How to Calculate a Canadian Duty

Canadian duty can be paid at the border for goods purchased in the United States.

Canadian Duty is an additional tax paid on goods imported into Canada. If you are buying a large quantity of goods to be shipped to you in Canada, you can use this method to estimate the additional cost of the Canadian duty.

Instructions

1. Check if your personal exemption applies. If you are buying a small quantity of goods for your personal use, there is no duty if the cost of the goods is less than the personal exemption. The personal exemption can be found on the Canadian Border Services Agency (CBSA) website.

2. Determine the Harmonized System (HS) code for the goods you are buying. You can determine the code at betterdollar.com. If you search using a single word as "shoes," all shoe categories are given. The code for men's bowling shoes is 6403.19.20.31 and has an 18 percent duty as of August 2010. The Most Favored Nation (MFN) tariff can be found on the (CBSA) website by searching on the term "MFN."

3. Determine the total cost of the goods being purchased. Duty is applied to the"CIF" cost of goods. CIF stands for Cost, Insurance and Freight. The cost of shipping can be found on the shipping company's website.

4. Calculate the duty. In the men's bowling shoes example, if you were buying 50 pairs at 10CAD ($9.54 U.S.), the cost is 500CAD ($477.05 U.S.). If insurance is 50CAD ($47.71 U.S.) and shipping is 75CAD ($71.56 U.S.), the total CIF is 625CAD ($596.32 U.S.). At 18 percent, the Canadian duty is 112.50CAD ($107.34 U.S.). This will not be the total cost as other taxes--such as GST and HST--will also apply.

Tips & Warnings

• Significant fines can be assessed for repeatedly assigning the wrong code to goods bought in other countries. You should check the code with the CBSA if you are making a number of purchases from other countries.

References

• Canadian Duty Rate: Complete Database Search: Better Value in Dollar
• Fed Ex: Calculating Duties and Taxes