If you declared the value at $2500.00 USD I would say that most of that $700 is made up of tax. At the current rate of exchange $2500.00 USD is about $3967.50 CDN, tax here in Ontario is 15%, this makes the tax portion alone $595.00 CDN. Along with some brokerage fees and the usual processing fees I can see the total hitting $700.00 no problem. In this case duties are most likely not a factor unless the NAFTA forms were not properly filled out. When things are shipped from the US to Canada by courier you are almost certainly going to end up paying your provincial and federal sales tax.
Your canadian buddy should have known better. You must admit that charging off of the insured rate is fair. However, canadian customs are a bunch of pigs. See if they will ship it back to you and call the deal off? That's why a lot of folks won't ship to canada.
This is a sticky wicket indeed. As a Canuck who has done a few cross-border deals (both ways) I can advise that indeed since NAFTA that any audio gear manufactured within the US and Canada is entitled to traverse our border without duty. But its just duty thats involved not taxes. As the unit was destined for Ontario, Canada Customs would have take the $2500 US converted it to Canadian funds at a ratio of 1.6 and then tacked on about 15.5% taxes (7% GST which is Federal and 8% cumulative Provincial). Doing the math the buyer should be looking at $2500 X 1.6 X 15.5% = $620 Canadian funds. So the $700 seems somewhat high but is in the ball park. Can't get away from taxes irregardless where the unit was manufactured or even originally purchased!!!
I will get to the tax issue a bit later but first...
Not a big deal if you follow common sense. Chances of UPS or FED EX to LOSE the package is almost nil, with the sophisticated tracking system they have. It's actually fun to see your package on the Net as it's getting closer to it's destination.
The real problem is that there is a chance that they will damage it more than lose it. In the case of a $ 2,500.00 amplifier, a $ 500.00 insured value would be more than enough to repair some damaged part on the amp. Of course, double-boxing makes the chances for damage academic, but it can happen still as we all know, especially with speakers.
Now, if a $ 2,500.00 amlifier is insured for $ 500.00, then any taxes or duties applicable should be on this same amount of $ 500.00 The absence of an invoice in the shipment means that the value will be based on the insured value. If there is an invoice, then this will serve as the basis for establishing the tax. You figure the rest yourself.....
Happy shipping to Canada all....
i buy used AudiogoN from the US and have only paid the GST (7%), how does Ontario get its hands on 7%?
Brokerage is the other component that must be paid.
The math is adding up. Is Ontario is due their % tax? Fortunately I live in Alberta where provincial/state tax doesn't exist as it does in the rest of Canada.
Buyer beware unless the seller ageeded to pay the fees then shame on the seller for accepting without knowing the real cost.
Sayas - like you I am residing in Alberta and we fortunately don't pay any PST but all other provinces do pay more than just the GST...
A costly "error" by the purchaser but hopefully he'll be happy with the unit.
A note to Canuck buyers purchasing Canadian made products from US sellers - really check around within Canada before plunking down US greenbacks as for the most part Canuck audio products typically sell cheaper here at retail (take a new Bryston 4B-SST amp: retails in the US at $2700 US and $3300 in Canada in Canuck bucks - you do the math...) therefore if you can find what you are looking for "locally" you'll end up saving money and reduce the potential for this type of situation to occur.
I agree with the above. I have had many items sent from the U.S. to Ontario. No duty ... but PST and GST are unavoidable. FedEx and UPS then add their own brokerage fees.
Therefore, the $700 sounds about right. Mind you, if I bought the same used item from an Audiogoner in Canada, there would be no PST/GST or brokerage fees.
I won't do international trades. Just imagine if you had a dispute! Years ago I invested in a Canadian company that provided equipment to the mining trade. I made a quick fortune. That is until I tried to collect. The Canadian goverment decide to nationalize the firm and sized their assests. I ended up with less than I started with. This is Canada, not some third world South American regime victim to a coupd'e'tat. Or so I thought. Not to get too political, but I was against NAFTA then, and I still am.
If you think 15% tax is crazy, we are now being charged $7.00 for a pack of smokes...and now our government is seriously considering LEGALIZING the selling and use of marijuana! So to all our neighbours to the south...we're not low-balling you, our own government is.
How much are you taxed for goods shipped into the US?
Canadian buyers would be better off buying used gear within Canada. Failing that, Fed Ex is a much better carrier than UPS (who rob you blind on customs paperwork charges). If you don't already frequent Canuck Audiomart it's worth a look:
Be very careful when you ship to any other country with a lower declared value! If there should be damage, it is the perfect excuse for the shipping company to pay you only the value of what has been declared. Plus, Customs will sometimes check the insured value to see if it jives (they are not that dumb, they've seen it all). It should be very clear between buyer and seller that the seller takes responsibility for any excess value should there be damage.
Also, don't assume that damage can be fixed for a low amount. Speakers are the good example here. Try getting a replacement cost on a pair of cracked B&W Nautilus 801 cabinets and you'll find out what I mean (yes, this happened to us, the cabinets come from Germany and cost more $$ than the speakers sell for on the used market!).
Same thing with chassis metalwork, often more expensive to rebuild the amp than the amp sold for used.
The Sound Broker
Thanks folks for the advice and guidance. Well, it looks like the tax was the reason for the chage. Hard to believe it can be so high. Just to answer Dogpile's question on the comparable tax/customs charge for goods into the US - I got a Supratek Syrah preamp about three weeks ago from Australia. I received the preamp and got my customs bill about two weeks later. The charge was 4.5%. Not bad, if you ask me. Certainly not prohibitive, wheras the Canadian charge does seem prohibitive. Well, thanks again for the info and advice. Cheers,
Actually, just wanted to ask one more clarifying question - does the fact that the preamp was originally made in Canada have any bearing on the tax charge, or would it need to be paid irrespective of country of origin? Thanks!!
So far as I know, it does not make a difference.
C'est las vie!
It doesn't matter where the unit was made as it pertains to tax. Be it a Thor preamp from the US or a Sonic Frontiers from Canada your buyer was going to pay the taxes because the unit was coming into Canada. The Governments "pretend" like you were buying it locally where you would have paid the tax anyways. Now European and I assume Australian stuff as well would be subject to I believe 6% duties which are factored into the cost of the unit prior to administering the tax rates!
As I pointed out earlier - if you reside on the northern side of the border you should try all avenues before purchasing from outside the country. This negates all applicable taxes, duties and brokerage fees. All you'll have to pay is the freight assuming you are buying from a private individual as opposed to a dealer of used gear.
Gear availability is tied into demographics - there are 10 Americans for every Canadian and it only stands to reason that the greatest supply of used gear will be available from the USA.
Wow, I had no idea Canadian rates were so high. I appreciate the heads-up. I got a pre amp from Australia with a declared value of $2500 and my bill was around $75.