If your vehicle is eligible for importation into Canada according to both CBSA and Transport Canada requirements, you will have to pay import assessments that may include duty, excise tax and the 5% goods and services tax (GST). Provincial or territorial sales tax may apply when you license your vehicle.
If you import a vehicle from outside Canada into Nova Scotia, New Brunswick or Newfoundland and Labrador, and you paid 5% GST on your importation, you will also have to pay the 8% provincial part of the harmonized sales tax (HST) when you license your vehicle.
Generally, you do not have to pay duty on a vehicle imported for personal use that was manufactured in the United States, Canada or Mexico; however, the CBSA will assess duty on a vehicle manufactured in a country other than the United States and Mexico. Duty and taxes are assessed on your vehicle’s “value for duty.” This is a value based on the price you have paid or will pay for the vehicle in Canadian funds before any consideration for a trade-in.
The price paid for a vehicle includes not only the gross price, but also all other amounts such as foreign sales taxes or warranty payments collected by the vendor. Any credit you may receive for a trade-in does not reduce the price that must be declared when the vehicle is imported into Canada.
Specific Duties & Taxes
The following are duties and taxes you will have to pay on any vehicle you import from the United States. Keep in mind that you will be required to pay most of these duties and taxes at the border when you are importing your car, so be prepared.
It is important to note that the taxes listed below would be payable even if you purchased your vehicle in Canada, so you may experience significant savings by purchasing your vehicle in the United States.
Import Duty: Import Duty is only applicable to non-NAFTA vehicles and is calculated at 6.1%. NAFTA cars are vehicles that have been manufactured or have been assembled in Canada, the US or Mexico with a minimum of 55% content. A NAFTA vehicle is exempt of ANY tariffs, duties or taxes when sold in Canada, the US or Mexico.
You should call the Border Information Service (BIS) number listed at the end of this section to verify that the vehicle you intend to purchase is in fact duty free.
Goods & Services Tax (GST): Whenever any vehicle (new or used) is imported into Canada it is subject to a GST tax of 5%. You pay this tax immediately to Canada Customs Agents at the time of bringing the car over the border. (You would also pay this tax on any new vehicle purchased in Canada and any used vehicle purchased at a registered car dealer in Canada)
Provincial Sales Tax (PST): Once a vehicle is successfully imported, a provincial sales tax is payable at the time of registration in Canada. PST is based on the current tax rate for your respective province or jurisdiction. It should be calculated at the exchange rate prevailing in the hour that you register the car, but in practice many provincial insurance agents use the official Canada Customs receipt to calculate provincial taxation.
Air Conditioning Tax: If your vehicle has air conditioning, a $100 Air Conditioning tax is also payable. It is paid immediately upon crossing the border.
Excess Weight Tax: You will have to pay additional excise taxes if your vehicle weighs more than 2,007 kilograms or 4,425 pounds.
Gas Guzzler Tax: On March 19, 2007 the Canadian Federal government introduced a new excise tax on fuel-inefficient vehicles. This applies to all new vehicles purchased in Canada or imported from the US. Automobiles that have a weighted average fuel consumption rating of 13 or more litres per 100 kilometres will be subject to the excise tax at the following rates:
- at least 13 but less than 14 litres per 100 kilometres, $1,000;
- at least 14 but less than 15 litres per 100 kilometres, $2,000;
- at least 15 but less than 16 litres per 100 kilometres, $3,000; and
- 16 or more litres per 100 kilometres, $4,000.
U.S. automobile import example
The following example shows a breakdown of the customs duties and taxes assessed on a U.S. manufactured 2005 model year automobile sold for export from the United States to a purchaser in Canada and imported in the 2005 calendar year.Purchase price (includes state taxes): $50,000 US Value for duty:
(price converted to Canadian currency
at current rate of exchange: $50,000.00 x .90*) $45,000 CAN Duty at 0%: $0 Excise tax on air conditioner: $100 Excise tax on excess weight 0 over $100: $100 Value for tax (value + duty + excise tax): $45,200 GST ($45,200 × 6%): $2,260 Total duties and taxes paid to CBSA: $2,460 Total cost: $47,460 *Example only
Trade in exampleGross price of vehicle (based on dealer’s invoice): $25,000 Trade-in allowance: $10,000 Total payment: $15,000
While you may have only paid the total amount of $15,000, the gross price of the vehicle of $25,000 is the value for duty that must be declared to allow for the calculation of any applicable duties and taxes.
RIV fee: In order to process a US vehicle, the Canadian Registrar of Imported Vehicles collects a fee of $195.00 + GST in all provinces except Quebec where it is $195.00 + GST and QST immediately when you bring the car over the border. This fee applies to all vehicles imported into Canada.
Provincial Safety & Emissions Inspection Fees: Most provinces and territories also have their own safety-inspection and emissions programs. For more details, check with the motor vehicle department of your province or territory.
Border Information Services (BIS) & Canada Border Services Agency (CBSA)
Toll-free in Canada: 1-800-461-9999
Outside Canada: 204-983-3500 or 506-636-5064 (long-distance charges apply)
Web site: www.cbsa.gc.ca
If you call during regular business hours Monday to Friday (except holidays), from 8:00 a.m. to 4:00 p.m. (local time), you can speak directly with an agent by pressing “0″ at any time.