Updated Checked by the Tax-Services.ca editorial team How we check
To account for international shipping in Canada, record three separate things for every shipment: the cost of the goods, the freight and fees you paid to move them, and the tax and duty charged at the border. The CRA says GST on imports is worked out on the Canadian dollar value of the goods including duty and excise tax, and the importer of record pays it. Registrants can usually claim it back.
Who pays the tax at the border?
The owner or importer of record, according to the CRA’s page on GST/HST on imports and exports. It’s collected at the border along with any duty. Before you can import commercial goods you need a business number and an import-export program account, the RM account, which the CBSA’s CARM system uses to assess and collect duties and taxes.
Use a customs broker and they’ll often handle the paperwork, but the name on the entry still decides who owes the money. Ask who the importer of record is on every shipment. If it’s you, the tax lands in your books.
How do you work out import GST?
Start from the value, add the duty, and apply the rate. Say you import $10,000 of goods and pay $500 in duty. The tax base is $10,500. At the 5% GST rate in our GST/HST calculator that’s $525. Your landed cost for stock is $10,500 plus whatever freight and broker fees you added, and the $525 is not part of it if you can claim it back.
| Line in the books | Amount | Where it goes |
|---|---|---|
| Goods | $10,000 | Inventory or cost of goods |
| Duty | $500 | Part of landed cost |
| GST on import | $525 | Input tax credit, if you’re a registrant and use the goods in your business |
Two details depend on your shipment, so ask your broker or read the CBSA guidance: whether freight enters the value for duty in your case, and how provincial tax applies on top of GST for your province.
Can you get the import GST back?
If you’re registered and the goods are for commercial use, yes. The CRA says you can claim an input tax credit for the tax you paid on imported goods. The credit goes on your GST/HST return, and your support for the claim is the customs paperwork. Keep it with the rest of your records, which the CRA wants held for six years from the end of the last tax year they relate to.
That’s the point where people lose money. The import paperwork gets filed under the broker’s name, or sits in an email, and the credit is claimed late or not at all. A claim generally has a time limit, which for most registrants is four years from the end of the reporting period, and you can’t rebuild a customs document from memory.
What about goods you ship out of Canada?
Exports can be zero-rated, which means 0% tax while you still claim credits on your costs. The CRA describes paths such as the supplier shipping the goods abroad through a common carrier, mail or courier, or a buyer who exports them promptly. You must keep satisfactory evidence that the goods really left. On a shipment worth $8,000, the same sale inside Ontario would carry $1,040 of HST at 13%, so the paperwork matters.
Keep the carrier’s waybill or the customs export record with the invoice. If a buyer says they’ll collect and export the goods, think twice. The rules have conditions, such as the buyer not being a consumer, and you carry the burden of proof.
How does shipping change your margin?
A price that looked fine at the factory gate can shrink fast. Add freight, insurance, duty, broker fees and currency costs, then divide by units. Picture 1,000 units with $10,000 of goods, $500 of duty, $900 of freight and $150 in broker fees. The landed cost is $11,550, or $11.55 a unit. Sell at $18 and the margin is $6.45, about 36% of the price, not the 44% the factory price alone suggested.
Run your own real landed cost through the profit margin calculator and compare it with your selling price. If the margin vanishes, raise the price or change the route.
Currency is the usual surprise. Record each invoice at the rate for its date and keep the source of that rate. Agree the rate source with your accountant and use it every time. The HST reverse calculator is handy when a domestic carrier’s invoice shows a tax-included total and you need the split.
Mistakes to avoid
Booking the whole broker invoice as freight, when it includes tax and duty you’ve paid on your behalf. Claiming the same GST on both the broker’s statement and the entry. Forgetting the RM account until a shipment is sitting at the border. Using a zero-rate without proof.
A small business should also watch timing. Tax collected at the border is cash out on the day, and the credit comes back on a later return. If cash is tight, read what the CARM system offers on financial security and release before payment, since the terms differ from one importer to the next. A few bucks of cash flow can decide whether a shipment moves this week or next.
What should one shipment file contain?
- The supplier’s invoice and the currency it was issued in.
- The customs entry or release showing the importer of record, the duty and the GST paid.
- The broker’s statement, matched line by line to the entry.
- The freight bill and any insurance, with the date each was paid.
- The exchange rate used for each document and where it came from.
Put one folder, paper or digital, around each shipment. When a question comes up eighteen months later, you’ll find the whole story in one spot instead of piecing it together from email and bank statements. For exports, add the carrier’s proof that the goods left Canada.
Our sources
The import tax base, the importer-of-record rule, the input tax credit, export zero-rating and the evidence requirement come from the Canada Revenue Agency‘s GST/HST imports and exports page, read in 2026. The RM account and CARM details come from the Canada Border Services Agency. Example amounts use the 5% GST and 13% Ontario HST rates in our calculator.
Frequently asked questions
Who pays GST on imported goods?
The owner or importer of record, per the CRA. It's collected at the border with any duty.
What is import GST calculated on?
The Canadian dollar value of the goods including duty and excise tax, according to the CRA.
Can I get import GST back?
A registrant using the goods for commercial activity can claim an input tax credit for it. Keep the customs documents.
Do I need anything before I import goods for my business?
A business number and an import-export program (RM) account, which the CBSA's CARM system uses.
How do I prove an export?
Keep satisfactory evidence that the goods were exported, such as carrier or customs records. The CRA requires it for zero-rating.
All family and benefits calculators
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill