imported Vehicles at 1-888-848-8240.

Duty on goods arriving by courier or mail

The CBSA Postal, Courier and Casual Refund Program covers the operations of three different national programs:

  • The Postal Program deals with all customs related matters in terms of the clearance of international mail both casual and commercial shipments coming into Canada.
  • The Courier Low Value Shipment (LVS) Program is responsible for operations of the Courier/Low Value Shipment (LVS) import process. This process expedites the importation into Canada of approved shipments worth less than $1,600 CAN. This program is available for both casual and commercial shipments.
  • The Casual Refund Program covers procedures for refunding duties, the goods and services tax (GST), the harmonized sales tax (HST), provincial sales tax (PST), provincial tobacco and alcohol taxes, and the Special Import Measures Act (SIMA) on non commercial importations sent into Canada by mail and courier or carried in by a traveller.

Helpful Numbers:

For more information, call Border Information Services (BIS) at one of the following telephone numbers.:

Toll-free in Canada: 1-800-461-9999
Outside Canada: 204-983-3500 or 506-636-5064 (long-distance charges will apply)