CCLS DUTY DEFERRAL PROGRAM
By outsourcing to a Canadian fulfillment centre like CCLS, eCommerce brands can take advantage of Canada's Duty Deferral program, which allows for the deferment of duties and taxes on imported goods warehoused in Canada. CCLS has the expertise and resources to manage the Duty Deferral process, including filing the necessary paperwork and ensuring compliance with all regulations. By outsourcing Duty Deferral to CCLS, eCommerce brands can benefit from improved cash flow, reduced costs, and streamlined logistics while focusing on growing their business.
WHAT IS THE CBSA DUTY DEFERRAL PROGRAM?
The Canada Border Services Agency (CBSA) Duty Deferral Program is designed to help businesses that import and/or export goods by deferring the payment of duties. This is intended to increase businesses' cash flow, reducing the financial burden associated with importing and exporting goods.
The Duty Deferral Program consists of three sub-programs:
Duty Drawback Program: This allows businesses to receive a refund of duties previously paid on imported goods, provided that the goods are subsequently exported.
Duty Relief Program: This enables businesses to import goods without paying duties as long as the goods are later exported.
Bonded Warehouse Program: This program allows goods to be stored, processed, or used without paying duties as long as they remain in the bonded warehouse. Duties are only required to be paid if the goods are released into the Canadian market.
Participating in these programs generally requires meeting specific requirements and procedures, including submitting the appropriate forms and keeping accurate records. The CBSA reserves the right to audit participants to ensure compliance with these requirements.
ADVANTAGES OF USING THE CBSA DUTY DEFERRAL PROGRAM
The Canada Border Services Agency (CBSA) Duty Deferral Program offers several advantages for businesses that import and/or export goods.
- Improved Cash Flow: Deferring or eliminating the payment of duties can significantly improve a business's cash flow. This is particularly beneficial for businesses that import goods for processing and re-exporting.
- Increased Competitiveness: If a company imports goods for re-export, deferring or avoiding duties can reduce the overall cost of goods, making the company's products more price competitive in the international market.
- Flexible Storage Options: The Bonded Warehouse Program allows storing goods for an extended period without requiring to pay duties immediately. This can be especially helpful when dealing with market conditions or demand uncertainty.
- Duty Refunds: Through the Duty Drawback Program, businesses can obtain refunds for duties paid on goods that are later exported. This can be a significant source of cost savings, especially for companies involved in large-scale importing and exporting.
- Encourages International Trade: The Duty Deferral Program encourages businesses to engage in international trade by reducing the costs associated with importing and exporting goods.
While these advantages can be significant, they have specific compliance requirements. The CBSA mandates accurate record-keeping and regular reporting and reserves the right to conduct audits.
Non-compliance can result in penalties, so businesses should understand all the requirements before participating in the program.
CCLS has the expertise and resources to manage your Duty Deferral process. Contact one of our trade specialists today to learn more.
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