The Quick & Dirty Guide to Canadian Duty on Lingerie

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Canada’s lingerie market is steadily growing with homegrown brands such as Fortnight and Dear Bowie. However, Canadian brands are still a minority in the vast lingerie market. Due to our minuscule market share, most innovative lingerie companies reside outside of Canada. It is simple to order lingerie from another country via the internet; however, there may hidden costs associated with your purchase such as customs duty.

What is Customs Duty?

Customs duty – or duty for short – is a tax levied by the Canadian government when a package enters Canada containing products manufactured in other countries. This tax is prescribed under the Customs Tariff and the percentage varies depending on the nature of the product imported and where it was manufactured.

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The Customs Form

When you are billed duty on lingerie, the standard form will have five boxes:

  1. Duty
  2. GST/HST
  3. PST
  4. Handling Costs
  5. Total

Some forms may have tax on the handling costs (see Fedex form below). There may also be an excise tax box but this should remain empty as lingerie is exempt.

There are Exemptions

Certain items are exempt from duty charges based on monetary value or manufacturing country (that Made in… part of your lingerie tag). Your items are excempt if:

  • They have a declared value of $20 CAD or less
  • They are marked ‘gift’ with a declared value of $60 CAD or less
  • They are manufactured in Canada
  • They are manufactured in The United States
  • They are manufactured in Mexico

These countries fall under NAFTA: North American Free Trade Agreement, which allows these three North American countries to trade their own manufactured goods without paying customs. As the government’s website says: “amount of duty and taxes owing is impacted by where the product was manufactured and not the location where it was purchased.”

Do note, it is illegal for businesses to send merchandise marked as a ‘gift’ when you have paid for it. So do not even ask.

How Much will Duty & Taxes Cost?

Duty will vary depending on what the product is and where it was manufactured. The rule of thumb for duty is 18% to 25% of the declared value. For a more accurate estimate, use this Duty and Taxes Estimator designed by the Canadian Border Services Agency.

Taxes are a separate matter. In addition to duty, you will pay the taxes applicable to your province on the declared value. GST/HST and PST are all applicable on lingerie. Current Canadian taxes range from 5% to 15% depending on your province and/or territory.

Example: A piece of lingerie valued at $100 CAD would incur just $12 taxes (to British Columbia) if purchased under NAFTA. You would pay approximately $32.16 (excluding handling costs) for taxes AND customs duty when purchasing lingerie not covered under NAFTA. That is $20.16 of duty and $12 of tax on a $100 piece of lingerie.

Handling / Advancement / Brokerage Fee

On top of duty and taxes, you have to pay a handling fee – also known as the brokerage fee or advancement fee – to the company that carries your package: be that Canada Post, Fedex, UPS, DHL, etc. Handling fees vary depending on which carrier you use and how much your package is worth:

  • Canada Post – flat rate of $9.95
  • UPS – from $7 up to $98.90
  • DHL & Fedex – tier unknown

Example: UPS will charge $16.75 handling on lingerie valued at $40.01 (this does not include duties or taxes). DHL and Fedex do not say how much they charge for handling and this lack of transparency is quite frustrating. However, my last package from Fedex came with a $10 advancement fee with GST on the advancement fee too – funny that.

Note: This is exactly why websites that allow you to pre-pay duty at checkout actually save you money: there is no handling fee.

Acting as your own broker:

If you live near a port of entry or near a CBSA: Canadian Border Services Agency (should be one in most major cities), then you can clear your own package if it is shipping via courier (not Canada Post).

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The cost to clear your own package will – in most cases – be substantially less than paying the brokerage fees of the courier companies (it used to be $5). The steps are simple:

  • Refuse delivery
  • Get a copy of the manifest/waybill and the invoice
  • Take them down to your local CBSA and clear the package yourself
  • Take a copy of the documentation to the depot where the parcel is being held
  • The parcel will then be released into your care

Check out this article at Border Bee (from Feb 2014) for everything you need to know about clearing your own customs package. You have a RIGHT to clear your own package and this is a right that most courier companies do NOT want you to know about. They will often sidestep and outright lie to protect their own interests.

Important Notes

Always ship via postal services (Royal Mail, USPS, etc) that translate over to Canada Post. You have a much lower chance of customs even catching your package (9/10 packages skip customs when I ship CP). If they do catch it, then you still will only ever pay a flat brokerage fee unlike the tiered brokerage fees most every other company offers.

Beware of invoicing by mail. Most companies require payment before delivery: however, Fedex will often drop off a package, have you sign for it, and two-weeks to two months later bill you via mail. This way, they prevent you from refusing delivery and self-brokering your own package. As you have signed, you are forced to pay (though the legalities on them doing this are pretty grey).

Never pay tax at checkout on an item not covered under NAFTA unless the company also offers pre-paid duty. It is an all or nothing equation: you pre-pay it all at store or you pay it all upon delivery. Example: an item made in China yet purchased from an American website should never incur tax charges at checkout.

Never pay another country’s taxes on an item you are importing to Canada. Example: VAT – a European tax often built into lingerie prices – should be removed for international orders coming into Canada.

These are some of the hidden costs associated with purchasing lingerie abroad. They can be quite costly: therefore, I have attempted to lift the veil on what duty is, how much it costs, and what additional fees are involved. These are all fees you must consider when purchasing lingerie from other countries. You also deserve to know your own rights: when you should not be paying customs duty, when you should not be paying taxes, and when you can clear your own package to save on brokerage fees.


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