Ultimate Guides
Ultimate Guide - Importing Goods From China To Canada 2021

Ultimate Guide - Importing Goods From China To Canada 2021

Looking to import goods from China to Canada? We put together a comprehensive guide with everything you need to know, from import documents to taxes & duties and more!

8min, 25 August 2021
Bookairfreight’s Key Takeaways:

• Letting a freight forwarder take care of import documents and coordinating your customs clearance, you can save a huge amount of time and money

• If your products are tax exempt, you must quote the tax exemption code on your import documentation from China.

• Duty costs always needs to be converted from the currency indicated on the invoice to Canadian dollars.

Step 1. Get A Business Number


How to get a business number

To be able to import commercial goods into Canada, you first need to obtain a Business Number from the Canada Revenue Agency (CRA), and file for an import/export account.


You can do this either as a business or an individual.


Bookairfreight’s Tips:

• An import/export license or account is free of charge and can usually be obtained in a matter of minutes

• GST is payable on most goods at the time of importation so registration will be necessary further down the line anyways.


If you already have a Business Number, you can simply add an import/export account to your existing Number.


You can register for a new Business Number or add an import/export account to an existing Number here.


While doing this, you should also register for your GST (Goods And Services Tax).




Step 2. Check For Regulations, Permits Or Restrictions

canada import regulation


Prohibited Goods


Certain goods are completely prohibited from being imported from China to Canada.


Check the full list of prohibited goods to ensure your products don’t fall into this category.


Goods That Are Subject To Extra Permits, Restrictions Or Regulations


Certain goods have extra government requirements to import from China to Canada that need the appropriate certificate/permit.


The Canada Border Services Agency's (CBSA) Reference List for Importers lists some of the most commonly imported commodities that may require permits and/or certificates. More info here.


The CBSA also imposes labelling requirements on certain types of goods. More info here.


Certain goods are subject to measures under the Special Import Measures Act (SIMA).


Check index of products subject to SIMA to see if it is applicable to your products from China.



Step 3. Classify Your Goods And Calculate Your Import Duties, Taxes

canada import duties and tax


Your goods have a tariff classification number called Harmonized System (HS).This number will be used to determine the rate of duty you will need to pay to import from China to Canada.



Find your product’s tariff number by following these steps:


Access the CBSA customs tariff page

On the latest version of the Tariff, click on 'Customs Tariff by chapter'

Find your product class in the table and access the PDF containing the tariff rates

Inside the PDF, there will be another table of individual products. Go through them until you find your specific product

Once you find your specific product, its tariff number will be listed on the left under ‘Tariff Item’


Determine the rate of duty applicable to your goods


Inside the same document you found your tariff number, on the right, there are two columns: ‘MFN (Most-Favoured-Nation) Tariff’ and ‘Applicable Preferential Tariffs’.


China and Canada are entitled to use the rate of duty specified under the ‘MFN Tariff’ column.


China does not have a trade agreement with Canada, so the tariff rate applicable to your product will only be the one listed in the ‘MFN Tariff’ column.


This tariff rate  represents the rate of duty you will have to pay Customs for importing your goods from China to Canada.


Determine the value of the goods you are importing


Now that you have determined your product’s tariff classification number and its rate of duty, you need to work out your product’s value for duty.


Value for duty is the amount you paid for your goods. But this doesn’t refer to just the price you paid for the products themselves.


It also includes:

Packing costs

Shipping costs

Insurance


All of these costs may or may not be included in the invoice received from your manufacturer in China.


If they are not, make sure to add them in order to arrive at the correct value for duty of your goods.

Example Duty Calculation


Price of Products (including packaging): $2000

Cost of Packing: $100

Cost of Shipping: $500

Cost of Insurance: $40

Rate of Duty: 4%


Value For Duty: 2000 + 100 +500 + 40 = $2640


Customs Duty Payable: 4% * $2640 = $105.6


Determine if your goods are subject to the goods and services tax (GST) or excise tax


Most goods imported for commercial use are subject to the services tax (GST), which is 5% of the value for tax.


Value for tax is calculated in the same way as value for duty, except it also includes the customs duty payable.


Value For Tax = Cost Of Products + Cost of Packaging + Cost of Shipping + Insurance + Customs Duty Payable


Example GST Calculation


Value For Tax = Value For Duty ($2640) + Customs Duty Payable ($105.6) = $2745.6


GST = 5% * 2745.6 = $137.28


Total of Customs Duty and GST Payable = $242.88


Some products are tax exempt. You can find the list of non-taxable goods in Schedule VI and Schedule VII of the Excise Tax Act.


Step 4. Find A Freight Forwarder

shipping from china to canada


Import documents & coordinating your customs clearance, as well as shipping your goods are quite complex and difficult. Which is why importers hire freight forwarders to do it.


Their role is to get your goods shipped quickly, safely and cheaply from your factory in China to your warehouse in Canada.


They coordinate between your factory, freight carriers, and customs brokers to handle all of your import documents, transportation, and customs clearance.



Import Documents & Customs Clearance


The freight forwarder will coordinate with your factory in China to create all of the necessary import documents, then with customs authorities to get these documents submitted and approved.


Necessary documents when importing from China to Canada include:


Commercial Invoice (Canada Customs Invoice)

Packing List

Bill of Landing

Certificate of Origin (when applicable)

Cargo Control Document

Your Import/export license acquired in the first step of this guide

Any special permits or certifications your product requires



Your freight forwarder will check in with you periodically to request specific information they need and to keep you up to date on the status of your import.


The invoice you’ll receive from the freight forwarder will contain everything from shipping to insurance and taxes & duties payable.



Shipping


The freight forwarder will advise you on the best shipping method from China to Canada based on:

Volume of goods or products

Time requirements

Safety requirements

Frequency of shipments

Budget


The two options for freight transportation are air freight and ocean freight.



For a better understanding of each of their advantages and disadvantages, check out the guide we wrote on this topic specifically.


Your freight forwarder will work with your factory and freight carriers to coordinate the transportation of your goods, including:


Pickup by truck from your factory

Delivery to the port of export (China)

Transport by plane/ship from the port of export (China) to the port of import (Canada)

Pickup by truck from the port of import (Canada)

Delivery to your warehouse/address


Different carriers will be required for different lengths of the import journey, so it can get quite complicated.


Luckily, this is what freight forwarders do.


How To Find A Freight Forwarder


Look no further than Bookairfreight!


We specialize in China to Canada import shipments and work with a network of tier 1 freight forwarders to guarantee you the best rates on the market.


We’re a truly modern online freight marketplace, offering a multitude of benefits, including:


Instant quotes

Free insurance of up to US$10,000 on every shipment

Online user dashboard where you can book, track and manage your shipments in one place

• Outstanding customer care and support


Work with the freight partner you deserve. Get a quote now!


Closing Thoughts




Importing from China to Canada can seem too much to handle at first, but if you find the right partners it becomes much easier.


Delegating different parts of the importing process will allow you to spend less time on operations and more time on the areas that help grow your business.


We wish you the best of luck, and if you have any questions whatsoever feel free to shoot us a message.

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Mikhyle Moos

Local Digital Marketing manager and content creator at Bookairfreight. I am someone who loves literature, but here to simplify interesting topics within the logistics industry that are easy to digest.

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