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:

Ecommerce Trends to Watch

July 20th, 2018 Comments off

Ecommerce is experiencing a new wave of innovation. While buying products online is now commonplace, the technology supporting e-commerce is evolving to eliminate any remaining friction in the purchase process. This article will examine some of the most exciting developments in e-commerce and how they are changing the retail experience.

  1. Mobile-First Shopping Takes Hold

The first era of e-commerce took place using desktop computers. The next will take place in the palm of your hand. At the end of 2017 two-thirds of e-commerce transactions were completed on a mobile device. Retailers are responding by partnering with social media platforms such as Facebook and Instagram to drive sales. Consumers can now enjoy the entire retail experience on a smartphone and innovations such as fingerprint authentication remove even more friction from the purchase process.

  1. The Growing Prevalence of Voice Search

Another innovation that is removing friction from retail is the growth of voice search. Voice search using Alexa, Google Home, or other smart devices allows consumers to make a purchase verbally, sometimes without even seeing the product. Purchases through Amazon or Google can be authenticated using a credit card and shipping address on file. Voice search adds greater convenience for consumers and new challenges for retailers. As one business school professor noted, voice search using Amazon’s Alexa favors the company’s own brands at the expense of competitors. Brands depend on visual marketing to communicate with consumers and as voice search takes off will need to completely rethink their marketing efforts.

  1. Customers Expect Faster Shipping Times

It used to be that goods were shipped in a week and the customer was entirely satisfied. Amazon changed the game when it gave Prime members free expedited shipping. Now ecommerce sellers are racing to offer faster and faster delivery. Ecommerce sellers can simply go to Stamps.com to print shipping labels with the fastest delivery times USPS has available. Online shoppers have become accustomed to quick shipping and easy returns and retailers that refuse to play will lose sales competitors.

In a few years’ time, shoppers will expect to be able to order a product out loud and have it delivered quickly, safely and securely. The next wave of e-commerce eliminates many of the common frictions and pain points in making a purchase. Companies that do not embrace this trend will be left b

Categories: Marketing for Ecommerce, Shipping Tags:

USPS International Weight Limits

May 31st, 2018 Comments off

Did you know that USPS weight limits vary by mail class and destination country? Check out the table below to determine how much your international package or letter can weigh:

 

Categories: Shipping Tags:

Shipping to Mexico with USPS

April 24th, 2018 Comments off

Did you know that 48% of all Mexican imports come from the United States? And with an expected 84.9 million Internet users in Mexico by 2019, it couldn’t be a better time for e-commerce sellers to open their markets to online buyers south of the border.

Here are the basics on shipping your products to Mexico vis USPS.

Available USPS Mail Classes to Mexico

  • Priority Mail Express International. For date-specific delivery and a money-back guarantee, you’ll also appreciate 3- to 5-day delivery on packages up to 70 pounds.
  • Priority Mail International. With similar features to Priority Mail Express International (above), Priority Mail International delivers within 6 to 10 days.
  • First Class Package International Service. If you’re shipping small, inexpensive items to Mexico, First Class Package International Service is the economical choice for packages up to 4 pounds, with 7- to 10-day delivery.
  • Stamps.com International Flats Service. Stamps.com offers customers a special rate on shipping merchandise in Flats/Large Envelopes — up to 65% off international package rates.

Important Restrictions to Note

As with all international shipping, it’s vital to understand prohibitions and restrictions to Mexico.

Prohibited and restricted items include:

  • Alcoholic beverages
  • Electronic Cigarettes
  • Weapons
  • Furs
  • Precious Metal
  • Plants
  • Seeds
  • Tobacco

Lastly, here’s some sweet advice for U.S. shippers – as Mexico is the birthplace of chocolate, understandably the country takes that product seriously. If you sell chocolate or products made of chocolate, you must obtain prior authorization for these items from the Mexican Secretary of Commerce.

Printing International Postage for Mexico via Stamps.com

It’s simple to ship to Mexico with Stamps.com! Here’s a rundown on the benefits you receive when you take advantage of Stamps.com’s services.

  • Discounts on international shipping rates. Save up to 5%!
  • Directly fill out Customs Forms. Save time – the Stamps.com interface automatically inserts your e-commerce order data into the Customs Form.
  • Insurance savings. When you use Stamps.com, enjoy savings of up to 40% on international insurance.

The Bottom Line

Our South of the Border neighbors represent a tremendous opportunity for e-commerce sellers. With several cost-effective shipping options to Mexico, plus extra benefits to Stamps.com users, you could soon be enjoying a fiesta of new business and simple solutions.

Categories: Shipping Tags:

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