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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Disclaimer: While reading, kindly note the date of this blog. At PCB we do our due diligence to write on the most relevant topic every week and naturally content may become dated as developments in a certain program/topic occur. For this reason, we greatly appreciate your readership and hope you continue reading with the posting date in mind. For the latest information on this topic please use our website's search function, or better yet, subscribe to our "Trading Post" newsletter to receive these updates directly to your inbox.
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About Author
Cherie Storms
CCS (CA & US), CTCS, CBSA Prof. Designate

Cherie Storms is the Canadian Operations Manager with PCB Customs Brokers, with over 18 years in international trade operations and regulatory experience. Since joining the company in 2007, she has become an Executive Board Member for the Canadian Customs Brokers Society, BC Region, and spoke at the Women in Transportation Annual General Meeting in 2010 regarding her experience running international logistics for the Vancouver 2010 Winter Olympics. Cherie is a member of CSCB's National Commercial Operations and eManifest Committee and sits on the Canadian Society of Customs Brokers' Board of Directors. In 2020, Cherie received the Emerging Leader award in the annual Surrey Board of Trade, Surrey Women in Business Awards. In her off time, Cherie is a motorsports driver for the Shift Up Now racing team, SCCA and CACC Women on Track Leader, racing tracks in Daytona and Indianapolis. With multiple championships, Cherie is a leader in the Jr Ambassador Program, encouraging young girls to excel in motorsports. Cherie has spoken at many seminars on the importance of trade compliance. She is currently enrolled in the British Columbia Institute of Technology (BCIT) Business Management Program to become 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.