What is the import duty on cars in Canada?

Navigating Import Duties on Cars in Canada

When importing automobiles into Canada, understanding the import duty framework is crucial. These duties vary based on the origin of the vehicle, with preferential rates applied to countries with which Canada has free trade agreements.

Standard Import Duty

As a general rule, a standard import duty of 6.1% of the vehicle’s value applies. This duty is levied on cars imported from countries outside of Canada’s free trade zones.

Preferential Import Duties

Canada has implemented free trade agreements with several countries, including the United States, Mexico, and South Korea. These agreements provide preferential import duty rates for vehicles originating from these countries.

For example, under the North American Free Trade Agreement (NAFTA), cars manufactured in the United States or Mexico are exempt from import duties when imported into Canada.

Determining the Applicable Import Duty

To determine the applicable import duty on a specific car, you must first identify the country of origin. This information is typically found on the vehicle’s title or registration document.

Once you have determined the country of origin, you can refer to Canada’s Customs Tariff website to find the applicable import duty rate.

Additional Considerations

In addition to import duties, you may also be required to pay other fees and taxes, such as:

• Goods and Services Tax (GST): 5%
• Provincial Sales Tax (PST): Varies by province
• Excise Tax: Applicable to certain vehicles (e.g., luxury cars)

Conclusion

Understanding Canada’s import duty framework is essential for ensuring smooth and cost-effective importation of vehicles. By leveraging preferential rates and considering additional fees, you can navigate the customs process effectively and minimize your overall costs.