Sometimes, an employee or owner of a company will ask their customs broker to clear a personal import using their company’s commercial import account. It is seemingly easier to clear goods under an established account rather than the alternative, BUT this has clear pitfalls that we want to bring to your attention.
We do not recommend clearing a personal import as commercial goods for these 4 important reasons:
- Provincial Sales Tax (PST) needs to be assessed. If a commercial import is cleared in the name of a business, the business will have to self-assess the PST, which is often forgotten or unknown. If the shipment is cleared correctly as a personal import, PST is assessed at the time of importation with the exception of goods that require registration, such as vehicles.
- The import is filed against the company’s business import number. This means the company is responsible for all audits, Administrative Monetary Penalty System (AMPS) or other queries from government agencies for the next 6 years!
- A personal import is exempt from some requirements that commercial importations are required to meet. An example of this is the requirement for North American Free Trade Agreement (NAFTA) certificates. Personal use goods importations can apply NAFTA tariff treatments without a completed NAFTA Certificate or Statement (to reduce the duty payable).
- The company has no financial interest in the shipment. In most cases, in order to act as the Importer of Record (IOR) for a shipment, a company or individual is required to be the buyer or seller of the items.
Importers of personal use goods have 2 options for clearance:
- If items are being shipped to the buyer, for example in online shopping, they can self clear at the customs office closest to them once the shipment has arrived at the bonded warehouse in Canada. Unfortunately, this option can incur additional fees from the transportation company for bonding the load and can delay the delivery of the shipment. The importer will have to obtain a copy of the in-bond documents and then clear the shipment in person at their local Canada Border Services Agency (CBSA) office. Once cleared they will have to return a copy of the customs release to the carrier’s warehouse before the goods can be delivered. Depending on the carrier, the importer maybe able to meet them at the border and clear at the time of arrival. If you are transporting your personal import yourself, you are required to declare your imports at the border when you arrive. At that time customs will assess any duties and taxes payable.
- They can hire a customs broker to complete the customs declaration on their behalf. The use of a customs broker will incur additional brokerage fees. However the use of a customs broker will allow the shipment, in most cases, to clear customs electronically at the first point of entry and be be delivered soon after crossing the border. Using a customs broker will also ensure that all import requirements are met and help avoid delays.
A broker can easily and swiftly assist the individual with a personal import as the CBSA has provisions for a customs broker to use their own business number (specific to personal importations) to clear personal shipments. We can even bill the charges to the commercial account so long as we have the correct authorization from the client.
The difference between personal use goods and personal effects importing:
There is a difference between personal use goods and personal effects imports. To understand the difference please visit our blog post on How To Import Personal Belongs vs Personal Use Goods.
Clearing the shipment correctly as a personal import is the desired and proper way to handle these clearances in order to ensure the import is entered into Canada in compliance with all requirements.
Need help with your personal use goods import? We can help. Call us anytime and tell us your import story toll-free!