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Top 8 Things You Need to Learn About the Import Tax From Canada To US

Diana Zheng
  •  
  •  
May 2, 2022

Import tax is something many sellers refuse to deal with due to deep terminologies and confusing rules. However, it is also something that sellers should know about, especially if they want to expand their business across the border or internationally. While you might find it challenging to understand the words initially, it will be easier to digest everything once you learn the basics. Check this article to know the top 8 things you need to learn about the import tax from Canada to US. 

  1. What is Customs Duty?

When we say customs duty, we discuss the tax imposed on goods transported across international borders.The government uses the tax to increase its revenues, strengthen import security, and control the movement of imported goods. 

For example, you are a Canadian seller, and your buyer lives in the United States. For you to ship your products across the border, you need to file documents at the port of entry and settle the supposed duties to Customs. However, there is a catch for online sellers for cross-border shipping. If the declared retail value is less than CAD800, you are exempted from paying the import duty. Furthermore, shipping partners, like Stallion Express, allow you to skip the tedious process of getting the file entry documents. 

  1. How to Deal with the US customs?

When sending products across the border, honesty and patience are needed to accomplish the tax. As mentioned, you can escape from the expensive import fees when the declared retail value of the products you ship is less than CAD800. If the border protection finds out that you are sending products more than the declared retail value, chances are you will be charged with fines and penalties. Furthermore, it can also impede your subsequent shipments or delay your shipping process. 

For example, the actual retail value of your item is $980. But, you intentionally leave out things or misrepresent their value to reduce the declared retail value to $750. Once the customs authorities find out that you under-declare your items, they have the right to impose penalty fines, delay your shipment, or even seize your goods altogether.

So to prevent this from happening, always be honest in your transactions. It will delay your shipment and taint your reputation as an online seller.

How to Calculate Cost? image
  1. How to Calculate Cost?

To know the value added tax (VAT) on your shipment, add the retail value, shipment costs, insurance, import duty, and other extra charges. Next, multiply the subtotal by the destination country's VAT rate. The total amount will be the price to pay to the customs for your shipment.

  1. What are the Products Allowed for Informal Entry?

Whether you send prohibited items intentionally or accidentally, your products cannot be exported across the border as the Canada Border Services Agency strictly checks every shipment. Some of the things you cannot ship are tobacco, cosmetics, and medicine. However, always check the items listed under FDA-prohibited to avoid delays or any issue arising. 

Furthermore, even though you get special permits or licenses for the products, it will take more time, and many shipping companies will not accept it. There are many ways a courier handles the load with prohibited items. 

a. They have the right to open the package and take out the restricted items to continue with the shipment.

b. They can deliver it back to the package sender.

c. They can confiscate the products and dispose of them accordingly. 

  1. What are the documents you need to prepare?

You can skip the tiresome process of filing the documents for your cross-border shipment when you choose a shipping company like Stallion Express. They can get and process the records on your behalf. However, you can check the documents below to understand how lucky you are for choosing Stallion and escaping the expensive shipment process.

a. Bill of Lading (BOL) - It is a document with a list of all the goods included in the shipment. You can also find important information like the shipment pick-up destination, size and weight, product specification, and sender and recipient's contact information. 

b. Packing Slip - Also known as the waybill, a packing slip is a piece of document indicating the product details, like order date, ordered products, and quantity of each order, to confirm the correctness of what was purchased. It is usually attached to the pouch or package.

c. Commercial Invoice - This document is the only paperwork you need to prepare when shipping from Canada to the United States. It will show a complete description of the imported goods, including their overall retail value. You need to prepare two copies for the commercial invoice; one will go with the Bill of Lading, and the other will go with the courier crossing the border into the USA. 

d. Certificate of Origin - Just like the name suggests, this document provides information about where the goods are being shipped from. It will provide the customs authorities with an accurate collection of customs duty rates.

  1. How to Pay for Customs Duty?

If you need to pay the duties and taxes Canada to USA fees, you should pay them before the CBP processing. Don't forget that you can only use U.S. currency. Next, you can use a personal check in the exact amount, drawn on the U.S. bank, payable to the U.S. CBP. You must provide identification, like a passport. The second option will be issuing a government check ( you can also use a money order or traveler's check) if the duty is not more than $50. However, choosing Stallion Express will allow you to avoid paying this amount! 

  1. How Can Stallion Express Help Me with Customs Duty?

Stallion Express is the leading shipping company in Canada, offering the cheapest rates and faster delivery times. With items less than CAD800 declared retail value, Stallion Express can help you escape the troublesome task of getting the documents for your shipment. Plus, you can also avoid paying import duties from Canada to US. Furthermore, Stallion can provide you with the protection that you need in case an unforeseen event happens to your package during the customs clearance. You can access Stallion Express and its numerous perks by creating your own Stallion account. 

How does it affect Internet purchases?
  1. How does it affect Internet purchases?

Since Stallion helps you escape Canada import tax to the US, you can save on shipping process and fees. It can also affect your shipment with 2x faster delivery time. This can be your special feature as a seller because customers would want to have their items, especially the ones ordered abroad, immediately. It can affect the customer satisfaction rating and customer retention. 

If you want to know more about Stallion Express and other information about the import tax from Canada to US, check our website for the latest updates and more information about the company and how we work!

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Diana Zheng
Written by Diana Zheng

Diana leads the growth marketing initiatives at Stallion Express. As a personal trainer turned digital marketer, Diana is obsessed with equipping eCommerce entrepreneurs with everything they need to scale their online businesses. You can catch her doing yoga or hitting the tennis courts in her spare time.

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