Bad News – Canadian Import Tax Are Unavoidable

Good News – we can help you recover some of what you paid on Canadian import tax.

GST, or Goods and Services Tax, represents Canada’s value-added tax (VAT) system. The government applies it to most goods and services in the country. If you are a non-Canadian business owner conducting business in Canada, it’s important to understand how GST and PST work.

The Canadian federal government administers GST and levies it at a rate of 5% on the final sale price of most goods and services. However, some of Canada’s provinces also have their own sales tax, called the Provincial Sales Tax (PST) or the Harmonized Sales Tax (HST). The HST combines the GST and PST into a single tax, and its rate varies by province.

Confused yet? We understand and feel your pain.

If your business registers for GST, you must charge GST and PST on the goods and services you sell to Canadian customers by adding the applicable GST rate (usually 5% or the HST rate) to the total sale price. Your business must report and remit the GST amount collected from customers to the Canada Revenue Agency (CRA) regularly.

Upon import, most goods entering Canada for commercial purposes are charged a minimum of 5% GST tax on the declared value. Canadian customs tax is also applied to duties and brokerage fees. Taxes apply to any supplies or inventory purchased in Canada too. Sometimes, harmonized sales tax is even charged on your seller fees!

But here’s the part that should put a smile on your face and a few bucks back in your bank account: Canadian Sales tax expenses are recoverable.