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/HST is calculated on the Canadian dollar value of the goods, including duty and excise tax, and is collected at the border at the same time as these duties and taxes.
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 may 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.
No tax applies to items specified as non-taxable importations. Examples of non-taxable importations are:
- 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 imported by a charity or public institution that have been donated to the charity or institution;
- goods imported for the sole purpose of maintenance, overhaul, or repairs, if the title or use to those goods does not pass while they are in Canada, and the goods are exported as soon as the services are completed;
- goods imported by manufacturing service companies where the goods are processed for non-residents and later exported without being used in Canada. Any parts to be used in or attached to, and materials directly consumed or expended in the processing of those goods, are also non-taxable. The manufacturing service companies 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 other than for shipping and handling; and
- goods valued at $20 or less sent to a person by mail or courierat an address in Canada, except for the following prescribed goods:
- excisable goods (such as beer, tobacco, and wine);
- books, newspapers, magazines, periodicals, or other similar publications, where 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.
In most cases, the HST applies at the border to taxable importations of non-commercial goods imported by a resident of a participating province, regardless of the point of entry into Canada or customs clearance.
Taxable non-commercial goods imported into a participating province by a resident of such a province are subject to the HST on importation, except for motor vehicles required to be registered in a participating province, or a mobile home or floating home that has been used or occupied in Canada by an individual.
Although the provincial part of the HST is not payable when you import commercial goods that are destined for the participating provinces, the goods may be subject to the self-assessment rules discussed under Goods, intangible personal properties (IPP) and services brought into a participating province. 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.
The self-assessment rule for goods will also apply when goods are brought into a particular participating province from another participating province for which the provincial part of the HST is lower. If a person is required to self-assess under this rule, the amount of tax will be determined by multiplying the difference between the provincial part of the HST for the destination participating province and the provincial part of the HST for the origin province by either the amount paid for the property or the fair-market value of the good at the time of bringing it in.
During a business trip, a Prince Edward Island resident purchases a watch in Ontario for $10,000 plus $1,200 HST (5% is the federal part of the HST ($500) and 8% is the provincial part of the HST ($800)). When returning to Prince Edward Island, the Prince Edward Island resident would be required to self-assess tax on the $10,000 at the rate of 1% (the 9% Prince Edward Island provincial part of the HST less the 8% Ontario provincial part of the HST), which in this example would be $100.
How to self-assess
If you are registered, the tax is payable when the goods are brought into a participating province. Enter this amount on line 405 of your GST/HST return. You may be entitled 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 details on ITCs, see Input tax credits.
If you are not registered for the GST/HST and have to self-assess the part of the HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).
Forms and publications
- GST/HST Technical Information Bulletin B-079, Self-Assessment of the HST on Supplies Brought Into a Participating Province
- GST/HST Policy Statement P-125, Input Tax Credit Entitlement for Tax on Imported Goods
- Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST)
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