Step 2. Calculate Your Canadian Customs Duty
After you have obtained a business number, import-export account, and chosen the right broker, the next step is to calculate the Canadian Customs Duty you will owe on the goods to plan to import. Canada uses Harmonized System (HS) codes, a 6-digit standardized method of classifying goods traded internationally, to determine import duties. In addition to the 6-digit international classification, Canada uses 4 additional digits to establish duty rates, a 2-digit tariff item, and a 2-digit statistical suffix. Every importer has the right to classify its own imports but the use of a broker helps to ensure that your goods are classified correctly the first time.
Step 3. Purchase your Goods & Arrange Shipping
You’ve established your import business with the Canada Revenue Agency (CRA), chosen an experienced broker, and worked with your broker to estimate your duties and taxes, it’s time to make a purchase and arrange shipping. Foreign suppliers often use International Commercial Terms, more commonly referred to as incoterms, to establish the responsibilities of the buyer and seller in the purchase and who will be responsible for items such as shipping and insurance.
Common incoterms used are Freight on Board (FOB), ExWorks (EXW), and Cost, Insurance, Freight (CIF). In all of these cases, it is the importer’s responsibility to arrange Canadian Customs Clearance and domestic freight. In addition, ocean/air freight, insurance, as well as other costs & arrangements may be required to be completed by the importer.
There is no right answer to the best terms for you or the seller. What’s important is that you understand what parts of the process you are responsible for and when you take ownership of the goods. This ensures that goods are not left accruing fees while you wait to arrange domestic trucking or rail.
Step 4. Clear Your Shipment
Your goods are nearly to Canada and it’s time to clear customs and pay your duties and taxes. Your customs broker is ready to step in to complete all of the necessary forms and documents to get your goods released. To make sure that this process goes smoothly it is important that any additional information requested by your broker is provided quickly. This may include items such as origin of goods documentation, commercial invoices, bill of lading, and shippers export declaration. If you have questions about the documents you need, ask your broker. They are there to assist you and can help answer all of your questions.
Step 5. Receive Your Goods
With the help of your broker, your goods have been released by CBSA and are on their way. You are officially an importer.
Confidently Import into Canada
Importing into Canada can seem overwhelming. By taking the time to prepare, following these 5-easy steps, and partnering with the right Canadian Customs Broker, you can be confident that your goods will arrive without unexpected costs or delays.