With the Xmas season around the corner, Do you know what qualifies as a “Gift” for Canada Customs?
Today’s topic is one that is commonly misunderstood by the general public and it is to do with the $60 gift exemption under tariff 9816. So here are 8 facts associated to tariff 9816:
1. This tariff 9816 applies only to casual donations sent by non-residents of Canada to a resident of Canada. A common mistake is that some residents of Canada returning from a trip or holiday purchase gifts for friends and family and believe that these items will qualify under 9816. They do not. These types of gifts retired to fall under tariff 9804 to be imported duty and tax-free as part of their personal exemption.
2. Gifts under tariff 9816 may not be considered advertising matter, or the alcohol or tobacco.
3. If the value of the gift under tariff 9816 exceeds the $60 amount, then the taxable amount will be reduced by $60. For example, your uncle from Poland brings you a sweater valued at $100 Canadian, then tariff 9816 would be applied by taking off $60 and leaving $40 is the amount duties and taxes would be applied to.
4. An association, organization, company, or business of any kind does not qualify as eligible recipient under tariff 9816.
5. In order to qualify under tariff 9816 for duty and tax free importation, no individual item/gift can be valued at more than $60 Canadian, notwithstanding the number of joint recipients. For example, a gift valued at $180 cannot be divided equally by 3 family members.
6. There are no limits to the number of gifts that can be imported free under tariff 9816 so long as they are under $60 Canadian and for different individual who is a resident of Canada.
7. In order to qualify for tariff 9816, items should be clearly marked and identified as a gift. For example, they should be a card or gift to be wrapped.
8. Gifts can be sent by nonresident Canada directly from a third-party such as an online store and qualify for tariff 9816 so long as the customs officer is satisfied that the gift was unsolicited and bona fide.
As of June 1st 2012
If you leave Canada for at least 24 hours, upon your return you are entitled to $200 personal exemption. Any amount over and above this $200 limit or exemption you will have to pay duties and taxes on if applicable. Depending on province of residence, you will pay HST or PST/QST or no provincial sales tax if you’re from say Alberta.
*Keep in mind exemptions can not be combined. I.e. a husband and wife cannot both apply their exemption against a high priced item they purchase abroad. Also children are entitled to a full exemption so long as the item will actually be for them.
After each absence of 24 hours or moreDirectly quoted from the CBSA website, below is an explanation on your exemptions and special duty and regular duty that apply if you exceed your allowance.
You can claim up to CAN$200 worth of goods without paying any duties. This is your personal exemption. You must have the goods with you when you arrive in Canada and you cannot include tobacco products or alcoholic beverages in this exemption. If the goods you bring in are worth more than CAN$200 in total, you cannot claim this exemption. Instead, you have to pay full duties on all goods you bring in.
After each absence of 48 hours or more
You can claim up to CAN$800 worth of goods without paying any duties. You must have the goods with you when you arrive in Canada. Although you can include some tobacco products and alcoholic beverages, a partial exemption may apply to cigarettes, tobacco products and manufactured tobacco.
After each absence of 7 days or more
You can claim up to CAN$800 worth of goods without paying any duties. Although you can include some tobacco products and alcoholic beverages, a partial exemption may apply to cigarettes, tobacco products and manufactured tobacco. With the exception of tobacco products and alcoholic beverages, you do not need to have the goods with you when you arrive.To calculate the number of days you have been absent, do not include the date you left Canada but include the date you returned.
Dates matter, not times.
For example, we consider you to have been absent seven days if you left Friday the 7th and returned Friday the 14th.
You are allowed to import only one of the following amounts of alcohol free of duty and taxes:
- 1.5 litres (53 imperial ounces) of wine;
- a total of 1.14 litres (40 ounces) of alcoholic beverages; or
- up to a maximum of 8.5 litres of beer or ale.
Alcoholic beverages are products that exceed 0.5% alcohol by volume. Minimum ages for the importation of alcoholic beverages, as prescribed by provincial or territorial authorities, are 18 years for the provinces of Alberta, Manitoba and Quebec and 19 years for the remaining provinces and territories.
The CBSA classifies “cooler” products according to the alcoholic beverage they contain. For example, beer coolers are considered to be beer and wine coolers are considered to be wine. Alcohol and wine products not exceeding 0.5% alcohol by volume are not considered to be alcoholic beverages.
The quantities of alcohol you can bring in must be within the limit set by the province or territory where you will enter Canada. If the value of the goods is more than your personal exemption, you will have to pay both duty and taxes, as well as provincial/territorial assessments. In Nunavut and the Northwest Territories, you cannot bring in more than the quantities of alcohol allowed. For more information, contact the appropriate provincial or territorial liquor control authority before you arrive back in Canada.
If you are 18 years of age or over, you are allowed to bring in all of the following amounts of tobacco into Canada free of duty and taxes within your personal exemption:
- 200 cigarettes;
- 50 cigars;
- 200 grams (7 ounces) of manufactured tobacco; and
- 200 tobacco sticks.
After each trip outside Canada of 48 hours or longer, you are entitled to a special duty rate of 7% under the Most-Favoured Nation tariff treatment in addition to your personal exemption. The rate applies only to goods that accompany you, that do not qualify forduty-free entry under the North American Free Trade Agreement (NAFTA) and that are worth up to CAN$300 more than your personal exemption of $800 CAD. The rate does not apply to tobacco products or alcoholic beverages. You still have to pay any GST/HST that applies. In some provinces, the CBSA also collects the provincial sales tax (PST).
Regular duty rate. If you do not qualify for a personal exemption, or if you exceed your exemption limit, you will have to pay the GST/HST, as well as any duty or other tax or assessment that applies on the excess amount. Duty rates vary according to the goods you are importing, the country where the goods were made and the country from which you are importing them. You may also have to pay the PST if you live in a province where the CBSA has an agreement to collect the tax and you return to Canada through that province.
If you enjoyed this post why not subscribe via RSS or join my email newsletter here -> Subscribe
October 20th 2011
Below is an addendum to the above post I wrote the other day to clear up some common misconceptions in regards to personal entitlements after being away fromCanada.
9 Tips with regards to Canada Customs Limits or Allowances with regards to your Personal Exemption
After going on a vacation, how many of you are totally knowledgeable with how much you can bring back toCanadaduty and tax free?
The vast majority of residents ofCanadaare aware that they can bring goods home however they are unclear about every detail. In many cases their information is wrong or completely false and will often result in a nasty surprise after they present themselves to Canada Customs.
This article will talk about 9 facts that are frequently unknown and can doubtlessly help you to keep away from a lot of hassle and more expenditure soon after a costly vacation.
Without further ado, here they are:
1. Personal exemptions cannot be shared – A little understood fact is that couples or family members returning to Canada from vacation cannot share their personal exemptions.
As an example, Mr. and Mrs. Canuck go toThailandon vacation for a few weeks and buy a metal sculpture of an elephant for $1600 CAD. They return toCanadaand declare the sculpture on the E311 declaration card by means of placing $800 under each of their names splitting the $1600 cost of the item.
This is wrong. In the above circumstance, either Mr. or Mrs. Canuck needs to claim the sculpture and will exceed the particular exemption given by tariff 9804.20 of $800 worth of items duty and tax free by an further $800 that could be duty and taxable.
2. Children are provided the same personal exemptions as adults so long as the goods are unquestionably for their exclusive use and benefit at the same time they need to be legally entitled to it. For example, liquor along with tobacco products are certainly not allowed nor would an adult sized mountain bike.
3. Personal exemptions given by Tariff 9804 should be utilized on the highest dutiable item first and then any leftover amount utilized on the subsequent highest dutiable object etc.
An example of this might be Mrs. Canuck returns from an eight day shopping getaway from the UK. She brings back to Canada a sweater she bought for $100, a cellular phone she bought for $500 as well as a pair of rubber wellingtons for $300. Since she has been away a minimum of 7 days she is qualified to receive the $800 exemption.
The first item the exemption should be utilized against would be the boots as it comes with a 20% duty rate; the second item would be the sweater as it has a duty rate of 18%. The remaining $400 still left on the $800 exemption would be applied on the mobile phone which does not have any duty associated, resulting in a balance of $100. The final result is that Mrs Canuck would only need to pay HST/GST/PST (according to province of residence) on the $100 not covered by her personal exemption.
However, if made use of incorrectly, that is her exemption is applied for the mobile phone and sweater first, Mrs. Canuck could be charged potentially 7% duty (not 20% as 9804.30 is applied) on the $100 left over value of the boots.
4. The $200 personal exemption given by Tariff 9804.40 for returning residents away from Canadafor at least 24 hours is only applicable if an individual doesn’t go over the $200 amount.
So for example, if an individual travels to the US and comes back twenty four hours and 5 minutes later and buys $201 worth of goods, the full amount is duty and taxable. This is as opposed to the 48 hour $800 personal exemption and the seven day $800 personal exemption, where only the amount that exceeds the exemption is duty and taxable.
5. Alcohol and tobacco will not be eligible under tariff 9804.40 for the $200 personal exemption following being away from Canada for not less than 24 hours.
6. With 48 hour $800 exemption as well as the 7 day $800 exemption, the quantity of alcoholic beverages you can bring back tax free is qualified by OR, meaning that it is possible to only bring either one of the following:
As much as 1.5 litres of Wine
As much as 1.14 litres of Spirits
As much as 8.5 litres of Beer
• And you must have reached the age of majority for the province you’re entering. I.e. 18 yrs old inQuebec,AlbertaandManitoba. 19 years of age for the remainder ofCanada.
On the other hand with Tobacco, the exemption is qualified by AND, consequently it is possible to bring back all of the following:
200 grams of manufactured tobacco
200 tobacco sticks.
• Please keep in mind that something known as “Minimum Duty” could be applied to tobacco falling under your personal exemption that aren’t labelled “Canada Duty Paid” which is as follows:
• Cigarettes $15 per carton of 200 / (7.5 cents each)
• Tobacco Sticks $11 per carton of 200 / (5.5 cents each)
• Manufactured Tobacco $11 per 200 grams / (5 cents per gram
7. Under Tariff 9804.20, the personal exemption of $800 after being away for not less than 7 days can be applied to items that are going to follow. I.e. Goods being sent to you. For the other exemptions, $200 for at least 24 hours and $800 not less than 48 hrs, the goods must accompany you.
8. Under Tariff 9804.20, the personal exemption of $800 after being absent for a minimum of 7 days, the 7 days don’t include the day of departure.
9. If absent more than 7 days, after you’ve used up your personal exemption under tariff 9804.20 of $800, a further exemption under Tariff 9804.30 can be utilized up to a maximum of $300 extra for goods accompanying you.
So for example, anything surpassing your $750 exemption will be eligible up to another $300 worth of items for either a preferential duty rate of 7% or no duty in cases where the goods are made in the United Statesbut sales tax of HST/GST/PST will always apply.
Due to the fact sales tax always applies to tariff 9804.30, in the event your items are not dutiable or taxable than it wouldn’t be useful to claim this exemption. I.e. An orthopaedic appliance that would be duty free under tariff 9021.31.00.00 and non taxable under the Excise Tax Act.
Note: Alcohol and tobacco items will not qualify under this particular tariff.
I hope now the next time you take a trip, you’ll be much better prepared of what your entitlements are. Happy Trails!
If you enjoyed this post why not subscribe via RSS or join my email newsletter here -> Subscribe
If you have any questions please go to my forum and post there. You can follow the link below to go there.
Also a “like” on Facebook, a +1 on Google, or even a Digg etc is appreciated.
Thanks for reading.