CUSTOMS BROKERS CANADA

GST: THE GOODS
AND SERVICES TAX
The Canadian Goods and Services Tax
must be paid on ALL import shipments

The Canadian Goods and Services Tax (GST) is a Federal Government Tax similar to the Value Added Tax (VAT) applied to all purchases in most European countries. It is a cumulative tax which applies at all trade levels.

The GST rate is calculated at 7%.

For practical purposes, the importation of goods at the "transaction price" between a foreign supplier and a Canadian customer must be considered as being the first trade level at which GST is payable.

Because the transaction price of any product increases at each subsequent trade level, there may be several different trade levels at which GST is payable.

With the exception of the final trade level (the consumer), the parties at all trade levels are able to deduct the GST amount paid by them upon purchase of the goods from the GST amount charged by them upon resale of the same goods, when they account for their GST collections to Revenue Canada (the Canadian Tax Department). This is called an "Input Tax Credit".

Resident as well as non-resident importers must account regularly to Revenue Canada for all of their GST transactions!

There are very few products (such as essential foods and Canadian goods returned) on which the GST does NOT apply.

(AND ANOTHER TAX TO CONSIDER: THE "HARMONIZED TAX")

(THE OFFICIAL CANADA CUSTOMS GST/HST SITE)
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Last updated 2000-06-11