GST/HST on imports and exports

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GST/HST rules for imports, exports, and drop-shipments
GST/HST relief programs
Non-residents and GST/HST registration
Related links


GST/HST rules for imports, exports, and drop-shipments

If you import or export goods or services, you may have to collect or pay the GST/HST. How this tax is applied depends on the specific goods or service, whether you are a resident or non-resident of Canada, the province you reside in, and whether you are registered for the GST/HST.

For more information, select the situation that applies to you:

Imports

Specific GST/HST rules apply to imports of goods, services, and intangible personal property. There are additional import rules for certain financial institutions as discussed in Technical Information Bulletin B-095, The Self-assessment Provisions of Section 218.01 and Subsection 218.1(1.2) for Financial Institutions (Import Rules).

For more information about which goods, services, or intangible personal property are subject to the GST/HST, as well as the rates, see How place of supply affects GST/HST rates.

For more information, select the situation that applies to you:

GST/HST and imported goods

In this section:

Overview of imported goods

Goods you import into Canada are subject to the GST or the federal part of the HST, except for items specified as non-taxable importations. The GST or the federal part of the HST is calculated on the Canadian dollar value of the goods, including duty and excise tax. It is collected at the time of importation at the same time as the duty and excise tax. For information on the provincial part of the HST on goods you import, see Importing goods into a participating province.

The owner or importer of record is responsible for paying the GST/HST on imported goods. If you are registered for the GST/HST and you are the importer (the person who caused the goods to be imported into Canada), you can claim an input tax credit (ITC) for the tax you paid on the imported goods, as long as you meet the requirement for claiming ITCs. For more information on ITCs, see Input tax credits.

Non-taxable imports

The GST/HST does not apply to items specified as non-taxable importations.

Examples of non-taxable importations
  • certain zero-rated goods (goods that are specifically taxed at 0% in Canada, such as prescription drugs)
  • medals, trophies and other prizes won outside Canada in competition (but not saleable goods, such as an automobile)
  • tourist literature imported by governments or specified organizations for public distribution free of charge
  • goods that were imported by a charity or public institution and that were donated to the charity or institution
  • goods imported for the sole purpose of maintenance, overhaul, or repairs, but only if the ownership  or person using these goods does not change while in Canada and the goods are exported as soon as the services are completed
  • goods that are imported by manufacturing service companies, processed for non-residents and then exported without being used in Canada:
    • any parts to be used in or attached to the goods, as well as materials directly used in the processing of those goods, are also non-taxable
    • the manufacturing service company must apply in writing for an import certificate to be able to import goods on a non-taxable basis
  • warranty replacement property and replacement parts supplied by a non-resident at no charge except for shipping and handling
  • goods valued at $20 or less sent to a person by mail or courier at an address in Canada, except for the following prescribed goods:
    • excisable goods (such as beer, tobacco, and wine)
    • books, newspapers, magazines, periodicals and similar publications if the vendor was required to register for the GST/HST but did not do so
    • goods bought from a retailer in Canada and mailed or transported from outside Canada directly to the purchaser
Importing goods into a participating province

When a resident of a participating province imports a non-commercial good, in addition to the federal part of the HST, in most cases, the provincial part of the HST applies at the border, regardless of the point of entry into Canada or customs clearance.

Exceptions are motor vehicles that must be registered in a participating province and mobile homes or floating homes that an individual used or occupied in Canada.

Recovering the provincial part of the HST

You may be eligible to recover the provincial part of the HST on goods you imported for use in a non-participating province or a participating province with a lower HST rate. For more information, see Reason code 12 – Goods imported at a place in a non-participating province, or imported at a place in a participating province with a lower HST rate (section 261.2) and Guide RC4033, General Application for GST/HST Rebates. Legislative references are to the Excise Tax Act, unless otherwise stated.

Although the provincial part of the HST is not payable when you import commercial goods that are destined for a participating province, the goods may be subject to self-assessment of the provincial part of the HST. Generally, the value on which tax is required to be self-assessed is the lesser of the amount paid for the good and the fair-market value of the property. For more information regarding self-assessment requirements and exceptions, see GST/HST Notice 266, Draft GST/HST Technical Information Bulletin, Harmonized Sales Tax – Self-assessment of the provincial part of the HST in respect of property and services brought into a participating province.

Self-assessing the provincial part of the HST

If you are registered for the GST/HST, the provincial part of the HST is payable by you when a commercial good is imported into a participating province. Enter this amount on line 405 of your GST/HST return. You may be eligible to claim an ITC for the tax you self-assess on the goods, depending on the percentage of use in your commercial activities. For more information on ITCs, see Input tax credits.

If you are not registered for the GST/HST and have to self-assess the provincial part of the HST, use Form GST489, Return for Self-assessment of the Provincial Part of Harmonized Sales Tax (HST)

GST/HST and imported services and intangible personal property

If you buy services (such as architectural services for a building in Canada) or intangible personal property (IPP) (such as the right to use a patent in Canada) from an unregistered non-resident person outside Canada, you have to self-assess the GST or the federal part of the HST if you bought them for use less than 90% in your commercial activities (100% in the case of a financial institution).

If you are a resident of a participating province and buy services or IPP in the above circumstances, you may also have to self-assess the provincial part of the HST if you bought them for use of at least 10% in the participating provinces. Tax is computed at the rate for the provincial part of the HST for each particular participating province on the amount paid, to the extent it is for use in that province.

If you do not use the imported services or IPP at least 90% in your commercial activities, you have to report the GST or the federal part of the HST on line 405 of your GST/HST return and remit the tax to the CRA.

You should calculate the tax based on the amount you were charged for the service or IPP in Canadian dollars. The tax is due in the same reporting period that the service or IPP was paid for or became payable.

If you are not registered for the GST/HST, you still have to pay tax on imported services or IPP. To remit the tax, use Form GST59, GST/HST Return for Imported Taxable Supplies, Qualifying Consideration, and Internal and External Changes. The tax is due by the end of the month after the calendar month that the service or IPP was paid for or became payable.

 

GST/HST relief programs

You may be eligible for GST/HST relief on certain imports and domestic purchases under the Export Distribution Centre Program and the Exporters of Processing Services Program.

Export Distribution Centre Program

The Export Distribution Centre Program (EDCP) permits eligible export-oriented businesses that do not manufacture or produce goods and that add limited value to goods during their processing or distribution activities to use an EDCP certificate to acquire or import the following items without having to pay the GST/HST:

  • most inventory
  • property to be added to other goods in the course of processing
  • customers' goods on which processing services are provided

For more information, see GST/HST Technical Information Bulletin B-088, Export Distribution Centre Program.

EDCP eligibility

You can participate in the EDCP if all of the following apply:

  • You are a GST/HST registrant
  • You are engaged exclusively (90% or more) in commercial activities
  • It can reasonably be expected that during the fiscal year when the authorization is in effect, you will meet all of the following criteria:
    • Your export revenue percentage will be 90% or more
    • You will not engage in substantial alteration of property
    • The value you add to your customers' goods from providing non-basic services will be 10% or less, or the total value you add to your customers' goods will be 20% or less

How to apply for authorization

If you are eligible, you can apply for EDCP authorization by using Form GST528, Authorization To Use an Export Distribution Centre Certificate.

The EDCP authorization is valid for three years, unless it is revoked. It can be renewed by sending Form GST528 at least three months before the expiry date of your existing authorization.

Non-residents and GST/HST registration

If you are a non-resident doing business in Canada, you may need to register for the GST/HST. This means that:

For more information, see Find out if you have to register for a GST/HST account and Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents.

Related links

The CBSA offers information on importing and exporting for personal use and for businesses:

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