Better Value in Dollar

Designer cloth and apparels are most common among what we Canadian bring back home from abroad. Duty for clothing, apparels and accessories are most complex depending on materials, country of origin and type and style. Hopefully, the following cover some most common items.

• Leather or composition leather cloth made in MFN countries have a duty rate of 13%.  If they are made in Australia or New Zealand, the duty rate is half of theTariff. http://betterdollar.com/duty-rate-for-articles-of-apparel-and-clothing-accessories-of-leather-or-of-composition-leather/
• Sports leather gloves: 15.5%
• Belts: 9.5%
• Other leather accessories: 8%
• Children’s garments and clothing accessories: 17 ~18%
• Women’s and men’s clothing in general: 17 ~18%
• Jerseys, pullovers, cardigans, waistcoats and similar, knitted or crocheted: 18%

• Duty rate for Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories.
• Duty rate for Other articles of plastics and articles of other materials of headings 39.01 to 39.14.
• Preferential Tariffs
• Duty rate for Woven fabrics of artificial filament yarn, including woven fabrics obtained from materials of heading 54.05.
• Duty rate for Weighing not more than 25 g/m^2

The most popular goods often invoke the most questions.

What’s the duty rate for computers, laptops, netbooks, printers (ink-jet printers), printer parts, scanners, photocopiers, hard-disks, monitors, modems, routers, switches?  And what about other gadgets such as cell phones, battery chargers, power supplies and controllers, video games, Digital cameras, TV cameras and video recorders?

The good news is that they are all free from duty.

What about the multi-functional units, such as a HP printer/scanner/copier?

This is covered in category: 8443.31.00 00 – -Machines which perform two or more of the functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network.

Printer, scanner and copier are all free of duty individually. And there’s no duty when they are combined.

• Duty rate for Wigs, false beards, eyebrows and eyelashes, switches and the like, of human or animal hair or of textile materials; articles of human hair not elsewhere specified or included.
• Duty rate for Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders.
• Duty rate for Static converters
• Duty rate for Aluminum electrolytic

Lately I was asked a lot of questions regarding importing large screen Plasma/LCD TVs from the US.

After a brief survey, I wasn’t surprised that there’s a sharp price disparity between the US and Canadian prices. Take the popular Sharp – AQUOS 52″ 1080p Flat-Panel LCD HDTV for example, both BestBuy.com and BestBuy.ca have a special offer, one at US$1299, the other at CA$1,899. 46% price difference.

So it makes all the sense to shop in the US. Or is it?

Now how much duty or tax will you be charged? This may change the equation significantly. Here’s the list of taxes that you’ll have to pay when importing that big screen TV.

• US state tax, depending on which state you purchase the TV. New Hampshire has 0% state tax, whereas Washington taxes 6.5%.
• Duty of 5% (8528.72, covering high-definition, flat-screen, projection, CRT ), if the TV is not made in Mexico or US. One reader reported 7% being labeled as “luxury tax”. I cannot find reference on excise tax.
• GST/PST on top of all above.

If you have stayed outside Canada over 48 hours, you can claim your personal exemption of $400 or $750.

One tip, many good brand TV, e.g. Panasonic 50″ Plasma T.V, are  made in Mexico. You can get away without paying the duty by choose those brands. When you cross the border, choose a senior-looking officers who would be more experienced in dealing with NAFTA and duty issues, and make less mistake in calculating the duty/tax.

Do your math, then you know whether it’s worthwhile.

Update Jan. 6 2010: A reader reported that the duty of an HD display TV is 3.5%,  assuming it’s made outside North America.

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Did you notice that one Canadian Dollar can exchanged for nearly 0.98 US$ in the last few day?

Well some people did.  And the idea of cross border shopping jumped immediately to their mind.

I had two email in the last two days inviting me to two interviews.  One with CBC Winnipeg, and the with The Global and Mail.

Being a self-appointed expert (well I learnt it by mistakes), I gladly accepted both invitations.   In the pre-interview, the CBC Winnipeg producer asked me when I started cross-border shopping.  My answer, “since there was a border.”

The CBC Winnipeg interview was broadcasted live at Oct. 14^th 6:10pm EDT.  I have a recording here, if you’re interested (CBC-Winnipeg-Interview).  And the Global and Mail interview was yesterday, with a promise to publish on next Monday’s paper (Oct. 19^th) or the PDF: How to score a cross-border shopping deal.  Have a good reading, if you grab a copy.  It’s full of tips on cross-border shopping that you can read on this website.

I’m glad that our loonie is close to par again with US dollar, like I predicted in early June. But I didn’t expect it to return so soon.

Let’s put aside the debate of why Canadian prices are so high (be it price gauging or scale of economy). By all means, take advantage of the strong Canadian dollar, and Happy Cross-border shopping.

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Shopping at US online, Pick up at the border: a great cost saving practice.

Thanks to the resource and commodity material boom, Canadian dollar has been on a par value with US dollar for a year now. Many economists predict Canadian dollar will maintain its value for quite a few more years to come. However, Canadians are still suffering from retailers price gauging, paying 10~20% more on most common merchandise. Cross-border shopping is a popular pastime to Canadians who seek better value in dollar.

Apart from price disparities, there are other things which still rip you off in shipping, brokerage fee and even in payment. If you’re laden with those hidden charges, you’re bargain-hurting no more.

One hardly known practice to the Canadian bargain hunters is to purchase goods online and pick up across border. The idea is to purchase online or on eBay and ship to a UPS store or local mail shop near the border. Because about three-quarters of Canada’s population live within 150 km of the United States border, this works really well.

The border UPS store owners are used to this practice. They normally charge around $5 per delivery. They like you to do a prompt pickup but delaying a week or so is acceptable, in which case do call to inform the owner.

When you cross the border, you can let the border guards know that you are going shopping. Don’t forget your passport these days. Before returning, you want to open the package and make sure that all the parts are there and there is nothing extra. At the Canadian border, you declare the goods with value shown and pay the GST/PST and duty if the goods are not made in US/Mexico. Duty for Japanese electronics is normally 6%.

Shopping this way, people reported saving at least 40% buying a boat or a set of 4 winter tires.

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I was asked the question:

Can Canadians claim back the tax they paid on clothing items…etc when cross boarder shopping? If so, how can I claim this?

The answer is “depending on the country and depending on the goods”.

For instance, if you’re cross-border shopping in UK, you can claim back the VAT (Value Added Tax) you paid in UK stores. There’s a HMRC offices handling VAT refund in major UK airports, e.g. Heathrow and Gatwick. You can claim VAT refund by bringing the receipts, your passport and the goods (to prove that you’re taking them out of the country). There is a leaflet you can get from HMRC at the airport.

Most other European countries offer similar VAT refund programs. South Africa also has a similar VAT refund program for tourists. Here’s a more complete list of countries which refund VAT to varying degrees.

Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Spain, Sweden, and the United Kingdom), Canada, Croatia, Czech Republic, Estonia, Hungary, Iceland, Japan, Liechtenstein, Luxembourg, Norway, Slovenia, South Africa, South Korea, Turkey, and Switzerland.

The main idea behind VAT refund is that governments do not charge the tax on exports of goods to other countries. So naturally, you cannot claim back the VAT on goods and services you consumed within the foreign countries, e.g. gas, car rental, meals and hotel etc.. However, VAT refund may apply to some services used by business travelers.

One thing to watch out for in VAT refund is the minimum spend. Most countries specify a minimum amount you must spend in a specific shop or chain store to claim a refund. The minimum amount ranges from US$ 25 in Sweden to US$ 340 in Switzerland.  Because of this rule, mos tof my spending are not qualified for VAT refund.

Sadly, Uncle Sam does not offer any VAT or sales tax refund. Each state in US charges their own rate of sales tax. The tax is not refundable when you leave the country.

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I’ve been amazed by how FedEx Trade Networks (and other couriers) could charge a hefty brokerage fee for very little service and get away by doing so like an unalienable right.

Well, Mr. Matt Blackman of North Vancouver, British Columbia decided to stand up and filed a class action against Fedex Trade Networks and Fedex Ground Package System. According to the statement of claims (No. S066949 dated 01/23/07) in the Supreme Court of BC, Mr. Matt Blackman ordered automotive accessories from Santa Monica, CA, which were delivered to his home by Fedex.

Subsequent to delivery and by a letter dated June 16, 2006, Fedex demanded payment from the Plaintiff of the following Improper Charges:
(a) Brokerage fee: $27.00
(b) GST calculated on brokerage fee: $1.89
(c) Disbursement fee: $5.75
(d) GST calculated on disbursement fee: $0.40
(e) Total Improper Charges: $35.04

… The Disbursement fee of $5.75 amounts to interest charged by Fedex on the funds advanced for the payment of GST and PST calculated on the value of the goods shipped and represents a “criminal rate” of interest as set out in s.347 (2) of the Criminal Code in that it substantially exceeds 60% which is the maximum annual rate of interest allowed to be charged on credit advanced.

All BC residents being charged by Fedex for disbursement fees can be part of the class action. You can read the court filing here.

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Over 8 month back when “Better Value in Dollar” site was being built, I thought we Canadian will soon get the good prices of Americans. Sadly, this is not true, after a strong show of Canadian economy and the Lonnie.

Douglas Porter, deputy chief economist at Bank of Montreal, published another survey result of 19 essential daily products (coffee, doughnuts, books, and handbags, etc.) yesterday. Canadians are still paying 18% more than US counterparts, before taxes are calculated. This gap is better than a year ago at 24%. Your dollar has better value south of the border.

We have found a different way to get a good bargain. You can mail order (usually cheaper than regular store price) and deliver to the border for pick up. Read our article here.

BTW, though Americans are screaming for high gas price, they are only paying a national average of US$1.07/liter (US$4.05/gallon), comparing with Canadian national average of CA$1.31/liter). Well, fellow Canadians, it may be worthwhile shopping for gas across the border.

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