Shipping to Canada: Taxes, Duties & Tariffs

September 14th, 2018 Comments off

 

With over 20 million English-speaking digital buyers, it’s easy to see why Canada is an attractive place to sell for U.S. based e-commerce merchants. Canada even has one of the strongest e-commerce infrastructures in the Americas, including broadband internet access and widespread mobile phone usage for completing online transactions. Selling internationally doesn’t come without its challenges, however. Like any other country, Canada has duties, taxes and tariffs you will need to be aware of. If you haven’t gone through the process to become a Non-Resident Importer your Canadian buyer is responsible for duties, taxes, and tariffs that are imposed on imported goods.  It is important you communicate these additional fees to your customers at checkout so as to avoid unpleasant surprises at the time of package delivery.

 

Duties and Taxes

There are 3 kinds of duties and taxes for items being imported into Canada:

  1. Goods and Services Tax (GST): This is a 5% federal tax that applies to items being sold to Canadian customers for domestic consumption.
  2. Harmonized Tax (HST): A handful of Canadian provinces have opted to harmonize their provincial sales tax with the general sales tax and the total rate is known as Harmonized Tax.
  3. Provincial Sales Tax (PST): Provinces that do not participate in the HST collection process impose their own taxes at the local level. The tax rate varies by province and can range from 5% to 9.75%.

 

Tariffs

Along with duties and taxes, your Canadian customer may also need to pay tariffs. Tariffs depend on the country of manufacture, not the country from where the product is purchased.  NAFTA eliminates tariffs on all goods that are manufactured in the U.S. and shipped to Canada.  However, if your product includes components that were manufactured outside the U.S., then your Canadian customer will need to pay tariffs on those components.

 

Shipping to Canada

Over one-third of Canadian e-commerce sales are currently coming from U.S.-based websites. That’s nearly $50 billion dollars flowing in from north of the border. With annual growth predicted at over 12% for the next three years, now is the time to open your business to eager Canadian buyers. If you are looking to sell in Canada be sure to check out the Stamps.com Guide: How to Ship to Canada.

Becoming a Non-Resident Importer to Canada

August 17th, 2018 Comments off

Canada, our familiar neighbors to the north. When looking to grow globally, Canada is easily the first place to look for e-commerce merchants in the U.S. It’s only natural. We’re close to our Canadian neighbors in proximity, language and culture. Yet, exporting goods to Canada isn’t as easy as it may look.

U.S.-based retailers face a number of obstacles to selling in Canada. American retailers can’t collect Canadian sales tax at the time of purchase, only at the time of delivery. It can be a complicated process for Canadian buyers too. When Canadian customers buy from the U.S., they may be forced to go to their local customs office to pick up their purchase.

The result? A poor experience for the customer who may have to pay additional taxes or even visit a customs office just to pick up their online purchase. Luckily, there’s a way for U.S. online retailers to get around these issues in Canada: Become a non-resident importer.

What is a Non-Resident Importer?

A “non-resident importer” (or NRI) is defined as a business registered outside of Canada that assumes responsibility for customs clearance and other import-related requirements for bringing goods into Canada. Americans can register to become an NRI through the Canada Border Services Agency (CBSA).

As a non-resident importer, you can pay Canadian duties and taxes before delivery. Saving customers the hassle of paying taxes after you deliver to them makes you more competitive in the Canadian market.

Competitive Advantages of Becoming a Non-Resident Importer

Once you become a non-resident importer, the process of buying becomes much more simple for your Canadian customers. The advantages of becoming an NRI for you and your customers are clear:

  • There’s no need for your Canadian customers to go all the way to a customs house to pick up a purchase, you can ship directly to their door
  • Tracking shipments to Canada from the U.S. becomes an entirely visible process, a package goes from the USPS to Canada Post
  • Your Canadian customers aren’t hit with additional taxes upon delivery
  • Because you can pay taxes to the Canadian government, you can give your customers clear product prices that include Canadian taxes

Responsibilities of Non-Resident Importers

When you become a non-resident importer, you must fulfill certain responsibilities. You also open yourself up to regulations and fines for not complying with those regulations. Plus, you’ll be dealing with more than one level of taxation. The Goods and Services Tax (GST) is charged throughout Canada, while Harmonized Sales Tax (HST) is charged in Quebec, Nova Scotia, Prince Edward Island, Newfoundland/Labrador, New Brunswick, and Ontario.

Here are some of the issues you’ll need to navigate as a non-resident importer:

  • Canadian regulations require you to meet additional rules, such as having a Business Number and an Importer Number (or RM)
  • You’ll be responsible for collecting and paying both the Goods and Services Tax and Harmonized Sales Tax
  • File GST/HST sales tax returns on time, or be charged penalties
  • Provide customs documentation and pay customs duties to the correct Canadian government authorities
  • Make sure labeling and marketing follows Canadian laws
  • Once you get an income tax number, you’ll be subject to investigations of your books and records by Canadian tax authorities

Ready to Become a Non-Resident Importer?

Clearly, there are hurdles to becoming a non-resident importer. But the rewards are huge. You can be competitive with other Canada companies – without having a physical office, warehouse or retail location in Canada. Ready to get started? Learn more about the ins and outs of becoming a non-resident importer.

Categories: International Shipping, Shipping Tags:

Australia Changes GST Laws for Imports Under A$1,000

June 29th, 2018 Comments off

International e-commerce sellers that ship products to Australia should be aware of a new tax starting July 1, 2018. The Australia Goods and Services Tax (GST) is a 10% fee that the Australian government adds to all goods and services being imported into Australia. The GST is meant to help protect Australian businesses from cheaper overseas manufacturers, with the hope the tax will level out the retail product pricing.

Australia’s Goods and Services Tax – What is Changing?
Prior to July 1, 2018, consumers in Australia could purchase products from international sellers and have them imported duty and tax-free as long as the product value was less than A$1,000. (GST was already being applied to goods and services over A$1,000.) This created a perfect buying market for U.S. online retailers since most e-commerce orders were low-value items such as sporting equipment, clothing, jewelry, cosmetics and electronics.

Starting on July 1, 2018, Australia will now apply the 10% GST to all imports, including products valued under A$1,000.

International E-Commerce Sellers – Registering for GST
Retailers with OVER A$75,000 annually in revenue
In order to comply with the recent changes made to the GST, international e-commerce merchants who have over A$75,000 annually in sales (sales directly to Australia) will be required to register with the Australian Taxation Office. Once registered, online retailers will need to charge and collect the GST tax when selling goods to Australian buyers. Note: This GST tax collection by the online retailer will be indicated on the customs documents.

Retailers with UNDER A$75,000 annually in revenue
If your sales are under A$75,000 you are not required to register with the Australian Taxation Office. When you sell a product to an Australian buyer, the GST tax will be applied at the border when the product is imported.

Be Ready for the New GST Law Changes!
If you are an international e-commerce merchant selling to Australia with sales over A$75,000, you MUST comply with the new regulations.

There are severe penalties for not complying with the GST law, including:

  • Imposing an additional 75% administrative penalty (legally payable)
  • Intercepting funds from Australian buyers that are destined to seller account(s)
  • Registering the debt in a court in the U.S.
  • Requesting the Internal Revenue Service to recover the debt on behalf of Australia

Register your company as a GST business with the Australian Taxation Authority.

Stamps.com has you covered when it comes to shipping your goods overseas!  The shipping platform fully supports the new GST requirements. If you’re shipping items to Australia for your business, you will not need to add additional information to the labels on your packages to be in compliance with the new law.

Free Guide: How To Ship To Canada With The USPS

August 25th, 2017 Comments off

Have you considered expanding your US-based ecommerce business to Canada? When shipping with the USPS, you will not be charged extra fees to deliver packages to Canadian destinations.

If you want to learn the ins and outs of shipping to Canada, check out Stamps.com’s new eBook, “How To Ship To Canada With The USPS.” This guide will walk you through your options for shipping to the great north.

This guide covers:

  • How to evaluate shipping carrier cost to Canada
  • What products cannot be imported into Canada
  • Which duties, taxes and tariffs apply to your products
  • Choosing a shipping carrier for Canadian shipments
  • USPS Priority Mail International zones for Canada
Categories: International Shipping Tags:

How to Mail an International Letter or Postcard

May 26th, 2017 Comments off

Sometimes you don’t need to send a large shipment overseas, but simply want to send a postcard to a relative in Sweden or a letter to a friend in South Africa. Stamps.com makes it easy!

You may already be familiar with our Original NetStamps product. The great thing is that they can be used for both domestic mail and international mail! Keep in mind that Custom (Photo) and Themed NetStamps can only be used for domestic mail. If you need Original NetStamps, you can order them easily from our Online Store at different quantities.

To print postage for international postcards or letters:

  1. Please log in to your Stamps.com software and click on “Stamps.”
  2. Under “Postage Details,” please select “I want to specify the value for each stamp.”
  3. No guesswork is needed: if you need the current international letter or postcard rate, please click on the icon bearing the image of a globe and the word “Intl.” to access our International Rate Calculator. Select the country, territory, or dependency to which you would like to send mail. Select the mailpiece type and enter the weight of your mailpiece. If your mailpiece is less than a pound, enter zero for its weight.
  4. Click on “Check Rates.” You will be given a list of available mail classes and rates for the country you have selected. You would not generally need a customs form for international letters or postcards; you would only need one if your mailpiece is 16 ounces or greater or has a declared value of $400 or higher.
  5. Click on the “Use This Rate” button.

Once you click on “Use This Rate,” you will be taken back to the NetStamps page. Now all you have to do is type in the serial number under “Print Details.” You’ll find the serial number on your actual Original NetStamps sheet. You can print a full sheet of international stamps by making sure that the “Print All” box is checked. You can also print just one by selecting the Print Quantity. Click “Print Postage” when your sheet is ready to be printed.

That’s it! Now all you have to do is affix your stamp to a postcard or letter. NetStamps do not include an address, so make sure you write the complete international address clearly on your mailpiece. No need to wait in line at the Post Office—you can drop your mailpiece off at a USPS blue collection mailbox or in a Post Office mail drop slot.

Categories: International Shipping Tags:

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