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Don't let this term fool you. This is a favourite tactic used by many stealership to confuse you. Remember that you also
pay most of these when you buy a new car in Canada already. The various fees and taxes are described below. In
addition you could be subject to various temporary insurance costs and inspection fee costs. These are covered
elsewhere.
Remember that anyone buying a new car in Canada will be paying taxes 1,4,5 and 6 anyway but the tax load for those fees are actually lower when importing from the US since the vehicle is considerably cheaper.
1. GST TAX. Whenever any vehicle (new or used) is imported into Canada it is subject to a GST tax of 5%. You pay this tax immediately to Canada Customs agents at the time of entry into Canada. [This is nothing new, Canadians already pay GST on any new car purchase and can also be applied to any used vehicle purchased at a registered car dealer.]
2. IMPORT DUTY. An Import Duty may also be payable at the same time. Duty is only applicable to non-NAFTA vehicles and is calculated at 6.1%. regardless of their country of origin. NAFTA cars are vehicles that have been manufactured or have been assembled in Canada/US/Mexico with a minimum of 55% content. A "NAFTA" vehicle is exempt of ANY tariffs, duties or taxes when sold in Canada/US/Mexico. RULE OF THUMB: If in doubt, a "NAFTA" vehicle can be easily determined by looking at the VIN number. If the first character of the VIN is a NUMBER then it is DUTY FREE. If the first character is a letter, the vehicle is subject to a 6.1% Import Duty.
NOTE: The above two fees 1. and 2. are calculated by Canada Customs by converting the US price on your bill of sale at the daily exchange rate set by the Bank of Canada and posted by Canada Customs. Don't fret, the exchange rate has no markup, you simply pay the posted rate and bypass the banks 2-3% markup (spread).
3. RIV FEE. In order to process a US vehicle, the Canadian Registrar of Imported Vehicles (RIV) collects a fee of approximately $205 as the vehicle processing charge. . This fee can be paid immediately to Canada Customs of if you are fortunate to live near the RIV office, you may choose to waive the payment at the border and pay if in person at the RIV office. Paying in person reduces the typical 10-day processing time to mere minutes. This fee applies to EVERY vehicle imported into Canada regardless of it's age. See separate entries on RIV import regulations and the two RIV forms needed for importing.
4. AIR CONDITIONING TAX. Additionally, like any new vehicle purchased in Canada, a $100 Air Conditioning tax is also payable upon entry into Canada.
5. GAS GUZZLER TAX. As of March 19, 2007 the Canadian Federal government introduced a new excise tax on fuel-inefficient vehicles. This applies to ALL new vehicles purchased in Canada or imported from the US. For a complete explanation of this tax click this CRA weblink. Automobiles that have a weighted average fuel consumption rating of 13 or more litres per 100 kilometres will be subject to the excise tax at the following rates:
* at least 13 but less than 14 litres per 100 kilometres, $1,000;
* at least 14 but less than 15 litres per 100 kilometres, $2,000;
* at least 15 but less than 16 litres per 100 kilometres, $3,000; and
* 16 or more litres per 100 kilometres, $4,000.
Click on these links for specific model year breakdown: 2007, 2008, 2009, 2010, 2011, 2012
NOTE: Upon entering Canada with your vehicle, fees 1 to 5 are combined and paid immediately at the Customs Office.
Canada Customs accepts all forms of payment; Cash, Cheque, Money Orders, Interac & all major Credit Cards.
6. PROVINCIAL SALES TAX. Once the vehicle is successfully imported, provincial sales tax is payable at the time of registration in Canada. This is based on the current tax rate for your respective jurisdiction. It should be calculated at the government exchange rate prevailing in the hour that you register the car, but in practice many provincial licensing agents use the official Canada Customs receipt to calculate provincial taxation.
Residents of the territories and Alberta pay no provincial sales tax.
Some jurisdictions can impose "clean air" or "safety certificates" requirements prior to registration. In many cases having your vendor write "NEW VEHICLE" on the Bill of Sale can eliminate the need for such testing.
Remember that anyone buying a new car in Canada will be paying taxes 1,4,5 and 6 anyway but the tax load for those fees are actually lower when importing from the US since the vehicle is considerably cheaper.
1. GST TAX. Whenever any vehicle (new or used) is imported into Canada it is subject to a GST tax of 5%. You pay this tax immediately to Canada Customs agents at the time of entry into Canada. [This is nothing new, Canadians already pay GST on any new car purchase and can also be applied to any used vehicle purchased at a registered car dealer.]
2. IMPORT DUTY. An Import Duty may also be payable at the same time. Duty is only applicable to non-NAFTA vehicles and is calculated at 6.1%. regardless of their country of origin. NAFTA cars are vehicles that have been manufactured or have been assembled in Canada/US/Mexico with a minimum of 55% content. A "NAFTA" vehicle is exempt of ANY tariffs, duties or taxes when sold in Canada/US/Mexico. RULE OF THUMB: If in doubt, a "NAFTA" vehicle can be easily determined by looking at the VIN number. If the first character of the VIN is a NUMBER then it is DUTY FREE. If the first character is a letter, the vehicle is subject to a 6.1% Import Duty.
NOTE: The above two fees 1. and 2. are calculated by Canada Customs by converting the US price on your bill of sale at the daily exchange rate set by the Bank of Canada and posted by Canada Customs. Don't fret, the exchange rate has no markup, you simply pay the posted rate and bypass the banks 2-3% markup (spread).
3. RIV FEE. In order to process a US vehicle, the Canadian Registrar of Imported Vehicles (RIV) collects a fee of approximately $205 as the vehicle processing charge. . This fee can be paid immediately to Canada Customs of if you are fortunate to live near the RIV office, you may choose to waive the payment at the border and pay if in person at the RIV office. Paying in person reduces the typical 10-day processing time to mere minutes. This fee applies to EVERY vehicle imported into Canada regardless of it's age. See separate entries on RIV import regulations and the two RIV forms needed for importing.
4. AIR CONDITIONING TAX. Additionally, like any new vehicle purchased in Canada, a $100 Air Conditioning tax is also payable upon entry into Canada.
5. GAS GUZZLER TAX. As of March 19, 2007 the Canadian Federal government introduced a new excise tax on fuel-inefficient vehicles. This applies to ALL new vehicles purchased in Canada or imported from the US. For a complete explanation of this tax click this CRA weblink. Automobiles that have a weighted average fuel consumption rating of 13 or more litres per 100 kilometres will be subject to the excise tax at the following rates:
* at least 13 but less than 14 litres per 100 kilometres, $1,000;
* at least 14 but less than 15 litres per 100 kilometres, $2,000;
* at least 15 but less than 16 litres per 100 kilometres, $3,000; and
* 16 or more litres per 100 kilometres, $4,000.
Click on these links for specific model year breakdown: 2007, 2008, 2009, 2010, 2011, 2012
NOTE: Upon entering Canada with your vehicle, fees 1 to 5 are combined and paid immediately at the Customs Office.
Canada Customs accepts all forms of payment; Cash, Cheque, Money Orders, Interac & all major Credit Cards.
6. PROVINCIAL SALES TAX. Once the vehicle is successfully imported, provincial sales tax is payable at the time of registration in Canada. This is based on the current tax rate for your respective jurisdiction. It should be calculated at the government exchange rate prevailing in the hour that you register the car, but in practice many provincial licensing agents use the official Canada Customs receipt to calculate provincial taxation.
Residents of the territories and Alberta pay no provincial sales tax.
Some jurisdictions can impose "clean air" or "safety certificates" requirements prior to registration. In many cases having your vendor write "NEW VEHICLE" on the Bill of Sale can eliminate the need for such testing.