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Loading ...Tax Exemption for Mailed Goods
Goods entering Canada through mail may be subject to duties and taxes (GST, HST or PST) depending on the value of the item and whether it is a gift.
You don’t have to pay duties and taxes if your mail order item is:
- a gift worth $60 or less; or
- worth $20 or less.
This exemption applies on a per item basis. Items sent to a Canadian as a gift by another person must include a card or notice indicating it is a gift. Clearly identified gifts worth CDN$60 or less are not subject to duties or taxes; however,gifts greater than CDN$60 are subject to duties and taxes. This CDN$60 exemption does not apply to tobacco, alcohol, advertising material, or items sent by a business or association.
For more details, please check out the RC4051 form.
17 responses so far. Leave a comment
Thanks for this extremely useful website.
I downloaded the entire 7mb 2009 Customs Tariff PDF and looked through chapters 61 and 62 (apparel) prior to finding your site, but I’d still value your opinion.
I was about to order some swimwear and underwear as a gift for my wife from the Victoria’s Secret website, when I noticed they were charging me approximately 26.6% in sales taxes and duties, calculated on the order plus shipping. I live in Ontario and VS ships from the USA.
No single item costs more than $60 (C$ or US$), but instead there are a few items, all gifts for my wife, totalling US$88 before shipping. (US$109 with shipping.) Approximately US$29 of tax/duty was assessed on the order, which as I said, is about 26.6% of $109.
Under the preferential tariff for the US (UST in the 2009 Customs Tariff), much if not all of what I was planning on buying should be duty free (besides GST/PST) – the underwear definitely, not sure about the swimsuit. However, I’m guessing the UST preferential tariff rate applies only to goods manufactured in the US? Is that correct? Probably none of the articles are actually manufactured in the US.
And finally, when it comes to sales taxes, I’ll be billed for both GST and PST, or GST only?
With an overall duty/tax rate of 26.6% it seems that perhaps duty is being applied to some items in the order and not to others. E.g. 31% (=18% duty + 5% GST + 8% PST) on part of the order and a lower rate (maybe just 5% GST + 8% PST) on the rest, or just on the shipping? Actually that calculates about right: 31% on the apparel, 13% on the shipping.
Regards, and thanks for any insight you can offer to this neophyte in the bewildering world of import tariffs,
Graham
[Reply]
BoB
Reply:
September 8th, 2009 at 3:44 pm
Graham,
You must have done extensive research on this. Yes, your’e right. When the cloth are not made in US/Mexico, duty will be applied.
I can see that Chapter 61/62 with the highest duty rate is 18% and different items get different. It’s hard to calculate the total. And there’s no reason assuming that they did it right. I’d think the best way is to request a print out of how the duty/tax is calculated.
Did Victoria’s Secret handle the duty/tax? If it’s the courier, there’d be brokerage fee.
If the total shipment is under $60, you may go back to argue on the ground of gift exemption.
I’d love to hear more if you get to the bottom of this.
[Reply]
John
Reply:
September 28th, 2009 at 2:24 pm
Question: although a software item I am shipping from the US is under $20 CAD, the shipping fee on top makes the total cost in excess of $20. What would the duty be, and would there be additional fees as well?
Thanks,
John
[Reply]
BoB
Reply:
September 28th, 2009 at 2:38 pm
Duty only applies to the value of the goods. GST/PST applies to the goods value and shipping.
There’ll be a brokerage fee for dealing with the duty, etc. varying widely between USPS and couriers. See http://betterdollar.com/mailorder/brokerage-fee/
Bob,
Thanks for your timely reply. So, in other words, I will not face a duty given that I fall below the sub-$20 CAD threshold, but IFF the package is “randomly assessed/processed” via USPS/CP then I face a minimum $5 surcharge plus GST/PST as well?
Thanks again
John
[Reply]
BoB
Reply:
September 28th, 2009 at 3:47 pm
That’s right.
[Reply]
The (randomly) assessed brokerage fees and GST/PST would apply even if the package falls below the sib-$20 threshold?
[Reply]
BoB
Reply:
September 28th, 2009 at 4:34 pm
No. The brokerage fee will only be applied if there’s a charge of duty or GST/PST.
[Reply]
Thanks…another twist: is it also possible to bypass the duty threshold (per my sub-$20 example) but still get assessed for GST/PST, and therefore also the brokerage fee?
[Reply]
BoB
Reply:
September 28th, 2009 at 5:33 pm
Yes, assuming the goods has 0% duty, you’ll still need to pay PST/GST, and then brokerage fee.
[Reply]
Hello,
I ordered a jacket from I think its china maybe Hongkong, It cost 40.00 u.s so 43.00 canadian. Will there be duties on this? or tax?
[Reply]
BoB
Reply:
October 9th, 2009 at 1:13 pm
If it’s marked as gift, it’s duty and tax free. Otherwise, you’ll need to pay both duty and tax.
See http://betterdollar.com/mailorder/tax-exemption-for-mailed-goods/
[Reply]
How do I calculate duties? Is it 18% + taxes?
[Reply]
BoB
Reply:
October 10th, 2009 at 1:22 pm
Yes, tax on the amount after adding duty.
[Reply]
hi,
I was wondering how the per item $60 gift rule applies.
I have a friend in the US, and he’s sending me 3 things, two worth more then $60 (100 each), one less.
If he sends them all in one parcel, what happens?
Do I pay the amount over the $60 for the two items over $60 (i.e. pay duties on the 40+40 extras) and taxes on the $200?
Or can i only have only one $60 exemption in the parcel of three items? If so, it’s better to ship seperatelyto get the most $60 gift exemptions? That = higher shipping costs though.
Also, one item is a softshell jacket from Arc’teryx, which is should be canadian made, would i not have to pay anything on that anyways as it would be covered by NAFTA?
What if the softshell was made in China eventhough Arc’teryx is a BC company?
Thanks a lot for your help!
[Reply]
BoB
Reply:
October 29th, 2009 at 8:37 pm
If all 3 are sent in one parcel, duty and tax are paid on the amount exceeding the $60. If sent individually, each will have the $60 exemption. You have to balance the shipping cost and the tax+duty.
[Reply]
Hi Bob,
I am planning on sending some small gifts (shirts, toys) to family in Canada. Each gift is less than $20 each. However, I’d like to save on postage and send all ten gifts (each one to a different person) in one box, addressed to one person. Would this be a problem for duty exemption?
I would appreciate your feedback. Thank you.
[Reply]