With the holiday season upon us, many businesses and individuals send and receive gifts that cross borders. Whether you are sending corporate gifts to clients and vendors, online shopping or receiving gifts by mail from family and friends, you should be aware of a few details with regards to holiday gifts and cross-border shipping.
A. Sending holidays gifts from a business to a business
1. Don’t let customs clearance catch your recipient by surprise.
When sending a business gift, the receiver of the gift should not have to be responsible for customs clearance charges. Especially since they will not have the required information of the item being gifted in order to complete the customs entry. Arrange for customs clearance through your customs broker. Even though these are free, non-solicited gifts, they will require clearing customs and payment of all applicable duties and taxes.
Customs clearance requirements:
The gift will need to be accompanied by a pro-forma invoice, including all of the same required information as a commercial import. You must also declare an accurate commercial value for the product, as the Canada Border Services Agency (CBSA) does not accept inaccurate valuation.
2. Alcohol and spirits can be more expensive when shipping internationally.
Importing alcohol into Canada is subject to high duty and excise tax rates, and the import must be routed through a board, commission, officer, or governmental agency legally authorized to sell intoxicating liquor. If gifting liquor is a must, try contacting a winery or liquor store in the Canadian domestic market to purchase from and ship on your behalf.
3. Select the right gift basket.
If purchasing prepackaged gift baskets, be aware of its contents. Certain items such as meats, cheeses, fish and plant products require additional certificates, licenses, permits, and often carry high levels of applicable duties, making it extremely difficult to process such small quantities of these items contained in these gifts. We suggest giving gift baskets made up of items such as cookies, chocolates, coffee, crackers, oils, candles, etc., and avoid anything made from animal or animal products.
The bottom line:
If your organization is sending gifts cross-border, be prepared to treat them like every other export that is moved across international borders.
B. Shopping for holiday gifts online.
Many shoppers are choosing to stay away from the crowds, and are turning to online shopping these days. Be aware that the vast majority of online purchases are shipped from a non-domestic market (international) and will be required to clear through customs.
Check the online store’s or seller’s terms of sale and delivery
Confirm who is required to pay for the customs clearance – the seller or purchaser. If the purchaser is responsible for the customs clearance you will need to be prepared to pay all applicable duties and taxes when the item moves across the border. If the shipment is sent by mail and valued under $60.00 CAD, then there is the potential for the Canadian Border Service Agency (CBSA) to allow the shipment to enter Canada without duties and taxes being paid.
Customs clearance requirements:
Although it will be a personal, non-commercial entry, in order to process the import you will be required to provide an invoice, including country of origin of the product, currency, and a complete description of the product(s) being shipped.
C. Mailing personal gifts to family and friends.
If you have friends or relatives who live abroad and are mailing you gifts, please ensure that they properly qualify the item as a gift and include a customs declaration.
Here are some things to keep in mind:
- For an item to qualify as a “gift”, a friend or relative must send it to you personally and include a card or other notice indicating that it is a gift.
- If you receive an imported gift by mail that is worth $60 CAD or less, you will not have to pay duty or tax on it.
- If the gift is worth more than $60 CAD, you will have to pay any applicable duties and taxes on any amount over $60 CAD. For example: If a relative sends you a gift worth $200 CAD, you will pay any applicable duty, GST or HST and PST on $140 CAD.
Certain items do not qualify for the $60CAD gift exemption and are listed below:
- alcoholic beverages
- advertising material
- items sent by a business
Please also note that the $60 CAD gift exemption cannot be combined with the $20 CAD exemption that is available on most items valued at $20 CAD or less.
*These guidelines are applicable all year round, and are not specific to the holiday season.
Need assistance with shipping your holiday gifts into Canada this season? Pacific Customs Brokers can help. Contact our Client Services team for questions or a quote.
Will you be shipping Christmas gifts cross-border this year? Have questions? Leave them in our comments section below.