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Everything You Need to Know About Canada’s Duty Drawback Program

If you are a small business looking to import goods into Canada, you probably have questions about duty and taxes, such as: How do I calculate the duty when importing from US to Canada? How much is duty in Canada? When do I have to pay the duty?

There are many questions to consider, and we know it can be overwhelming. For this reason, we created this guide on everything you need to know about Canada’s Duty Drawback Program to help you navigate importing into Canada.

If you are not sure how to get started with imports and exports, there are ways to calculate duty. The most popular is probably the Canadian Border Services Agency (CBSA) Duty Calculator, available for free online use.

There are also incentives created by the Government of Canada to reduce the amount of duty you pay on goods. This incentive program is commonly known as the Duty Drawback Program, a trade incentive program which allows Canadian importers like you to apply for a refund on duty from the US to Canada

What is the Duty Drawback Program?

The Duty Drawback Program is a program created by the CBSA to allow importers to get some or all of the duties and taxes they paid back. It was created to offset the costs of importing these goods and give importers incentive to keep importing. 

How do I know if my business qualifies for the duty drawback program?

Your business could qualify for the Duty Drawback Program based on the way that your goods are imported or exported, rather than the specific type of goods you work with. 

To qualify, your goods must be either: imported and then later exported without being altered, used to produce other goods for export, or obsolete or surplus goods that are later destroyed. 

If your goods fall into one of these categories, and are not liquor or spirits, you will qualify for the program. You must apply within four years of your goods arriving in Canada, or within five years of your goods being destroyed. If you aren’t sure, you can always ask your customs broker. 

How do I apply?

If you discover that you meet the criteria, you can apply for the program using the K32 – Drawback Claim form on the Government of Canada’s website. 

However, if your goods are obsolete or surplus, you will need to apply using the E15 – Certificate of Destruction/Exportation form on the Government of Canada’s website. 

What does this mean for me?

If you are actively importing or exporting goods or are getting ready to start, you should double check this program and see whether or not your goods will qualify. If you are about to begin importing goods to Canada, you will want to keep track of the duties and taxes, and ask your customs broker to do the same. This way, you’ll know for sure how much to report and what you will qualify for when you want to see if you can get duties back. 

Don’t overpay for duties on your goods. A great customs broker will make sure you get back as much of your duties as possible.

The bottom line

At Welke, we always put our customers first and treat you like family. We will do everything in our power to import your goods efficiently and cost-effectively and keep you informed throughout the entire process. We’ll help you qualify and apply for the Duty Drawback Program.

Ready to get started? Get a quote from Welke.