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What Are Import Duties and Taxes (and How Do They Affect You)?

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When you live in the United States, visiting Canada is pretty easy.  You can simply drive across the border at just about any point along the border. Sure, the line at the border can take a little while in places, but it is still pretty convenient.

But moving to Canada from the US is another thing entirely.  This involves a much more complex process, along with lots of paperwork.  And if you plan to bring most of your major possessions with you—which are of great monetary value—you have to clear all of your goods through Clearit customs brokerage clearance. This will ensure that you fill out the proper paperwork and pay all the appropriate fees.

Fees?  What Kind of Fees?

That’s a good question.  When you transport your belongings across an international border it is considered an act of importation. And because of that you have to pay the same duties, taxes, and other fees that an importer would pay.

But Why Do We Have to Pay These Fees?

Looking more closely at the process you have to note that trade duties are imposed on imported goods (and some services) as a means to restrict trade.  Also known as tariffs, these fees raise the prices on foreign goods to make them more expensive and more competitive among local goods.  This attempts to encourage consumers to purchase goods made in their country of origin.

The difference between a tariff and a duty is that a tariff is imposed in a somewhat general sense (again, to restrict importation) while a duty is more specific.  You would impose a duty as an additional tax on a specific item or a specific class of items.  You might also impose something called an import duty as a type of tax that an importer would have to pay in order to bring their foreign goods into another country for the purpose of sale.

How Do You Calculate Duties and Taxes?

How much you pay in duties and/or taxes depends on lots of things:

  • Importing country of origin
  • Exporting country
  • Category of product (apparel, automotive, electronics, etc.)
  • Number of pieces you are importing
  • Overall value of these pieces (collectively)
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