The trade deal between Europe and Canada (CETA) explained
With the Comprehensive Economic and Trade Agreement (CETA) now in force, many smaller companies are surprised to learn they can now ship their goods for import to the EU duty free. Canadian companies can now send qualifying goods duty free with simple ways to request preferential duty free import to the EU.
The key benefit of CETA is the virtual elimination of tariffs between Canada and the European Union. The deal’s supporters expect it to create additional GDP growth through cuts in tariffs in key economic sectors that include agriculture, auto and pharmaceutical industry.
Disclaimer: The information in this blog is for general information only and is not intended to, constitute legal and/or tax advice. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities. All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is”; no representations are made that the content is error-free.
Build your ecommerce sales to Europe by shipping direct
See below our PDF presentation for shipping your ecommerce online orders direct from Canada and US to Europe. Contact our team for details on building your direct import solutions for best in class access to Europe.
Contact our team for information on shipping direct and assistance with IOSS registration via Jet.
Can Online Orders Shipped to Europe from Canada Benefit from CETA?
CETA provisions make is it easier to declare goods as Canadian origin via a certification of origin (versus a separate certificate of origin). It is important to keep in mind that simply shipping from Canada does not, in itself, qualify the goods for preferential duty free import.
Ship from ≠ country of origin: The country of origin in most trade agreements refers to where the goods were made, raised or grown. For example: If a Canadian seller sold goods that were made in China to a buyer in France, the country of origin for CETA purposes would be China.
For goods that are of Canadian origin, CETA offers a great benefit for shipments to Europe and the UK (the UK and Canada have a new agreement (UKTCA) that essentially replicates CETA.
Duty Free but with VAT for online orders to Europe
With CETA and duty free low value thresholds, the challenge for e-commerce shipments / online orders to Europe and UK (see mention above) is the payment of value added tax, VAT. The VAT to Europe averages around 20% and now must be prepaid. This is explained below and also in our blogs dedicated to the subject of prepayment of VAT for online orders to the UK and EU.
VAT Rules for Imports to the European Union from Canada
It is important to note that IOSS is not mandatory. For Canadian companies shipping direct to a European country such, such as France, it probably best to set up payment direct upon import and avoid having to register fo IOSS.
All ecommerce orders imported to the EU are subject to VAT. E-commerce shipments valued under EUR 150 can be imported via One-Stop Shop (IOSS) processes that allow sellers and online marketplaces to charge VAT at the point of sale and remit it directly to the authorities.
For details on IOSS and the otherEU’s VAT rules, visit: Publications Office of the European Union.
Under the CETA provisions, qualifying goods can be declared on the commercial invoice - greatly simplifying the ability for Canadian companies to offer lower costs to European markets.
Jet Worldwide provides low cost shipping to France, Germany, Spain from Canada as well as well as distribution within the EU.
UPDATE Free Trade Between Canada and the UK: From CETA to UKTCA
Canada and the UK have an agreement to continue the preferential duty-free status enjoyed under the CETA via the UK-Canada Trade Continuity Agreement (TCA).
Learn more about Jet Worldwide
What is the impact beyond tariff reductions?
- Canadian and European shared recognition of professional accreditation for architects, accountants and engineers,
- Ease citizenship or residency requirements including simplified transfer for inter-company staff and other professionals between the EU and Canada.
- Ownership and investment restrictions
- Clarified regulations between Canada and the EU on intellectual property rights
- European and Canadian companies gain the right to bid on Canadian and European municipal contracts respectively (see section below on inter-provincial trade)
- Greater flexibility regarding 'rules of origin' regarding automobiles and auto parts
Contact our Euro-Canadian Team for information on shipping parcels and online orders direct to France, Germany, Italy and all European Union Countries.
Duty Free - But with VAT- Growth of Online Orders
As mentioned above, orders online orders shipped to Europe Union countries valued under €150 (around CA$220) can be imported duty free but VAT will be assessed. This includes items sold on eBay, Shopify, bigcommerce, and other e-commerce platforms. See section above on IOSS and VAT payment or.... Read our blog on payment of VAT for online orders shipped to Europe.
Expected benefit to GDP growth in Canada and EU
As noted above, in an era that tariffs have already trended down to low levels, estimates of the expected benefit to GDP range have been modest: The growth in Canada's GDP from full implementation of CETA range from as low as 0.3% to more than 0.5%.
The provincial governments of Canada are actively working together to ensure out of province Canadian businesses will have access to provincial public markets that are at least as favourable as those granted to European companies in CETA.
Companies are diverting their logistics from the UK to the European continent. Contact our team to get information on EU based import, warehousing and distribution.
Delivery between the EU and Canada via Jet Worldwide
- Jet Worldwide: A trusted brand offering international shipping for over 35 years!
- Jet Worldwide offers options for shipping between EU countries and Canada for parcels, pallets, and Euro domestic distribution for online orders (with Shopify integration)
- Jet Worldwide offers transparency and logistics support. We are not shy to recommend alternative options that are better suited for your needs.
For a quote for shipping online orders, provide details including shipping volume, item(s) being shipped, average value and weight of each parcel. The more details the better :).
Proof of origin requirements under Canada's Free Trade Agreements
The value for duty amount for all of Canada's free trade agreements (including CETA) for which the proof of origin / certificate of origin is waived was changed to $3,300 CAD in July 2020. This change was made to harmonize the regulations with the new NAFTA/ CUSMA.
For imports not exceeding $3,300 to Canada, the requirement for proof of origin is waived. The requirement on the importer to maintain records (for example, commercial invoice and B3) applies even if the CBSA does not require a certification of origin or if a requirement for a certification of origin has been waived.
Disclaimer: The information in this blog is for general information only. Producers, shippers, exporters, importers should confirm their processes with their customs brokers, carriers and regulating authorities.
Duty Free eligibility under the CETA
Country origin rules are associated with factors used to determine if the product is eligible for preferential duty free treatment under the CETA.
As mentioned above, the CETA rules don’t require a formal certificate in order to obtain tariff benefits. A declaration on the invoice or any other commercial document accompanying the shipment is enough.
The CETA country of origin declaration has a specific wording, which is fairly straight forward (check with up to date regulations before shipping).
Canada and EU: Incredible Opportunity
The benefits of the Canadian European free trade pact are being realized as more Canadian companies can offer competitive products and services to European customers. Canadian companies can more easily take advantage of duty free clearance from an EU Country.
Shipping Canadian Shopify Orders to the EU
Jet Worldwide is building international shipping solutions for Shopify, Canada's leading e-commerce platform. Building on Jet Worldwide’s decades of Canadian cross-border parcel shipping experience, our team is currently developing Shopify-integrated solutions for shipping to the entire European Union, allowing businesses to “self-fulfill” their orders. See section above regarding payment of VAT for ecommerce imports to Europe.
For updates on the latest international shipping solutions for Canadian online orders, connect with Jet Worldwide’s e-commerce team.
Get a Quote for Shipping to Europe from Canada
Jet Worldwide makes it easy for companies seeking shipping quotes and logistics support for shipping between the European Union and Canada.
The information required for a quote includes:
- Your company name and contact details
- Ship from Address
- Ship To Address
- Weight and dimensions of each piece
- Item(s) being sent
Learn more from Jet's Logistics Experts: About Jet Worldwide
Reminder: The information in this blog is for general information only and provided “as is”; no representations are made that the content is error-free. It is important to confirm compliance with your carrier and regulators prior to shipping.