Understanding Duty Calculation for Cross-Border Shopping

Cross-border shoppers often wonder about the calculation of duties when importing goods into Canada from US retailers. Understanding how duties are calculated can help individuals make informed decisions and budget accordingly. In this article, we'll delve into the factors influencing duty calculation and provide clarity on this important aspect of cross-border shopping.

Factors Influencing Duty Calculation:

1. Tariff Classification: Duties are primarily determined by the Harmonized System (HS) tariff classification of imported goods. Each product is assigned a specific HS code based on its category, characteristics, materials, country of manufacture and others.

2. Tariff Rates: Once the HS code is determined, the applicable tariff rate is identified. Tariff rates vary depending on the product category. Find the tariff rate for your product category here.

3. Value of the Goods: Duties are calculated based on the value of the imported goods, including the cost of the product, shipping fees, insurance, and any applicable taxes. The value is typically expressed in Canadian dollars.

4. Additional Fees: In addition to duties, imported goods may be subject to other fees, such as the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST), as well as customs processing fees.

Calculating Duties:

To calculate duties on imported goods, follow these steps:

1. Determine the HS Code: Identify the appropriate HS code for the imported product based on its characteristics and intended use.

2. Find the Tariff Rate: Consult the Canada Tariff Finder or the Customs Tariff to determine the applicable tariff rate for the HS code.

3. Calculate the Duty Amount: Multiply the value of the imported goods (in CAD) by the applicable tariff rate to calculate the duty amount.

4. Consider Additional Fees: Factor in any additional fees, such as taxes and customs processing fees, to determine the total amount owed.

Let's see a calculation example:

Let's suppose you are importing a pair of shoes with a value of $100 CAD and they were made in Germany.

For products made in the CUSMA countries (Canada, US or Mexico), there are no duties.

In case it was made somewhere else, the applicable tariff rate for footwear is 20 percent. 

In this case, the duty amount would be calculated as follows:

Duty Amount = Value of Goods x Tariff Rate

= $100 CAD x 20%

= $20 CAD

The duty amount for the imported shoes would be $20 CAD.

You can calculate your duties and taxes with the CBSA calculator here.