To legally conduct international trade in Canada, businesses must register for an import/export account with the Canada Revenue Agency (CRA). This ensures compliance with customs rules enforced by the Canada Border Services Agency (CBSA).
1. The Import/Export Account
- Business Number (BN) Required: All businesses involved in trade must first have a nine-digit Business Number (BN) issued by the CRA. This number is also used for other programs (like payroll and GST/HST).
- The RM Extension: The import/export designation is a specific extension added to your BN, typically ending in RM0001 (e.g., $123456789\text{RM}0001$).
- Purpose: This registration allows the CBSA to monitor trade activity, apply correct tariffs, and ensure businesses follow trade regulations.
2. How to Register
The CRA primarily handles the registration process and involves three steps:
- Step 1: Get a Business Number (BN): If you don’t have one, register with the CRA. Corporations often get this automatically upon incorporation.
- Step 2: Add the RM Account: Once you have a BN, you can add the import/export (RM) program.
- Methods: You can register online via the CRA’s Business Registration Online (BRO) portal, call the CRA, or use an authorized customs broker.
- Step 3: Submit Business Details: You must provide information such as your legal name, business type, the nature of the goods you’ll trade, contact information, and an estimated trade volume.
3. Responsibilities After Registration
Once your RM account is approved, you must maintain compliance by:
- Declaring Goods: Properly reporting all imports and exports on required customs forms.
- Paying Taxes and Duties: Remitting applicable duties, tariffs, and GST/HST on imported goods.
- Record Keeping: Keeping all transaction records (invoices, forms, manifests) accurate and available in Canada for at least six years.
- Updating Information: Promptly reporting any changes to your business details (name, address) to the CRA.
4. Important Trade Considerations
- Customs Brokers: Many businesses hire licensed customs brokers to simplify the process of complex documentation, tariff classification, and clearance.
- Extra Permits: Certain regulated items (e.g., firearms, agricultural products) require additional permits from specific government agencies.
- GST/HST: GST/HST is due on most imports; however, importers can claim Input Tax Credits (ITCs) if the goods are intended for commercial use.
Conclusion
Registering and maintaining compliance is crucial for seamless trade operations and to prevent penalties or shipment delays. Failure to comply or misreporting data can result in the suspension of your trading privileges.
For tailored guidance on registering your import/export account and meeting compliance standards in Canada, contact Platform Expand for professional assistance.