With the arrival of Harmonized Service Tax (HST), a number of goods and services have been affected. Customs Brokerage fees are one of those services that importers will now have to pay the greater tax of HST rather than GST (in most cases). Whether or not you pay the HST is based on the rules of supply and if you are importing commercial or personal goods. The Canada Revenue Agency (CRA) Bulletin B-103 on the rule of supply is a good source. It is recommended all importers with questions take a few moments to review here.
A basic breakdown of whether or not you pay GST or HST is below:
GST/HST On Customs Brokerage Charges
Non-Commercial Imports
GST/HST on Brokerage charges will be the same rate as the Customs GST/HST rate (the rate imposed by the recipient resident's province).
Commercial Imports
GST/HST On Brokerage Charges Applies As Follows
Non-Resident Importers (NRI) will continue to be zero rated if not registered for GST/HST
Resident Importers are subject to the GST/HST rate in the province of entry (where actual Customs clearance takes place).
Refunds/drawbacks/consulting fees are subject to place of supply rules, meaning GST or HST rate is charged based on recipient?s province.
GST/HST On Imported Goods
Non-commercial (casual) goods - GST/PST/HST applies to imported goods at the rate imposed by the recipient resident?s province.
Commercial goods- only subject to the GST at time of import. HST and/or PST are not applicable to the commercial goods.
If you have questions feel free to contact our Client Services Team at 888.538.1566.
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.
Taryn Hannah has been in the trade industry since 2005. She began her career with PCB in release operations, working with all modes and all release types. In 2010 Taryn moved to the Trade Compliance Group where after a year she became the Supervisor for regulatory compliance in Canada. With the experience she gained working in many areas of import service, Taryn is the perfect fit as our Canadian Operations Manager.
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.
