Determining Duties and Taxes

Valuation

There are many different types of valuations when shipping across borders, but the main method would be the "transaction value method". Which means the value of the goods on the Commercial Invoice must equal the value that the purchaser has paid for the goods.

For an example: If a Canadian purchaser bought a computer from a US vendor for $1000 USD, then the vendor must indicate that price on the commercial invoice, even if the vendor's cost to purchase was only $500 USD.

Proper valuation of all items in a shipment will prevent:

• Clearance delays
• Rejections or seizure by customs
• Monetary penalties

Gift Exemption

Many countries allow gifts to enter duty-free if the value of the gift is less than a certain amount and if it is not considered to be a regulated/prohibited item. Any gift valued greater than the stated value may be subject to import duties and taxes. For an example: In Canada, there is no duties and taxes assessed if the value of the gift is less than $60 CAD. For the US, it is less than $100 USD. To qualify your shipment as a gift it must:

• The shipment document must clearly have it marked as "gift" and include a details description.
• Total value of the shipment does not exceed the values listed above
• In some countries - shipment must be sent from person to person, with no company involvement or indication of involvement on the shipping documentation.

Temporary Imports

Some countries will also allow tax relief for items that are temporarily imported or exported as long as certain conditions are made. Items that are often temporarily imported/exported are:

• Tradeshows
• Conventions
• Training
  
• Assembly
• Processing
• Re-export after resale
• Repair or replacement of damaged goods

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