Ecommerce Importing Into Canada
Your How To Guide On Ecommerce Importing Or Exporting From Canada
When importing or exporting commodities sold on an ecommerce platform such as Amazon or ebay, you must know what is involved in the process.
Many parties such as Customs and other Participating Government Agencies have regulations that must be followed.
You have the opportunity to leverage the Non-Resident Importer Program to ease the sale of your goods to international buyers.
- The Non-Resident Importer (NRI) program is a great opportunity for you to act as the Importer of Record (IOR) as a non-resident of Canada. This allows you to act as the importer when selling your products on Canadian ecommerce websites like Amazon.ca and Ebay.ca.
- Duty and tax must be paid upon importation into Canada for all goods valued at $20.00 and greater. If your goods are valued at less than $20.00, they can be imported into Canada under the De Minimis rule without paying duty or tax. Learn more about this rule in our blog Attn Online Shoppers, A De Minimis Increase Means More Duty-Free Importing.
- The rate of duty is determined by the tariff of the commodity being imported, the value of the goods and, the origin of the goods.
- Certain import documentation is required to be presented to the border services officer at the port of entry.
- Your import may be subject to a customs review, inspection or audit prior to, or after the importation. Additional fees may be levied by the Government of Canada for these services.
- You are required to keep your import records for six years following the date of import and can be audited by Customs at any point during this time.
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FAQ: Ecommerce Imports
First, you will need to become a Non-Resident Importer. Becoming a Non-Resident Importer allows you to act as the Importer of Record into Canada while not having an actual physical business presence, like a storefront, in Canada. Being a Non-Resident Importer will make it easier for your customers to purchase your products online through any ecommerce platform like Amazon, Ebay, Etsy and Alibaba.
Have you ever ordered something online and had to pay duties and taxes when the delivery arrived at your doorstep? It is a nuisance as a customer. This issue can be avoided if the business selling the product is a Non-Resident Importer. As a Non-Resident Importer you can include the costs of duties and taxes at the point of purchase so your customer is not surprised by unexpected costs at their doorstep.
As a Non-Resident Importer you will take care of the import through Canada Customs and any applicable Participating Government Agencies (or hire a customs broker who can do so on your behalf), as well as the payment of duties and taxes. You will be in charge of collecting the federal and provincial sales tax from your customers and submitting it to the Government of Canada. If this sounds difficult, you can always contact PCB Customs Brokers for assistance on how it is done, or if you want another set of hands to help handle the import process for you.
To become a Non-Resident Importer you will need to register for doing business in Canada, determine your landed costs, and prepare your shipment for entry into Canada. You can see the steps to becoming a Non-Resident Importer in our Non-Resident Importer Guide.
A second option is to speak with us directly about becoming a Non-Resident Importer. Please feel free to call us directly at 888.538.1566 or fill out the form on this page and our Non-Resident Importer concierge desk will be able to contact you.
With a little help from us you can organize your tax requirements, legal business structure, immigration and transportation moves from all over the world. You have the advantage of using our business volume to secure better shipping rates. You have access to expert Trade Advisors who can review where you are sourcing your raw materials from and they can determine if a preferential tariff treatment could be used to reduce your importing costs associated with duties and tariffs. Contact one of our experienced Trade Advisors today to find out how you can reduce your transportation and material sourcing costs.
In order to determine your product’s selling price in Canada you must first determine the costs associated with shipping and storing them in Canada. This can be a tricky concept, but our latest video will help you learn about the main costs you need to be concerned with when becoming a Non-Resident Importer.
Top costs include but are not limited to:
- Import Duty
Import duty is calculated using three pieces of information you provide on your commercial invoice:
- The HS tariff code of the goods
- The value of the goods
- The country of origin of the goods
If you have these three key components, you can calculate your rate of duty. If you do not have these components, you can only estimate your rate of duty. If you need assistance determining your rate of duty we can help you by verifying your tariff code, determining the correct value of your goods and the accurate country of origin.
When importing into Canada the Canadian Goods and Services Tax (GST) is paid at the border. GST is also charged at the point of sale as an additional 5% charge on the sale of your goods in Canada.
For example, if you are selling shoes in your online store, this is how your tax would be calculated:
GST at the point of sale:
- Price of shoes: $50.00
- GST on sale: $2.50 (You do not keep this, it is remitted to the Canada Revenue Agency)
- Total amount of money collected from buyer: $52.50
GST at the border:
- Customs valuation of goods: $25.00
- GST payable to Customs $1.25
If your buyer decided to return the item they purchased from you, you can apply for a refund on the tax paid at the border from Canada Border Services Agency.
Shipping costs vary depending on the size, weight, distance travelled and mode of transport. Air freight is the fastest mode, but also the most expensive. Whereas ocean and ground freight may take longer, but they are less expensive than air freight.
You need to be aware of two government bodies when importing into Canada:
- Canada Border Services Agency
Also known as Canada Customs is looking for an accurate and complete description of the goods being imported on a properly formatted commercial invoice or equivalent document that contains all of the required information. For a full list of the information required check out our Document Requirements for Canadian Imports Guide. If you are using a Canada Customs Invoice, please use our Canada Customs Invoice Information Guide to make sure you are accurately completing your Canada Customs Invoice.
- Participating Government Agencies
These are other regulatory government agencies who regulate specific goods. A majority of commodities are subject to Participating Government Agency review. For you to determine if your goods are subject to Participating Government Agency review upon importation into Canada, check out our educational guide What Does My Commodity Need?
Before you make an ecommerce sale in a foreign country you should:
- Know if any Participating Government Agency will be involved in reviewing your goods.
- Know what the Participating Government Agency or Agencies will need to review your goods ie. documents, permits, certificates etc.
- Determine what your HS tariff classification, customs valuation and country of origin are so you can calculate your duty and tax costs accurately.
- Calculate how much GST you will need to collect on the sale and later remit to the Canada Revenue Agency.
- Understand any labeling requirements for your goods.
- Obtain quotes for shipping the goods from your distribution site to your buyers in Canada.
- Register your company for doing business in Canada.
- Open an import or non-resident import account.
If your buyer wishes to return the item they purchased there are a few options for you to take, but before determining which options are available to you such as return, resell, destroy or donate, you’ll need to ask yourself a few questions.
Download this seller’s guide to e-commerce returns to determine the best option for your returned item.