Duty Free Trade For Ecommerce Shipping To and From Canada

Canada's new free trade agreements have made is easier for businesses to take advantage of preferential duty free status for smaller transactions. Many goods of qualifying origin from over 40 countries can be shipped to Canada duty free with greatly simplified origin declarations.

FREE-TRADE-GRAPHIC

Online services versus products

As Jet Worldwide specializes the movement of physical goods this blog will focus on the benefit of cross border import of online orders shipped to Canada. However, it is worth noting that e-commerce services are also a major focus of Canada's recent free trade agreements.

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Disclaimer: The information in Jet Worldwide online content, including this post, is for general information only.


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Shipping Guide For Sending to Canada


FREE TRADE DUTY FREE SHIPPING IMPORT TO CANADA

  • Courier shipments from the USA and Mexico with a value up to CA$150
  • Qualifying origin goods up to CA$3,300 with simplified origin declaration
  • All qualifying origin goods with origin declaration

Canada's Major Free Trade Agreements

In addition to the updating of the new North American free trade agreement (USMCA CUSMA T-MEC), Canada has free trade agreements with most of the world's leading economies. The other leading economies that have free trade access to Canada include:

  • Germany, France, Spain and other European Union countries under CETA
  • Korea (CKFTA), Japan, Malaysia, Australia, New Zealand, Vietnam and other CPTPP economies
  • Switzerland, Norway and other EFTA Countries
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DUTY FREE THRESHOLDS

A benefit of the USMCA/CUSMA/T-MEC is that most parcels shipped courier to Canada with a value under CA$150 can be imported to Canada duty free. This increased low value threshold (often referred to as the de minimis value) is valid for goods shipped via courier from Mexico and the US.

Read more: Benefit from low value duty free thresholds

The low value threshold to Canada for goods shipped other than from the USA and Mexico are subject to a CA$20 low value threshold. 

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Free Trade More Accessible for Canadian Companies and even small shipments

A key element of Canada's newest trade agreements (including CUSMA, CETA and CPTPP) is the access for preferential duty free entry - and other advantages for small companies. Canadian companies who wish to import or export even small orders can more easily benefit from preferential duty free status.
  • Most of Canada's free trade agreements allow for simpler ways to declare - or request- duty free entry. Separate "certificate of origins" can take the form as a certification of origin.” This can be inclusive on existing shipping documents such as the commercial invoice.
  • Canadian e-commerce sellers can ship Canadian origin goods for duty free entry to the world's leading economies.

Jet Worldwide offers direct shipping for online orders from Canada that can take advantage of duty free status via low value thresholds and Canada's free trade agreements.

Useful "How to Ship" Videos


CARM-Vector

The Canadian Customs online portal to streamline processes for Canadian importers. Read more about CBSA Assessment and Revenue Management (CARM)


Qualifying Country of Origin

Goods with manufacture (and otherwise qualifying) in one of the over 30 countries that Canada has a free trade agreement can import duty free.

Read more: Certificate of Origin and why it is necessary

For imports less than $3,300 to Canada, the proof of origin is not necessary at import. The importer must, however, maintain records (for example, commercial invoice and B3).

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Ship From Versus Country of Origin

It is important to point out that the country from where the goods are ship from do not automatically qualify the goods for preferential duty free import. The country of origin refers to the country of manufacture or origin.The rules are laid out in each trade agreement and should be understood prior to shipping. Verify country of origin.


Importing Goods to Canada

Goods importing to Canada with a value over CA$20 are subject to duty and taxes. Consignments with a value under CA$3,300 can be import via Canada's low value system (LVS).

Qualifying origin goods may benefit from preferential duty free entry under on of Canada's free trade agreements.

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Common Canadian Import Fees for Online orders

Common import fees for consignments shipping via air to Canada can include duty (if items do not otherwise qualify for duty free import), tax and carrier disbursement fees.

Useful Information: Canadian Import Fees

Duty Free in Bulk

As volumes grow, some companies transfer processes to single bulk importing to Canada for warehousing and distribution direct within Canada. Foreign companies can set up as a Foreign Importer of Record and benefit from lower import processing costs.

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READ MORE: UNDERSTANDING IMPORT DUTY CALCULATION


Duty Free versus Tax Free

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With lower duty -and duty free entry - the major import cost to consider the value add tax in Canada. For many businesses, this cost may be offset if not for consumption by the final consumer. Online companies are increasingly capturing sales tax at the time of online check out but most do not. Jet works with companies to prepay the import fees. This ensures no charges to the final customer


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