Tax & Trade Blog

As we wrote about previously, on May 27, 2023 the Canada Border Services Agency (the “CBSA”) proposed amendments to close what they termed “loopholes” allowing certain importers to use a lower value for duty (“VFD”) than what CBSA thought was appropriate. 

The draft changes to Canada’s Valuation for Duty Regulations (the “Regulations”) generated significant feedback from interested parties, but over one year later importers are left wondering about the status of the proposed amendments.

Since the GST was first implemented in 1991, a continual source of misconception has been that the GST represents a single tax.  In fact, there are potentially four different applications of the GST – i.e., reflected in Divisions II through IV.1 of the Excise Tax Act (“ETA”). When combined with the provincial HST component, further permutations can occur.

A major source of work (because of mistakes made by Canadian residents and non-residents alike) has been the application of Divisions II and III of the ETA, which are reviewed here, and which can quite counterintuitively result in the application of both a 5% GST and up-to a 15% GST/HST on one single supply of goods.  Effectively, tax applying twice on a single transaction!