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Tax Highlight

Valuation for Duty Regulations

Jean-François Senécal
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Regulations Amending the Valuation for Duty Regulations
Summary of Amendments

Regulatory amendments were proposed on May 27 by the Canada Border Services Agency (CBSA) respecting the valuation of imported goods. The CBSA intends to address a perceived advantage for non-resident importers (NRIs), which are businesses located outside of Canada that ship goods to customers in Canada. NRIs’ are currently entitled to declare a lower value for duty (VFD) upon importing goods to Canada by using an earlier sale price and not the sale to an actual buyer located in Canada that brought the goods into Canada. The VFD is the base figure on which duty owed on goods imported in Canada is calculated. Even if no duty is owed, the VFD of goods must still be established so that any applicable assessment of the goods and services tax and harmonized sales tax (GST/HST) may be calculated. The sale price that is used by NRIs in these instances occurs in the earlier stages of the supply chain, which allow for the disclosure of a lower VFD, and ultimately less custom duties on goods imported to Canada compared to Canadian importers.

The proposed regulatory amendments are intended to clarify which sale is to be used to calculate the duty on imported goods in order to address the uneven treatment for businesses located outside of Canada that ship goods to customers in Canada and Canadian businesses.

This is a significant change to a long-standing position that stems from established case law . If implemented as proposed, the broad regulatory amendments will impact our clients, resident and non-resident of Canada, which are importers of consumer goods through e-commerce and wholesale channels.


Further details regarding the proposal, and a comment section are included in the link below.


Canada Gazette, Part 1, Volume 157, Number 21: Regulations Amending the Valuation for Duty Regulations