Archive for February, 2014

Customs Clearing Gifts and Personal Effects

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Border Bee receives many calls from distressed Canadians looking for an explanation as to why their personal property is being held by Customs. Here are some answers to the most common questions.

Customs 395 in Old Montreal

Customs in Old Montreal

Why are my personal effects being held by Customs?

The unfortunate reality is that many people lie to Customs. All too frequently, goods that were purchased are labelled as ‘gifts’ or ‘personal effects’ to avoid duties and taxes. This is a sore point with Customs. The real cost of this dishonesty may not be the government’s lost revenue but the burden placed on honest Canadians who must prove that their property is not subject to tax or restriction. There is also the possibility that within your personal effects are items restricted in Canada that Customs has a responsibility to prevent from entering the country.

Do I have to go to Customs to clear my effects?

Yes. Alternatively, you may provide a relative with ‘written authority’ to represent you to Customs in order to obtain clearance for your articles. This relative will show the authority when they arrive at the Customs office. It may also be wise to provide them with a copy of your passport or driver’s license.*

What qualifies as ‘personal effects’?

Did you buy the goods? Do you have a receipt? If the answer to these questions is ‘no,’ then you are likely importing personal effects. Personal effects require you to self-clear and report directly to the CBSA, where you will complete this form and answer any additional questions Customs might have about what the personal effects contain.

Personal effects typically take the form of:

  • items bequeathed by a foreign relative
  • personal property used during a period abroad for more than a year
  • property imported by settlers or seasonal residents

Do I have to self-clear my gift?

If it is in fact a gift–meaning that you did not purchase the item and no one purchased it for you–then yes, you must self-clear the item and report directly to the CBSA. The reason for this precaution is that many gifts may have been sent by the shipper in return for a consideration that Customs would consider taxable. The threshold for importing gifts tax-free is $60.

For information on how to self-clear your gifts or personal effects, see here. The process for self-clearing personal effects and purchases are the same and require you to report to the Customs office where your goods are being held.

*If you live very far from the Customs office and do not have a relative who can represent you at the port, you can try your luck by calling the CBSA’s BIS line: 800-461-9999 (inside Canada).

Good Luck!

How to Activate your Business Number for Importing

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If you have a business, regardless of its size, you are likely already registered with the CRA for payroll or income tax. If your business is importing for the first time, you will need to contact the CRA to activate this business number specifically for import/export.

To activate your business number, simply call the CRA hotline at 800-959-5525. You will want to do this before your shipment arrives in Canada to avoid delays or additional bonding charges during the shipment of your merchandise.

What is a business number?

It must start with the numbers ‘8,’ ‘7,’ or ‘1’ and be nine-digits long. It will also be followed by an ‘account identifier’: RC, RT, or RM. It is the same number used to report payroll and income tax to the CRA. Also known as an ‘importer number’ or ‘BN.’

E.g. of a business number: 123456789RM0001

What if I do not have a business number?

Even if you believe you do not have one, it is worth calling the CRA to double-check. In the event that your business is not registered, a BN can be obtained online, by phone (800-959-5525), or by mailing or faxing a completed form RC1 to the nearest tax services center.

If the number is strictly for importing, Border Bee can expedite your registration.

 

 

Is it easier to declare my commercial goods as personal?

No. Per the CBSA: anything for “commercial, occupational, industrial or like use” is considered commercial goods and must be imported under a business number. Not only will the importer reserve cash flow by importing as a business–commercial imports are not subject to PST, QST or the provincial portion of HST–but Customs may not release your shipment until you are registered. Large orders and commercial wares will have a difficult time crossing the border posing as ‘personal’ goods and you may even be subject to a penalty.

In addition to paying provincial tax, personal importers are also subject to additional scrutiny and may be required to provide a receipt or proof of purchase.

 

 

Still confused? Contact us

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Ecommerce, Customs and You provides answers to your questions on importing goods, written by the Border Bee staff.

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