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How to fight a Revenue Canada imposed tax on an imported product?
October 17, 2006 6:12 AM   Subscribe

My sig others import business got tagged at the border by RevCan for a 74% import duty. What can we do about this?

My wife runs a small import business bringing in a specialized line of footwear actually made in China, but imported through the US. Up to this point in time the shipments have been small (less than 1500 dollars value), and so have not raised any issues with RevCan. Due to a recent upsurge in business, a shipment was sent whose total value was about 2500 dollars Cdn, and the (rodentile ignoramuses @) Revenue Canada slapped a 74%duty on the boots. According to UPS the shipment was "red flagged".

Our understanding is that now RevCan will red flag every shipment, and apply this 74% import duty on each shipment.

So, how can we fight this insanity designed to make welfare cases of us? Obviously, keeping the value of the shipments at less than 1500 dollars is inhibiting the growth of her business.
posted by fox_terrier_guy to Law & Government (13 answers total) 1 user marked this as a favorite
 
On what basis do you think you can fight this? I'm not sure I understand what you're after - do you think that this particular commercial import doesn't fall under the requirement to pay duty on many or most commercial imports? Has your SO started a business without any legal consultation at all so that she understands her rights and responsibilities?
posted by mikel at 6:34 AM on October 17, 2006


Can you buy Canadian-made shoes instead?
posted by unixrat at 6:38 AM on October 17, 2006


I'm not worried about paying duty. The issue of FAIR taxation and DUE PROCESS is one that I am concerned about. My comment has to do with finding out the due process, so see if there is an avenue for appeal. Perhaps there isn't, but doesn't it seem odd that on one hand a shipment of 1500 dollars constitutes small with a duty of 24%, but a shipment of 1501 dollars is worthy of a 74 % duty?



Kindly note previous message written out of frustration. Must write, then read, wait THEN send.
posted by fox_terrier_guy at 6:43 AM on October 17, 2006


Are you sure it's Revenue Canada? Regardless, the Canadian Border Services Agency has information for small importers. Poke around there - at the top level of the site there is a menu item devoted to importers that seems on-point.

Also, it might be useful in future to use a Customs Broker.
posted by mikel at 6:56 AM on October 17, 2006 [1 favorite]


Taxation systems are full of arbitrary numbers, fox_terrier_guy. It sucks that you have to keep your shipments under $x, but 'fighting the insanity' is somewhat akin to fighting the insanity of a higher tax bracket on income over $100,000... it sounds like you managed to fly under their radar for a while, and are now upset that they've noticed you operating outside the prescribed rules and are going to hold you to them? Or am I missing something?
posted by Mayor West at 6:57 AM on October 17, 2006


You could try getting legal advice, but unless there is a loophole or some special exemption you don't know about, you're not going to get out of paying your taxes.
posted by hoverboards don't work on water at 7:06 AM on October 17, 2006


Who levied the tariff: Canada Border Services Agency or Canada Revenue Agency?

I would give Border Services a call. I don't see a tariff over 20% for shoes in the regs, and I think shoe imports from the US are listed as tariff-free for importers.

Plus, look into getting a customs broker to handle this in future.
posted by tranquileye at 7:28 AM on October 17, 2006


Customs folks can be complete idiots. Recently I got a single-invoice shipment (in South Africa, from Germany) which was spread across 3 boxes. The idiots (eejits) charged me the full duty on each box (yes, triple the legal amount). Everything was clearly labled as 1 invoice for 3 boxes. I sent documents and explanation to the authorities and recieved an appropriate refund.

In Germany I was once charged duty on the value of a package PLUS the value of the shipping. Because Deutsche Post is also a bunch of clowns, they were unable to deliver packages to my address, so had to come UPS, at their international rates. The resulting tax was about twice the value of the goods. I didn't try to contest that, my German is inadequat.

You have to find out what you should pay, and see if that is the amount you did pay. If you paid correctly, you're out of luck.
posted by Goofyy at 7:34 AM on October 17, 2006


tranquileye writes "I think shoe imports from the US are listed as tariff-free for importers. "

Not if they come from China originally. I've run into this problem with machine tools. I've had to pay the Chinese tarriff rate for stuff I've bought from the States because the country of origin was China and there was no value add made in the States. IE: the US company essentially shipped me the same box they recieved from China. If the US company assembled half a dozen componets from China and then shipped the completed unit to me I would have had to pay US tarrif rates (0%).
posted by Mitheral at 10:10 AM on October 17, 2006


Can you split the shipment? Instead of shipping one $3000 container, ship 3 x $1000 ones since that seems to pacify the border people..
posted by aeighty at 10:51 AM on October 17, 2006


I've just been stung for UK import duty on a watch. The administration fee for levying the charge was higher than the charge. Customs departments everywhere are bizarre, idiosyncratic, arbitrary and unassailable.
posted by Hogshead at 11:53 AM on October 17, 2006


In Germany I was once charged duty on the value of a package PLUS the value of the shipping.

This happened to me in the UK. After further research it turned out that in the UK, at least, duty is charged as a percentage of the "landed value" which includes shipping cost. I wouldn't be surprised if it were similar in Germany.
posted by grouse at 1:38 PM on October 17, 2006


Definitely talk to a lawyer in the field and/or a customs broker. Duties and import taxes have all sorts of arcane regulations and you might find out that if it is shipped on the second Tuesday of a month whose name begins with J or A, the duty is only 5% (or something like that).
posted by winston at 8:56 PM on October 17, 2006


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