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
- 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).
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.