10 Ways in Which Canadian Customs Brokers can Help Your Business
Companies exporting and importing goods to and from Canada to other countries usually have to deal with the customs authorities to get clearances for their goods. To deal with these things, companies usually opt for the services of an experienced customs broker.
With the presence of multifaceted processes, importing into and exporting out of Canada needs a clear understanding of various regulations and laws. Failing to understand the complex and varied compliance needs, many companies can get trapped in potential pitfalls.
Therefore, if you are importing or exporting goods through Canadian borders, it is better to avail the services of an experienced Canadian Customs Broker. Customs Brokerage Services in Canada require a license which is obtained from the Canada Border Services Agency (CBSA) in order to function within the country. The basic responsibilities of brokers offering customs brokerage services are - gathering necessary documentation, reviewing it for accuracy, ensuring compliance with customs regulations, and preparing a declaration on behalf of clients to the customs.
10 Reasons Why You Need a Canadian Customs Broker
With more than 200,000 importers and numerous exporters dealing in customs brokerage annually, customs clearance and other related activities are bound to get confusing for someone who has no knowledge of the same. Customs brokerage involves various functions such as gathering information in the required format, clearing cargo on the behalf of importer, and in the process complying with all necessary customs procedures. There are several advantages and disadvantages of Canadian customs brokerage services, and the responsibility of facing the challenges in customs brokerage largely rests with them.
Here are some of the ways by which professional Canadian customs brokers can support your business -
- Customs Brokers understand when and how Goods and Services Tax (GST) need to be paid. For example, in case of exports, GST is not applicable at all. The brokers are always well aware of the regulations, and are quick at identifying whether a particular export is susceptible to be 'zero rated' or not
- You stand to avoid adverse tax implications by securing the services of a Canadian customs broker. From recovering GST paid on imports in a quick and time-efficient manner, to ensuring there are no other sunk costs, professional customs brokers ensure that whole process is as quick and easy as possible
- Certain issues arise when non-resident firms plan to import cargo into Canada under their names. Therefore, one has to decide whether or not to go for a permanent establishment, and hiring an experienced Customs broker is ideal in such conditions because they help you make informed decisions
- Customs brokers help you properly identify the party who can become the importer of record. This helps in preventing tax liabilities on both the actual importer and the importer of record, while easily obtaining an ITC for the GST paid during import
- Canadian Customs Brokers have in-depth knowledge of Standard Trade Terms (INCOTERMS), which in turn have vital implications for GST and duties paid. Without a professional customs broker, you can end up showing higher-than-necessary customs value on which duty will be levied. This can lead to extra expenses and unanticipated risks for you
- Care and caution is required with regards to Drop Shipment Rules, wherein a non-resident vendor gets goods directly delivered to the customer from a manufacturer or wholesaler without keeping any goods in the inventory. Many businesses unknowingly misapply such rules, which create trouble during GST audits. Customs brokers ensure misapplication of Drop Shipment Rules is altogether avoided
- Customs brokers ensure they stick to the prescribed method of valuation to determine the value for duty (VFD). In Canada, the primary method of determining VFD is the transaction value method. Failure in properly determining VFD can lead to duty miscalculations, reassessments, interest charges etc.
- Non-compliance with government obligations draws penalties under Administrative Monetary Penalty System (AMPS). Customs brokers help you avoid penalization by performing proper calculations
- Canadian transfer pricing methodologies are different from income tax rules and therefore caution must be exercised in considering these. With their in-depth knowledge of the system and the various regulations, customs brokers ensure strict compliance to all rules
- When a buyer and seller are related, there is a possibility of additional complications. Canadian customs brokers ensure such intercompany services are treated carefully. This allows for faster and more accurate VFD calculations, and reduces risk for all parties involved
The Growing Significance of Canadian Customs Brokerage Services
Today, as more and more shipments cross Canadian borders, the need for Customs brokers is also increasing steadily. Customs brokerage is not only about collecting valid information and leveraging it and transforming such information into vital business intelligence, but also offering certain specialized assistance helping importers and exporters build fresh product lines, venture into newer markets, and assess global changes, apart from bringing downs costs.
For moving goods quickly and for handling government and legal procedures, to generally supervising the safe and prompt shipment and delivery processes, customs brokerage services play an important role.
Address Challenges in Customs Brokerage by Outsourcing to Flatworld Solutions Today!
A company looking for ways to avoid unnecessary brokerage fees may choose to get all procedures done in-house-but this involves spending precious time. However, one can also outsource back-office tasks to a reliable service provider who is aware of the processes as well as the advantages and disadvantages of Canadian Customs Brokerage Services. This ensures better workforce productivity and ROI for the company as well.
By partnering with us, you can stay up-to-date with all Canadian Customs regulatory and policy changes, without having to dedicate resources for the same. We are an associate member of CSCB and our customs brokerage services have helped countless business organizations. Get into a strategic partnership with us for efficiently handling all your customs brokerage requirements!
Contact us to outsource Canadian Customs Brokerage Services!