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Calculating Import Duties & Taxes

Accurate calculation of duties and taxes requires a thorough knowledge of the HS Codes and Trade Agreements as it may affect the correct tariff charge and customs clearance of your shipment.

The following example depicts a calculation of duties and taxes applied to goods imported into Canada and valued at USD$200. The goods are subject to a 4.2% duty rate and 6% GST. An exchange rate of 1.038 is used for the purpose of this example.

 

Value of the shipment = USD$200 (convert to Canadian currency at an exchange rate of 1.038)

The converted amount is the value for duty -- USD$200 x 1.038 = CAD$207.76

The value for duty multiplied by the rate of duty is the customs duty -- $207.76 x 4.2% = CAD$8.72

Value for duty + customs duty = Value for tax -- CAD$216.48

Value for tax multiplied by the tax rate = Tax -- 216.48 x 6% = CAD$12.99

Duty and Tax payable = Tax + Duty -- CAD$12.99 + $8.72 = CAD$21.71

Customs Clearance & Brokerage for Export Shipments

Shippers in Canada will enjoy preferred customs clearance charges when they elect to pay the customs clearance charges for Purolator Express® U.S. and Purolator Express® Ground U.S. shipments to the U.S. that are cleared by Purolator’s default broker.

Assigning a Customs Broker for U.S. Shipments

When shipping to the U.S. with the Purolator Ground® U.S. service, you have the option of selecting your own customs broker. The customs broker must be a licensed U.S. customs broker and be able to clear Purolator shipments moving through our delivery network. If a customs broker is not assigned on the commercial invoice or bill of lading, we will assign an approved customs broker on your behalf according to the Purolator Terms and Conditions of Service.

Note: Customers are not able to select an alternate customs broker for Purolator Express® U.S. and Purolator Express® International shipments as all customs clearance will be performed by Purolator’s designated broker.

For more information, please contact your Account Executive or call us at 1 888 SHIP-123.

Calculating Export Duties & Taxes

Accurate calculation of duties and taxes requires a thorough knowledge of the HS Codes and Trade Agreements in order to determine the correct tariff treatment. The following example depicts how duties and taxes may be calculated for an export shipment to an international point valued at USD$932. The goods are subject to a 7% duty and an 18% VAT. In this case, the Cost, Insurance and Freight (CIF) Value is used to calculate duties and taxes. Please note that freight and insurance may be assumed values used by a destination customs authority, and all funds are in USD.

 

Invoice Value                        $932

Insurance Paid                     $16

Freight Paid                          $52

Total CIF Value is the total Cost (invoice value in this example) + Insurance paid + Freight paid = $1,000

The amount of duty charged is the CIF Value multiplied by the rate of duty (7%) = $70 ($1,000 x 7%)

The value for tax is the total CIF + duty charge = $1,070

The VAT is the total CIF + duty charge multiplied by the VAT rate (18% in this example) = $192 ($1,070 x 18%)

Duties and Taxes payable = Duty charge + VAT Tax charge: $70.00 + 192.60 = $262.60

CIF + Duty + VAT = $1,262.60 = Total Landed Cost for the goods