CORPORATION TO CORPORATION
With the holiday season upon us, many corporations may be sending gifts to clients and vendors. Before your company sends out gifts internationally, you should be aware of a few details:
1) Arrange for customs clearance through your customs broker. The receiver of a gift shouldn’t be responsible for these charges, and will not have the required knowledge of the item being gifted in order to complete the Customs entry. Even though these are free, non-solicited gifts, they will still be required to clear through Customs, and all applicable duties and taxes to be paid. This means that the gift in question will need to be accompanied by a pro-forma invoice, including all of the same required information as any other import. You must also declare an accurate commercial value for the product, as the Canada Border Services Agency (CBSA) does not accept inaccurate valuation.
2) Alcohol and spirits can be more expensive when shipping internationally. Importing alcohol into Canada is subject to high duty and excise tax rates, and the import must be routed through a board, commission, officer, or governmental agency legally authorized to sell intoxicating liquor. If gifting liquor is a must, try contacting a winery or liquor store in the Canadian domestic market to purchase from and ship on your behalf.
3) What is in that gift pack? If purchasing prepackaged gift packs, be aware of what is in it. Certain commodities such as meats, cheeses, fish & plant products require additional certificates, licenses, permits, and often carry high levels of applicable duties, making it extremely difficult to process such small quantities of these commodities contained in these gifts. Our suggestion is to stick to gift packs which are made up of items such as cookies, chocolates, coffee, crackers, oils, candles, etc., and avoid anything made from animal or animal products.
The bottom line is that if your organization is sending gifts cross border, be prepared to treat them like every other export that is moved across international borders.
ONLINE SHOPPING
Many shoppers are choosing to stay away from the crowds, and are turning to online shopping. When shopping, and therefore shipping, internationally, you need to be aware that these goods are still required to clear through Customs.
You will need to be prepared to pay all applicable duties and taxes when the item moves across the border. If the shipment is sent by mail and valued under $60.00 CAD, then there is the potential for the Canadian Border Service Agency (CBSA) to allow the shipment to enter Canada without duties and taxes being paid. If you are purchasing from online auction sites, then you will be almost guaranteed to be responsible for the import charges.
Although it will be a personal, non-commercial entry, in order to process the import you will be required to provide an invoice, including country of origin of the product, currency, and a complete description of the product(s) being shipped.
PERSONAL GIFTS BY MAIL
If you have friends or relatives who live abroad and are mailing you gifts, please ensure that they properly qualify the item as a gift and include a customs declaration.
For an item to qualify as a “gift”, a friend or relative must send it to you personally and include a card or other notice indicating that it is a gift.
- If you receive an imported gift by mail that is worth $60 CAD or less, you will not have to pay duty or tax on it.
- If the gift is worth more than $60 CAD, you will have to pay any applicable duties and taxes on any amount over $60 CAD.
- For example, if a relative sends you a gift worth $200 CAD, you must pay any applicable duty, GST or HST and PST on $140 CAD.
Items that do not qualify for the $60 CAD gift exemption include the following:
- tobacco;
- alcoholic beverages;
- advertising material; and
- items sent by a business.
Please also note that the $60 CAD gift exemption cannot be combined with the $20 CAD exemption that is available on most items valued at $20 CAD or less.
** These guidelines are applicable all year round, and are not specific to the Holiday Season.
Will you be shipping Christmas gifts cross border this year?
Tags: Christmas gifts, importing Christmas gifts
