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Stage 3 Duty and taxes - Canada

Dylan Macleod CSC

Dylan Macleod CSC

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Interested to hear other peoples experiences - but I have just been informed by Fedex customs broker that I must pay duties and taxes based on the FULL amount of the Epic (28K) as opposed to the difference after trade in ($10500). Bit of an unexpected bummer.
 
But for example VAT is 20% so do you need to pay 10500 plus 5600 USD as taxes?
 
If I were to do the Stage 3.5 trade-in with RED US as a private person, not as a company, it would go something like this:

$27,500
$300 shipping
total declaration value: $27,800

4,9% import duty on $27,800 = $1,362.20
23% VAT carried on a total of $29,162.20 = $6,707.31

total import duty + 23% VAT = $8,069.51

Luckily for me I have a company. So when I do Stage 3.5 with RED UK, I only pay the 4,9% duty on $27,500 + shipping cost from RED UK to me.
At least according to the latest information I have from RED UK.

edit: fixed a mistake... the $27,500 is not a trade-in value, it's the price of Epic-x without trade-ins.
 
Petri Teittinen said:
If I were to do the Stage 3.5 trade-in with RED US as a private person, not as a company, it would go something like this:

$27,500 trade-in
$300 shipping
total declaration value: $27,800

4,9% import duty on $27,800 = $1,362.20
23% VAT carried on a total of $29,162.20 = $6,707.31

total import duty + 23% VAT = $8,069.51

Luckily for me I have a company. So when I do Stage 3.5 with RED UK, I only pay the 4,9% duty on $27,500 + shipping cost from RED UK to me.
At least according to the latest information I have from RED UK.
Click to expand...

Not sure the difference between Stage 3 and 3.5 - but I am talking about Stage 3 where I get credit for the original $17500 purchase (which I already paid duties and taxes on). Seems like the tax man is double dipping to me. My accountant has informed me I will be rebated on this when I do my year end though. So not a big deal. Just unexpected.
 
Dylan Macleod said:
Not sure the difference between Stage 3 and 3.5 - but I am talking about Stage 3 where I get credit for the original $17500 purchase (which I already paid duties and taxes on).
Click to expand...
Same thing with S3.5.

Oops yeah, noticed I had an error in my earlier post. R1 original value $17500, trade-in to Stage 3.5 is $10000.

Seems like the tax man is double dipping to me. My accountant has informed me I will be rebated on this when I do my year end though. So not a big deal. Just unexpected.
Click to expand...
Definitely. Could also be a big problem if one did not have that extra $7K on the bank account. I don't.
 
Dylan, also keep in mind the brokerage fees, which might add thousands dollars more. The good news is that you can self-clear your package. Since your package doesn't qualify for LVS (Low Value Shipment), you'll have to go to the CBSA office where the Epic-X will arrive (Windsor, TO). Show CBSA the commercial invoice, pay the HST and show it to UPS/Fedex and avoid brokerage fees.
 
Thanks for the advice Adnan. Unfortunately I am working all week and want to use the camera on a job next week - so delaying delivery and travelling to Windsor is not an option. Cheers though.
 
Hey Dylan. I was thinking the same thing when I sent my back last week. I remember going through this a few years ago and there is this great thing they call NAFTA agreement, I'm sure you've heard of it! I just spoke to Customs and they said as long as the camera is manufactured in the US, their is NO duty, just GST/HST! I had the NAFTA item # some where and can't find it. Will try to look for it later, if I find it I will let you know. When REd ships the camera, they need to use this number, hopefully will save some time/confusion when it arrives at customs!

Good luck!

Cheers,
Kelsey W.
 
Dylan, if are you registered for GST/PST then you can get all your sales taxes refunded when you fill out your GST/PST form (quarterly or yearly). And if you register to get an importer number (which will be essentially the same as your GST number) then you will only be charged GST which, once again, you can get refunded. If you are charged duties on anything made in the US, and RED hasn't provided a certificate of origin, ask RED to send it to you and send this to FedEx where they will apply to correct what was charged in *duties* and you will eventually be refunded this amount too.
 
Hi Dylan,

I'm surprised that you'll pay taxes on the full amount. Doesn't that mean you're paying the taxes twice, since you already paid them on the original R! ? I wonder if pointing that out to the broker will change anything.

Cheers man
 
With FedEx air there are no brokerage fees for those of us in Cdn. FedEx Ground is a different (and very expensive) matter.

And yes, the GST or HST flows through at the end of year, so its just a cashflow problem (not that that's a nothing, but...)

That said, I was hoping it would just be the difference in price (not that I could figure out how it would work).
 
Dylan Macleod said:
Thanks for the advice Adnan. Unfortunately I am working all week and want to use the camera on a job next week - so delaying delivery and travelling to Windsor is not an option. Cheers though.
Click to expand...


Strange that you have to pay on the full amount and not the difference after trade in - pretty sure that with all the supporting documents you can appeal the tax amount with the CBSA and get an eventual refund of the difference.

The package will come in through FedEx at Pearson and they don't charge for brokerage - but they do charge a small amount for 'carrying' the tax fee to CBSA (just got a package from RED today and the carrying fee was $10).

I hand carried my Scarlet across at Pearson, declared it and… well I won't say what happened in the customs office here on an open forum.
G.
 
Jean Déraps said:
Dylan, if are you registered for GST/PST then you can get all your sales taxes refunded when you fill out your GST/PST form (quarterly or yearly). And if you register to get an importer number (which will be essentially the same as your GST number) then you will only be charged GST which, once again, you can get refunded. If you are charged duties on anything made in the US, and RED hasn't provided a certificate of origin, ask RED to send it to you and send this to FedEx where they will apply to correct what was charged in *duties* and you will eventually be refunded this amount too.
Click to expand...
Haven't gotten the final statement from brokerage - but if they do charge duty - i'd love that reference number Jean. If you come across it. Cheers! Assuming the EPIC is 100% manufactured in the US (the Redone wasn't). Thanks!
 
Anthony Gratl said:
Hi Dylan,

I'm surprised that you'll pay taxes on the full amount. Doesn't that mean you're paying the taxes twice, since you already paid them on the original R! ? I wonder if pointing that out to the broker will change anything.

Cheers man
Click to expand...

Big conversation with the brokerage guy. He totally understood the breakdown and conveyed it to the customs officer. But still charged. Thankfully I'll get it back when I do my year end!
 
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