Clarification on customs (duty, excise tax) on a ring to Canada

[h_dog2]

I just purchased an engagement ring from the USA and now am trying to figure out what I need to do to ship it here. I have done the search on PriceScope but am still a little unclear on things. I also tried calling Canada Customs and both people i spoke to were very vague on the requirements. The first girl i spoke to actually did not know, and i had to quote her the info I had in front of me. So calling all Canadians who have purchased an engagement ring from our good friends south of the 49th, I desperately need your help!

Right now, I have purchased a diamond (will be posting my great experience later on), and will also be getting the setting done at the same time. This is where my question regarding duty for it becomes the big question.

Please clarify if i am wrong on my assumptions.

- When importing a loose diamond into Canada, there is NO duty/excise tax paid for it, regardless of where it is from. Only GST and PST.

- What happens now if I get the diamond set and mounted (white gold setting)? The one customs person told me that it depends on where the diamond "originated". Is it possible to actually know exactly which country the diamond is from? What the customs person told me was if the diamond was originated in North America, then I could ship the ring (diamond set and mounted) and only pay GST/PST. BUT if the diamond originated from some other place, then i would have to pay full duty, which was quite abit (thought it was 30-40% but don't quote me on that number).

- Also, from what I have read, ship using via FEDEX EXPRESS to avoid any big brokerage fees. Will there be any unknown charges that I am missing?

For anyone who has gone through this, please give me some advice on the proper way to get the above shipped to myself in Canada. If there is no tax on loose diamonds but tax on jewellery, i might as well get them to ship the diamond out of the setting, pay duty on the setting portion, then paying someone to mount it here as the duty could be quite substantial.

Any advice or comments would be greatly appreciated, thanks in advance.

 

[canuk-gal]

HI:

PST/GST on the exchanged rate, are the only taxes you''ll pay. I have never, once, been asked about "origin". If you were buying fur, perhaps.....

I have bought diamond earrings, pendants, bracelets, and gemstone rings, across border--all set--and the taxes were totalled on the value of the item. If there is a receipt in the package and Customs sees it, that is how the value is assigned. Also, on items over $1500, FedEx asks you to sign a "one time" waiver (done via fax or email) so they can broker the package for you and get it thru Customs. On one FedEx receipt, I recall there being a small fee $7 on a $1650 pendant I bought--maybe this was a brokerage fee...I don''t know what the acronym stood for so I cannot say for "certain".

cheers--Sharon

 

[h_dog2]

Thanks for the information, if anyone else has had the same experience, please let me know.

 

[dreaming of the day]

Great thread, I am actually wondering the exact same thing and it is so hard to find the information anywhere.

 

[h_dog2]

Ok, there must be other Canadians who have purchased a ring who can give us advice on this!

 

[cdndman]

not to sure about purchasing diamonds... but I would definitely clarify the shipping with FED Ex... I have gotten items from the states shipped to me that were rather pricey items.. each time the guy came dropped it off... then I got a bill in the mail a month later for brokerage... so I''d be careful using Fed EX... the only way I know of avoiding brokerage is through USPS...

 

[LostSapphire]

I just brought my ring in from WF through Fedex.

GST & PST only.
No brokerage fees when using Fedex Express level shipping (it's covered in the cost). For what it's worth (and it's hard to get a straight answer from Customs!), my understanding from them was that loose stones have duty applied to them, whereas set jewellery does not. PST & GST is applicable no matter what format the product comes through.

I've got a thread somewhere. Give me a second and I'll get the link for you.

LS


OK HERE'S THE SCOOP:
Here's how it works with Fedex:

The parcel MUST ship using Fedex Express service level in order to not be charged Brokerage Fees.

Addressing like this is perfectly fine:
Mrs. LostSapphire
c/o ABC company
Main Street
CanuckLand

It is vital that if the parcel is shipping to a business address, that it be very clearly indicated on the waybill, the customs declaration, and the Power of Attorney that this is a "personal" shipment.

Fedex thought that perhaps the purchase that WF was referring to looked like a purchase BY a business, instead of by an individual. (You know when you use your business to purchase something so you get the 'write off'?).

They also said if the customs declaration is incorrectly filled out, it could be interpreted as a business import.

Once the parcel arrives at the Canadian Border, it goes into a hold until I fax the "One Time Power of Attorney" to them. This form gives Fedex the authority to act as my broker to bring the parcel through to Canada.

On the OTPOA, a payment option (VISA, csh, cheque, or bill to a fedex account) must be indicated. This is where they charge out the GST, PST (if applicable) and possibly duty, depending on the item. My understanding is that finished jewellery pieces do not have a duty assessed on them.

Upon clearance of the OTPOA, the parcel is put back onto the Fedex truck. The following delivery options are available, none of which will incur brokerage fees provided the shipment is Fedex Expressed:
- home delivery
- delivery to a Fedex Ship Centre Location
- delivery to my work address

Upon delivery, I will be given the total charges paid on my behalf @ Canada customs, depending on the payment arrangement I indicated on the OTPOA. If "cash" is chosen, or, no VISA card # or FEDEX account # is given, the driver will expect cash payment before leaving the parcel.

 

[h_dog2]

Thanks alot for the information.

It''s very frustrating that Canada Customs is so vague when i speak to them. in my case, if they were to charge me duty, it could mean thousands of dollars, which is a whole lot of money!! Basically, all the savings I thought I saved by purchasing on the internet (and the hassles, time, etc. that go along with it) is pretty much thrown away as I could have purchased for relatively the same price here in Canada!

I will continue to find out this info but it really sounds like other people have sent over rings without a problem with Duty, other than paying the GST/PST, 10% is better than 20-40%!!!

 

[Spirit]

sorry - don''t mean to mix you up but our experience was different. We were told that a loose diamond was duty-free, but once it is set it is a different story. Also did have to pay brokerage fees to Fedex. On the loose stone- gst and pst. We''ll get it set locally.
Still couldn''t find a stone close to this quality here so very worth it!

 

[CharmyPoo]

Why don''t you go across the border to the US and pick it up in person? I know you are suppose to declare it when you come back across the border. Now, I am not saying lie to the custom officers but a few of my friends took the risk or they just proposed after picking it up and had the girl wear it back.

 

[neatfreak]

Date: 9/26/2008 3:22:15 PM
Author: CharmyPoo
Why don''t you go across the border to the US and pick it up in person? I know you are suppose to declare it when you come back across the border. Now, I am not saying lie to the custom officers but a few of my friends took the risk or they just proposed after picking it up and had the girl wear it back.

#1 it''s illegal.

#2 Canada is a big country, maybe they don''t live near the border.

 

[CharmyPoo]

Date: 9/26/2008 3:25:21 PM
Author: neatfreak

#1 it''s illegal.

#2 Canada is a big country, maybe they don''t live near the border.

Both valid points. I just wanted to clarify that I am not telling the OP to do something illegal. I just threw out an option which I know some people have done. A trip to the US can also help him see a few diamonds before commiting to one. It will save him the trouble of shipping diamonds back and forth if it isn''t the right one.

Canada is a big country but for Canadians (like myself) travelling to the US is pretty common these days even if you don''t live near the border. You can get a round trip plane ticket between NYC/Toronto for as low as $150 on some airlines. Of course, I have no idea where the OP lives or where the vendor is so the prices can vary.

 

[h_dog2]

If I can confirm that no duty is owed for the ring, it makes no sense to do this, mainly because GST/PST is not much more different than being charged US sales tax, plus upon declaration, I would still owe GST/PST. but even without having to pay GST/PST (which i would never do anyway), we are only talking a couple percent difference.

That is why knowing if there is duty on the ring is so important to me!

 

[CharmyPoo]

As a side note, I have imported dog accessories from asia and the US in the past (for an online store). Under the free trade agreement, the general rule is that products made in the US, Mexiso, Chile, and Costa Rica are duty free (there are exceptions though). Even if the materials originally came from another country but the final product is assembled in the US - it is classified as made in the us. In the cases where you have to pay duty, there are pages of codes that determine how much duty you actually pay. We had products that could be classified different and get a different in a different duty bracket. The custom officers weren't even sure which code to apply sometimes.

I have no idea how it works for jewlery as it is classified as a luxury item and may have additional taxes beyond duty and gst/pst. I think in some cases they have an additional exercise tax applied. I found this website that has a duty calculator - http://www.diamondsonweb.com/pop/canadatax.mhtml.

 

[CharmyPoo]

I was reading on another forum and it looks like the exercise tax was eliminated or perhaps built into duty. It isn''t clear. However, it looks like some people got away with just PST/GST while others ended up paying duty as well. The variances applied to both cases of a loose diamond or set stone. Sorry, not much help but please do share the answer if you ever find out!

 

[h_dog2]

Thanks for the links, very much appreciated.

Well, i guess if it is unclear, although not my preference, I can always have the diamond shipped unmounted, with the setting in the same box. Not sure what they would charge me to mount the diamond but as long as it''s less then $500-$1000, I may have to go that route.

Or is that a bad idea?

 

[neatfreak]

Date: 9/26/2008 7:19:19 PM
Author: h_dog2
Thanks for the links, very much appreciated.


Well, i guess if it is unclear, although not my preference, I can always have the diamond shipped unmounted, with the setting in the same box. Not sure what they would charge me to mount the diamond but as long as it's less then $500-$1000, I may have to go that route.


Or is that a bad idea?

I think that's not a great idea because if anything, the duty applies to unmounted diamonds as far as I understand, meaning that you'd have to pay it on an unmounted stone regardless? I'd get it set and take the chances with the duty personally. I assume this is the case because a ring is manufactured in the USA whereas a diamond is not. So I assume a ring is duty free b/c of NAFTA and a diamond isn't. But this is just my interpretation of the law...take it with a grain of salt!

Here's a question: Have you asked the vendor you plan on purchasing from? They do this everyday, so might have a better idea than all of us...

 

[h_dog2]

neatfreak, actually, as stupid as it sounds, all loose diamonds are duty free (from everything that I have read on it) and it sounds from my discussion with Canadian Customs, that''s the case as well. Where they are vague about is regarding mounted diamonds. The vendor has shipped to Canada before but I''m not sure if they know for sure because they ship the item and never see it again or have to deal with Customs other than calling "FEDEX EXPRESS".

 

[corgan]

Just wanted to say that I had called customs about my friends WF ring and I asked them about duty. They said any diamond whether it be mounted or loose was duty free but was subject to taxes (GST and PST). If you go to any other country that sells jewelery (like the Bahamas) they always advertise that it is duty free so why would the States be any different?

 

[LostSapphire]

The other thing I was warned about (when I was thinking of driving down to Buffalo to pick up my ring and then try and "slip" it through the border - a momentary lapse of judgment), was, to keep in mind what would happen if I had to send the ring BACK to WF for a repair or something.

If I didn't have the customs paperwork for the initial purchase, when it was shipped out the 2nd time the "oops I didn't declare it" issue would rear its ugly head.

I shop on a regular basis in the states. Can easily bring things across, and yes, could probably get away with it.

But heaven help you if they catch you not declaring: your life will never be the same. (A family member was caught trying to bring a stupid sweatshirt through from Walden Galleria in Buffalo). ......Every time you try to go through the border it's like you're on the "no fly list". You will be stopped every time. They track your vehicle and usually search each time.

Totally NOT WORTH IT. And illegal and deceptive besides. I don't want to wear something on my hand that was smuggled across. I declared every penny of my purchase. And don't have to look over my shoulder....

OK rant over....now back to previously scheduled programming....

LS

 

[WinkHPD]

I asked my World Wide Distribution Coordinator and she said that if you go to the Fedex site and put in the zip of the sender and the postal code at the destination they have an approximate customs estimater. I have never done it, but that is what she told me when I asked.

We have shipped many items to Canada, but as stated above, once it leaves our hands we never see it again.

Wink

 

[edmontonflora]

Original poster, did you ever get the shipping sorted out? I live in Edmonton and I''m likely purchasing a ring from Whiteflash in the next couple of weeks(before our dollar dives any further!!!).

 

[LostSapphire]

Edmontonflora:

WF has the thing all sorted out: Vera and I worked our way through Fedex and Customes etc....

See my post above, or, just e-mail Vera.

LS

ETA: I was really anxious through the process: had I known how SMOOTHLY it goes, I'd have relaxed!

 

[edmontonflora]

Thanks so much!

 

[LostSapphire]

Date: 10/14/2008 9:22:57 PM
Author: edmontonflora
Thanks so much!

You''re welcome! It''s a piece of cake. The vital piece of information is that it must be shipped using FedexExpress level service.

Once it''s shipped and you have a tracking #, call fedex and get the fax # of where the parcel will land for customs. Ask them for the power of attorney form and have it ready. Once it hits the customs clearing centre, fax that puppy through and you''re good to go!

Good luck!

LS

 

[Dreamer_D]

I had a ring shipped to me from WF in April, and here is the "Big T" Truth! LOL!

I looked up ALL the regulations on the internet, they are readily available if you look for them.

As of April 2007 there is no longer any duty on jewelery, this includes loose and mounted stones. So have your ring shipped mounted.

I had it shipped to my home address, you do not need a business address, and with a home address you will avoid the issues that LS had. FedEx will handle the importing, all you need to do is sign a power of attorney over to them to allow them to bring it accross the border. Fed Ex will charge you PST and GST (or HST which is just a lump sum tax in certain provinces) and will require a credit card number at the time you fax them the power of attorney. They will require 2 pieces of ID to claim your ring. I actually asked them to hold the ring at their main shipping depot since I didn''t like it on a van and at the main depot it is in a safe. Then I went and picked it up! Easy peasy.

 

[CharmyPoo]

Did you get charged brokeage fees by Fedex? I have been killed by UPS in the past.