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--> CUSTOMS: Everything You Didn't Want to Know

Postby Subpacket » Fri Nov 18, 2005 12:57 pm

Importing of goods into Canada.

When importing goods into Canada, Canada Border Services Agency (CBSA) must be notified that there are goods coming into Canada. Rules have been established since the founding of Canada to protect Canadian businesses, and its economy, which impose Duties on the goods that are imported.

Through various trade relations (see Tariff Treatment) Canada has entered into agreements with certain countries to lower, or eliminate the Duty from imported and exported goods, that are manufactured in the participating Countries.

Let?s see some real world examples.

I purchase a fully working game from the US, and it ships up via Yellow Freight. I get a call from them letting me know that it has to clear through customs.

Yellow freight, once they have hit the border handed over a manifest of the goods that they are bringing into Canada, and who they are consigned to. This begins CBSA?s tracing and tracking.

The goods move (in bond) to a Yellow freight terminal (say London) awaiting for the consignee to be contacted, and to be cleared.

You drive over to yellow freight, and get a copy of the Manifest, and bring a copy of your Invoice for the cabinet to Customs.

Customs calculates out the Duty (if applicable) and Taxes (GST, PST).

You pay them, they send an electronic message to Yellow freight, Yellow freight releases the goods, and you go home and are happy.

? Customs will help you every time if you are importing personal goods.
? Customs will help you once if you are importing commercial goods. After that, you either need a broker, or you need to generate the paperwork yourself.

I purchase a module for my Jukebox machine. They agree to ship it UPS to my door.
UPS tracks the package as soon as they pick it up, and notify you to let them know who your broker is.

Since UPS shipments clear at about 50 different crossings between Canada and the US, you *could* clear it yourself, but you would have to have the ability to get to the port where it is clearing, and get a manifest, take it to customs, etc. Not a problem if you live in Windsor, or Hamilton.. but what if it clears in North Portal, Sask?

UPS will clear it on your behalf. If you have *ever* cleared a shipment with UPS, they have your signature on file, authorizing them to clear your goods for every UPS shipment.

UPS charges for this service.

UPS will clear your package, assign Duty/Tax/Gst and pay it to CBSA on your behalf, and then slap a COD tag on your package, and collect it when they deliver it.

DHL, AirMail, and Purolator all work the same way; they usually bill you after the fact though. That is nice, because sometimes they mis-declare goods. I once got sent a teddy bear from the UK (rare) and they cleared it as lingerie. It was listed on the export docs as a ?teddy?.

Air Freight ? it?s a different ballgame.
I shipped a pinball machine from the UK. The airlines have arrangements with warehouses that are authorized to receive freight from airlines while under customs supervision. Since you are not authorized to go on the tarmac and get your freight, you have to pick it up from one of these warehouses.

The warehouse will cut the manifest for the goods. You will be notified that there is freight for you, and you can pick up the manifest at the warehouse, take it over to customs, and the process is the same for all the other shipments.

The catch is.. You have to pay the warehouse a fee for using their warehouse. ($50 - $150). You can?t get around it. And its usually in US Funds. And if you don?t clear the goods in 24 hours, they charge you storage. Fair is fair, you are taking up room in their warehouse, that they can use to make money. This is where a Freight Forwarder comes in. They arrange (for a fee) to have the freight taken to the warehouse, all the paperwork handled, and then the goods reshipped to your door? for a fee.

Ocean Freight ? More Fees.
If you can ever help it.. NEVER EVER EVER ship ocean freight. Since goods are containerized, and customs has a bill back procedure in place for checking ocean freight, it?s like playing Russian roulette.

Customs is now charging the importer, the costs associated with inspecting a container. 1 out of every 1000 or so containers gets inspected. Considering that it costs $1,000- $2,500 to inspect a container, this amount gets billed back to the importer. You can?t fight it. You just have to accept that as normal cost of doing business.
In addition to this possible charge, terminal fees are about $250 US funds. Then you get your manifest, and so on. But you cannot pick up the freight from the dock, you need to arrange with an approved carrier, who can go in and pick up the freight (you guessed it.. for a fee).

This isn?t to deter you from Shipping internationally at all. Just to educate a bit on what to expect.

---
Classifying the goods.

When you go to clear your goods through customs, they will assign the goods an HS number. The HS number is an international system of classifying goods.

Every item in the world can be classified by a 10 digit number. That Book is available at
http://www.cbsa-asfc.gc.ca/general/publ ... nts-e.html

The Harmonized System is divided into Sections, then Chapters, then Headings, then Subheadings.
Eg:

Pinball Machine. 9504.30.00.19
Is broken down into
95 ? TOYS, GAMES AND SPORTS REQUISITES; PARTS AND ACCESSORIES THEREOF
9504 - Articles for funfair, table or parlour games, including pintables, billiards, special tables for casino games and automatic bowling alley equipment.

9504.30.00 -Other games, operated by coins, banknotes (paper currency), discs or other similar articles, other than bowling alley equipmen


- - - - -Games:
11 - - - - - -Video
19 - - - - - -Other
90 - - - - -Parts and accessories

So a pinball machine is
9504.30.00.19

(and if you look closely, you can see that an arcade cabinet would be
9504.30.00.11)

---
Now that you know what the goods are, the HS book also shows us the amount of Duty that is payable. (In this case, it?s duty free). That Duty is based on the Tariff Treatment, or our relation with the country in which it was made.

Items that are MADE IN THE USA, and can be proved, are Duty Free (that whole NAFTA thing).

With personal shipments, a lot of the time customs doesn?t care where it was made, just where it came from. So if you have a PCB made in China, but it shipped from the US, they don?t care as its too much effort to go into the computer and change the Tariff Treatment from 10 (US) to 2 (China).
So, knowing that this pinball machine is duty free, lets see how everything gets calculated out.

Value of Pinball Machine - $1000 USD
Exchange rate at time of shipment ? 1.1725
(The exchange rate is not based on Bank rate, or Visa rate. I don?t think anyone really knows how it gets figured out, but it is always posted at Customs, or online)

Value For Duty $1172.50
(this is the value, of the goods, converted over to Canadian funds)

Duty 0%

Value for Tax (VFD + All Duties) $1172.50
GST (7%) $82.05
PST (8%) 93.80
Total Payable: $175.88

---
There are some conditions that customs puts on for low value goods.

Goods that are under $20 CANADIAN (not US, or EUR, but CANADIAN) where Canadian is defined as the price you paid, times the exchange rate applicable on that date, are allowed in the country Duty free, Tax (PST/GST) exempt.

So if you were to buy a pinball project machine, for $18 USD, it would NOT qualify. But if you bought it for $10 US (X 1.1725 = 17.25 CDN) it would be allowed in Duty Free, and Tax Exempt.

This is why sometimes your UPS shipments don?t have any COD tag on them to collect for duty and taxes, because there is none.

The other catch is Gifts.. Gifts are allowed to a maximum of $60 Canadian. If you receive a gift from someone, customs will deduct $60 off the price of the goods.

9816.00.00.00 - Gifts

So your KI2 for $75 (Canadian) that was a ?gift?, will be assessed duty/ taxes on $15.00 (Canadian)

Does this mean you should undervalue goods, and have that NOS tron cabinet declared at $15.50 to have it come in duty free and tax exempt?

- - -

AMPS ? Applied Monetary Penalty System

Customs has a new zero tolerance policy. Misdeclaring goods imposes a penalty of $1000 for the first offence, $5000 for second, $25,000 for the third. (for commercial), personal, they will assign you a fine, plus double duty and taxes, plus black list you everytime you come over the border you will get pulled over.

This is just the basics of international shipping, and customs. Many more requirements (and this is subject to change as I get around to it)

In a nut shell?

Under $20 ? Duty Free, Tax Exempt.
Items from the US are typically free for non commercial.
GST and PST is paid for non commercial goods.
Under $60 - can be a ?gift?, and be duty free, tax exempt
Don?t piss off Ocean Warehouses, or freight forwarders.

Common HS Numbers

Pinball Machine. 9504.30.00.19
Video Game : 9504.30.00.11
Gifts: 9816.00.00.00

Parts is a whole other topic. When is a Screw, not a Screw? You can?t say that a screw for your pinball machine is a pinball part. A part is something that is specific to the item, so a flipper assembly would be. But a screw for that flipper assembly is still a screw.

If you have any questions, feel free to PM me.

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Pete
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Postby Pete » Fri Nov 18, 2005 1:05 pm

AWESOME INFO. this should be stickied, but i believe a coin-op guides and tutorials section would be a better idea.

Actually i belive the coin-op section should be split into several sub-sections.

classifieds, arcade games, pinballs, guides & how to's.

This forum is getting sloppy (no offence to the mods) and finding info is getting tedious.

Just my $0.02

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Gift exemption

Postby ericball » Sat Nov 19, 2005 8:37 pm

Just a quick clarification of the gift exemption, from http://www.cbsa-asfc.gc.ca/eservices/bis/bis41-e.html

For an item to qualify as a gift another person must send it to you personally and include a card or other notice indicating it is a gift. If you receive an imported gift by mail, and it is worth $60 or less, you don't have to pay duty or tax. If the gift is worth more than $60, you have to pay duty and tax on the amount over $60. For example, if a relative sends you a gift worth CAN$200 , you have to pay duty and any GST or HST and PST that apply on $140.

The $60 gift exemption does not apply to goods such as tobacco, alcoholic beverages, advertising material, and items that are sent from a business, company, or association.

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Postby jonathonwillie » Thu Aug 28, 2008 8:20 pm

wow I went to college for Customs and immigration and you summed up my second year in 1 post paragraph :)

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Postby b1buwg97 » Thu Aug 28, 2008 9:55 pm

Thats why we love him

Oh and he is a good dancer too

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Postby Subpacket » Sun Apr 12, 2009 10:46 pm

*** Harmonized Tax ***

Means nothing, you will still have to pay the (gst) + (pst) which will now be combined...

Just that, with services of a broker, that were previously GST only, you will have to pay the PST on. Services of a trucking firm which were gst zero rated (international shipping) I have no idea yet, but will update this post.
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Postby coreline » Tue Jun 08, 2010 1:16 pm

Is this still valid until today? I am going to send gift to my friends in Toronto.

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Postby ocean-freight » Sun Jan 30, 2011 7:58 pm

"Ocean Freight ? More Fees.
If you can ever help it.. NEVER EVER EVER ship ocean freight. Since goods are containerized, and customs has a bill back procedure in place for checking ocean freight, it?s like playing Russian roulette.

Customs is now charging the importer, the costs associated with inspecting a container. 1 out of every 1000 or so containers gets inspected. Considering that it costs $1,000- $2,500 to inspect a container, this amount gets billed back to the importer. You can?t fight it. You just have to accept that as normal cost of doing business.
In addition to this possible charge, terminal fees are about $250 US funds. Then you get your manifest, and so on. But you cannot pick up the freight from the dock, you need to arrange with an approved carrier, who can go in and pick up the freight (you guessed it.. for a fee).

This isn?t to deter you from Shipping internationally at all. Just to educate a bit on what to expect. "


Well, I'd say you're a bit right but not completely :) If ever you don't trust your ocean freight carriers, you may wanna visit this site OceanAudit.net.

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Postby 5-11under » Wed Nov 30, 2011 3:34 pm

I just registered (not really necessary, but should simplify things) with CBIUSA.com, and added their address to my eBay account.

I just bought something from eBay via PayPal, and so far so good (just select another address when it's time to pay). Might have troubles if someone won't ship to a confirmed address, or an address different than a billing address.

Cost is about $6 to pick up from Niagara Falls, NY. A bit tedious, but will save money, and opens up a lot of items from eBay.com from sellers who won't ship to Canada. My shipping charge just went from $40 down to $4 (plus $6 fee plus $10 gas for me to pick up).

When I get stopped on the way back, I'll make sure I have receipts, and hopefully not get too much extra charges, if any.

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Postby BeepBoop » Tue Jan 03, 2012 2:20 pm

Sorry for the somewhat late response, but I happened to stumble upon this thread via the awesome StumbleUpon.

Anyway, I'm glad to have found a thread such as this. I'm extremely naive when it comes to importing goods into Canada. As someone who's seriously considering moving into Canada to open up a wholesale business, I'm wanting if it'll be feasible to accept foreign products into my inventory from other countries. I've never initiated such transactions before. I've only ever processed them in the past. What sorts of movers out there can do long distance deliveries or transports?

Well, I think that's about all I have to say. Thanks for allowing me to chime in. :)
Brooke

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Postby Hammerhead » Sun Apr 15, 2012 11:07 pm

So how much of this is still applicable if you go to say PATZ or Allentown, pick up a game and try to bring it back? I know many of you already do it so I'd be interested in your experiences crossing the border.
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Postby Subpacket » Mon Apr 16, 2012 11:14 pm

Get a receipt. If you are going to fake a receipt, at least try hard and make it believable.

You're on the hook for HST.

Of the many times we've crossed the border with games, I can count on my 1 hand thenumber of times I've actually paid.

Just prepare to pay the HST when you come back over, and its no hassle at all.
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Postby therealmogwai » Tue Apr 17, 2012 2:02 pm

what about crossing the boarder yourself to pick up a game? Im considering grabbing a game from the states off of a guy...
should i get a receipt or should i just say its a gift?
what should i be expecting?

any suggestions

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Postby leonk » Tue Apr 17, 2012 10:04 pm

holy crap ... talk about the tax man taking a bite out of business!!

No wonder candy cabs imported into Canada are so expensive! A machine that can be had for the cost of a 24 pack of beer in Japan, sells for 700$+ in Canada!!

And the fee for inspecting containers (1000$+) how fair is that? Imagine if coming back into Canada from the US, if your car gets randomly selected for an inspection, you have to pay a 150$ inspection fee! Don't we pay enough in custom/HST fees to get these inspectors employed? Why the extra unfair fee?

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Postby RayB » Tue Apr 17, 2012 10:13 pm

leonk wrote:holy crap ... talk about the tax man taking a bite out of business!!

No wonder candy cabs imported into Canada are so expensive! A machine that can be had for the cost of a 24 pack of beer in Japan, sells for 700$+ in Canada!!

And the fee for inspecting containers (1000$+) how fair is that? Imagine if coming back into Canada from the US, if your car gets randomly selected for an inspection, you have to pay a 150$ inspection fee! Don't we pay enough in custom/HST fees to get these inspectors employed? Why the extra unfair fee?

Do you know how large an overseas shipping container is?
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