Calculating Canadian customs duties?

July 27, 2009 4:18 PM

CustomsFilter: I shipped something to Canada and messed up the declared value. How do I calculate what the recipient will have to pay?

I sold some used electronics to someone in Quebec. (I'm in the United States.) I just realized that I mistakenly included shipping in the cost I put on the customs form. As I understand it, he will have to pay customs taxes when receiving the package, but I'm wholly clueless about the process. I would like to reimburse the buyer for the difference between actual cost and the mistakenly-too-high cost. (The goods were worth $25, and shipping was another $25. The shipping cost was mistakenly included, so the package has a declared value of $50.)

It seems like answering this should be a quick task for Google, but the results suggest that there are actually a number of components involved and depend on things I don't understand. Can someone explain how to calculate this? There's a duty charge, and some of GST, HST, and PST, from what I have read. The recipient is in Quebec. I have no idea whether it will go Canada Post or Priority Courier, or even what the difference is.

The gory details: Shipped USPS Priority Mail; USPS form CP72 customs declaration filled out and indicates $50 value, with "Merchandise" box checked. (Not a gift.)

I'm specifically interested in the difference between a $25 and a $50 value, so that I can reimburse the buyer for the unnecessary costs, but I'm curious about how to calculate it, since I'm now curious about how this works.

posted by fogster to Work & Money (4 answers total)

The package was sent USPS, so it should arrive by Canada Post. Theoretically, the recipient will be charged a $5 handling fee, plus GST (5%) and Quebec Sales Tax (QST: 7.5%, also applied to the GST), so the difference in tax between $25 and $50 would be about $3.40 CAD.

However, there is good chance that there won't be any charge at all. Anything worth less than $20 doesn't require a tax payment and for whatever reason, many packages worth more than that seem to sail right through.
posted by ssg at 4:28 PM on July 27, 2009

It's a crapshoot. You won't be able to predict it. He may get hit with nothing. If he gets hit with GST, it's 5%. PST in Quebec is 7.5%. There is also a handling fee, which is $7 I think (in Ontario). It's flat and declared value is irrelevant.

Were I you, I'd just wait until the seller gets the item. If he gets hit with stuff, he'll probably let you know. If you're worried about bad feedback on eBay you could give him a heads-up.
posted by You Should See the Other Guy at 4:31 PM on July 27, 2009

Yeah, I would just wait and see what happens.

I've the ebay forums that if a buyer can show proof, ie a paypal invoice etc, that they paid less than the declared value on the package they can get a refund for the deference in duty charges from Canada Post. Like "You should see..." said, just give the buyer the heads up so they aren't blindsided if they do get a larger than expected duty fee.
posted by hector horace at 6:01 PM on July 27, 2009

It will arrive with an invoice from customs for the taxes stuck to the parcel. On the back of the invoice is the form for requesting a refund of overpayment. All the instructions are there. The buyer can print out the ebay auction (and/or the paypal payment details) for evidence of the price paid and mail that along with the filled-out form.
posted by winston at 7:22 PM on July 27, 2009