The Canada-United States-Mexico Agreement (CUSMA) introduces new de minimis thresholds for customs duties and taxes on goods imported into Canada via courier from the U.S. or Mexico. This article explains the implications of these changes, focusing specifically on Code 0017, and how it applies to shipments valued between CAD$40.01 and CAD$150.
CUSMA De Minimis Thresholds: A Breakdown
CUSMA establishes a duty-free threshold of CAD$150 for goods imported from the U.S. or Mexico by courier. While taxes still apply, this represents a significant increase from the previous CAD$20 threshold for courier imports from all countries. A separate tax-free threshold of CAD$40 also exists for goods from the U.S. or Mexico.
For clarity:
- CAD$0-CAD$20: Duty and tax-free for courier imports from any country.
- CAD$20.01-CAD$40: Duties and taxes apply for all countries except the U.S. and Mexico.
- CAD$40.01-CAD$150: Duty-free (taxes apply) for courier imports from the U.S. and Mexico only. This is where code 0017 comes into play.
- CAD$150.01+: Duties and taxes apply for all countries.
Code 0017 and its Significance
Code 0017 is a tariff code used to identify shipments eligible for the CUSMA de minimis threshold for courier imports valued between CAD$40.01 and CAD$150 from the U.S. or Mexico. It signifies that the shipment qualifies for duty-free entry but is still subject to applicable taxes.
Important Note: While code 0017 is used for this specific scenario, it does not replace the requirement for proper tariff classification of the goods. Accurate classification is still necessary for all imports.
Claiming CUSMA De Minimis Benefits: Reporting and Release
To benefit from the CUSMA de minimis thresholds, including the use of code 0017, specific procedures must be followed:
For Courier Low Value Shipment (CLVS) Program Participants:
- Claim benefits by presenting a Cargo/Release List (Consist Sheet) to the Canada Border Services Agency (CBSA).
- Separate CIRO (Courier Imports Remission Order) categories on the Cargo/Release List, including a specific category (Category C) for shipments valued between CAD$40.01 and CAD$150 from the U.S. or Mexico using code 0017.
For Non-CLVS Program Participants:
- Present a Cargo Control Document to the CBSA, clearly stating the required information, including code 0017 for eligible U.S. or Mexico shipments.
Accounting for Code 0017 Shipments
Shipments using code 0017, while duty-free, are subject to taxes and require accounting. Specific procedures apply for both CLVS and non-CLVS participants, detailed in CBSA memorandums D17-1-10 and D17-1-2. These procedures outline the necessary documentation and coding requirements for accounting purposes. Key information includes:
- Place of export (U.S. or Mexico)
- Accurate goods description
- Value for duty (CAD$40.01-CAD$150)
- Code 0017 in the appropriate field
Conclusion
Understanding the CUSMA de minimis thresholds and the role of code 0017 is crucial for businesses importing goods into Canada via courier from the U.S. or Mexico. By adhering to the proper reporting, release, and accounting procedures, importers can leverage these benefits to streamline their operations and potentially reduce costs. Consulting official CBSA resources and documentation is recommended for comprehensive guidance and compliance.
