Claiming Duty Free On Canadian Goods Returned In Same Condition

Do Any Of These Scenarios Sound Familiar?

  1. Your Canadian company sells a product to the U.S., and the U.S. company for some reason wants to return the item because the product is the wrong color, or wrong size, too many or simply changed their mind.
  2. Or maybe you are sending items to the U.S. temporarily for loan, demonstration, or promotional purposes.
  3. Yet another scenario might be that you brought paintings from Canada to your new vacation home in Palm Springs. After 5 years you sell your condo in Palm Springs and return to Canada and want to bring the paintings back with you.

In any of the above or other similar scenarios wherein you are importing previously exported goods back into Canada in the same condition, you could qualify for a duty free return.

How To Re-Import Returned Goods Duty Free

  • Proof of export must be on file, and
  • Duty drawback or relief must not have been granted

Documentation Requirements

Businesses are required to substantiate their claim for relief of duty and/or excise taxes by providing documents that prove that the goods in question originated from Canada (for example: Proof of Export). The term "originated from Canada" refers to both domestic products and to previously imported, duty-paid products returning to Canada. GST is also relieved as long as the goods exported, are re-imported by the same party.

The commercial documents must describe the goods in sufficient detail to enable Canada Border Services Agency (CBSA) officers to verify that the goods exported were the same as the goods returning to Canada. The claimant can add to these commercial documents, any other information useful to the officer such as make, model, serial number, reason for export, and nature of the export.

It is highly recommended to note on your customs invoice (for goods returning in the same condition):

'The goods mentioned on this invoice were exported from Canada during the month of _____________ in the year _________, the goods were not advanced in value or improved in condition (e.g. altered, processed or repaired) when they were out of the country, and no refund, drawback or exemption of customs duties and/or taxes has been granted or will be claimed.'

Proof Of Export

Almost any reasonable form of proof is acceptable to the CBSA as evidence. However, it should be noted that failure to present any conclusive proof may result in denial of relief of duties and/or taxes. The description of the goods on the bill of lading or similar document must be the same as on the import invoice. Also, evidence that the goods have not been advanced in value or improved in condition by any process of manufacture or other means, or combined with any other article abroad. An affidavit is not an acceptable proof of export.

A form E15 can be used to prove export or destruction. The CBSA must examine a shipment prior to its export and certify a form E15, Certificate of Destruction/Exportation.

For high-volume exports and returns, please consult with our trade compliance professionals to find an alternate process.

If goods are returning after being stored in a duty deferral program (bonded warehouse or duties relief), they must be either duty-paid or re-entered into duty deferral upon their return.

All records pertaining to the origin, classification and valuation of import entries must be kept on file for 6 years following importation.

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About Author
Cherie Storms
CCS , CTCS, CBSA Professional Designate

Cherie Storms is the Operations Manager with Pacific Customs Brokers, Canada with over 15 years in international trade operations and regulatory experience. Since she joined the company in 2007 she has become an Executive Board Member for the Canadian Customs Brokers Society, BC Region, and was invited to speak at the Women in Transportation Annual General Meeting in 2010 regarding her experience with running the international logistics efforts of the Vancouver 2010 Winter Olympics. Cherie is also a member of CSCB's National Commercial Operations and eManifest Committee. In September of 2018, Cherie became a member of the Board of Directors of the Canadian Society of Customs Brokers. Cherie has spoken at many seminars on the importance of trade compliance and is currently enrolled in the British Columbia Institute of Technology (BCIT) Business Management Program with the goal of becoming an international trade lawyer.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.