Moving from US to Canada - duty on our XC70 = $$$$!

[eraas]

Next month I'll be moving the family from Boston MA (USA) to Montreal QC (Canada). On a recent trip to Montreal, the customs agent indicated that when I moved our car, I would have to pay (on the value minus $10,000) 6% excise tax plus 7% federal GST followed by 8% provincial GST when registering the car in Quebec.

I'm quite familiar with these taxes, having lived in Quebec before, but for some reason never expected that a car I've owned for a couple of years might be subject to import taxes. If the car (a 2003 XC70 with 40k miles) is worth - say - $30k CDN, I would owe 21% tax on the $20,000 above $10k. This will be $4,200... ouch!

Has anyone been through this before? I'm trying to figure out how the car's value is determined and at what point this amount is due, as I'll be making many trips back and forth in the course of the move.

Any insights or similar experiences appreciated,

e

[jmoser]

How do you think they pay for that 'Free' national health care up there?

[eraas]

On the other hand, my savings on child care will pay for the car tax in about two months, so maybe I shouldn't complain too loudly ;)

e

[bs2005ca]

Hi there:
I am a Canadian from Toronto.
I often import vehicles from US to Canada.
If that XC70 is your own personal vehicle, which mean you had it for awhile.
I don't think you have to pay that much of taxes, you might can save at least one, not sure the GST or the PST, just declare as your our personal vehicle due to relocation.
You can find out the detail from 'Registra of Motor Vehicle Canada' , phone number 1-888-848-8240.
Hope that helps.

[Raynald]

eraas,

You will find all the information you need on the Société de l'assurance automobile du Québec (http://www.saaq.gouv.qc.ca/en/vehicle_registration/sales_tax.html) website.

As for your vehicle market value, it should be around CDN$27,000, on which you'll have only 7.5% QST (no GST). As far as I know, there is no other taxes of fees on personnal vehicle, but I may be wrong. An email to the SAAQ (http://www.saaq.gouv.qc.ca/en/reach_us/email.html) should do the trick...

And welcome back! :)

[eraas]

bs2005ca, Raynald,

Thanks for the sources of info - I'm definitely looking forward to moving back to Canada, although we'll miss Boston. The higher taxes in Quebec are *way* more than offset for us by the lower costs of child care, schools, and housing (and we've looked into this carefully). There are of course also a bunch of intangible advantages for us, like being closer to family etc. We're very lucky to have lived in both Boston and Montreal, but the cost of living in Boston for anyone with kids is much, much higher - at least in my experience.

Will keep you posted on any interesting car-related aspects of this moving saga.

Regards,

e

[Sandman]

If your wife is immigrating to Canada (never had residence in CAN) and the car is hers (in her name) there is no tax or duty, only an admin fee. It was like $182 for my 01 v70xc last spring here in BC.

[eraas]

Hmm. Don't think we can go this route - my wife is Canadian and she does not have a driving license, so probably would not be possible to register the car in her name anyway (she's been meaning to learn to drive forever, but that's another story!)

Still, I've been non-resident (of Canada) for over seven years - I'd have thought the car could be considered a personal effect that was moving with me. However the impression I got was that this was true - but only up to $10,000 worth of car. Beyond that was considered a taxable luxury.

I definitely need to get more info - my scare was just based on the statement of one customs agent at the Stanstead crossing between Vermont and Quebec.

[eraas]

If the vehicle meets all the necessary requirements, you will in most cases still have to pay duties. Calculating the total costs must start with the value of the vehicle (expressed in Canadian dollars). Generally, your purchase price will be acceptable to Canada Customs for this purpose. Based on this value, duty will be assessed. GST is applied on the combination of the value, the duty and any excise taxes payable. (excise tax is payable if the vehicle has air conditioning, or when the weight of the vehicle exceeds certain limits.)

Under the Free Trade Agreement (FTA), duty on motor vehicles of U.S. and/or Canadian origin will ge gradually eliminated by January 1, 1998. Motor vehicles imported from the United States which are not of Canadian and/or U.S. origin, will continue to be subject to duty under the Most-Favoured-Nation (MFN) tariff, or other applicable tariff, and will not be eligible for the FTA duty rate.

For example, under the FTA, until December 31, 1991 a four-year -old Mercedes-Benz may be imported into Canada from the United States, but it would be subject to the MFN tariff and not the lower FTA duty rate. GST and excise taxes where applicable, remain payable regardless of the origin of the vehicle. You would be wise to discuss the specifics of your particular case beforehand with Canada Customs

[eraas]

Importing Vehicles into Canada

...There are special duty-free benefits for former residence of Canada who have resided abroad for a minimum of one year and who have owned, been in possession of, and used a vehicle for at least six months during that period of time. ????

PERSONAL AND HOUSEHOLD EFFECTS AND VEHICLES

(returning or former resident of Canada)

These effects include furniture, furnishings, silverware, linen, jewelry, appliances, books, musical instruments, family heirlooms, antiques, private collections of coins, stamps or works of art, power tools and other hobby items, boats, outboard engines and the trailers that carry them, vacation trailers and even private aircraft.
NOTE: Prefabricated houses, large trailers used as residences and mobile homes do not qualify and are subject to regular duty and taxes. $10,000 LIMIT

Any single item of personal or household effects, including automobiles, that was acquired after March 31, 1977, and is valued at more than $10,000 is subject to regular duty and taxes on the excess amount.

TIME AND OWNERSHIP REQUIREMENTS

If you have been residing outside Canada for at least one year but less than five years, your personal and household effects must have been in your ownership, possession and used for at least six months before you re-enter Canada. Bills of sale or shipping documents will help you prove that the goods meet these requirements.

After an absence of five years or more, the goods must have been in your ownership, possession and used, but the six months' minimum time requirement does not apply.

NOTE: A leased vehicle is not considered to be "owned" by the former resident, and is therefore not admissible.

If you acquire goods just before leaving and do not use them but have them shipped to Canada, they will be fully dutiable and taxable on arrival.

[lkonge]

I regularly import Volvo's from US to Canada. The duty is federal, and is 6% you have to pay it, no way around it. As far as GST, you shouldn't have to pay it as you were an american resident at the time. PST, you'll have to pay when you insure the vehicle.

[eraas]

I actually managed to speak to a customs agent at one of the QC/Vermont borders by phone - below is what she said. There is also a web page called "Importing a Vehicle to Canada" at http://www.cbsa-asfc.gc.ca/E/pub/cp/rc4140/README.html

1) You have to contact the registry of vehicle importation to see if your vehicle is importable (2003 Volvo should be ok)

2) You have to advise US Customs that you are exporting the car - you need to get the original title docs to them 72hrs/3 business days in advance of your move. Note that the requirement to hold the title means that you must pay off any car loan in full before exporting the car.

3) You need to get an appraisal of vehicle from dealer, which will generally be based on the Kelly Blue Book value. This will determine the value for duty and taxes.

4) You need a "recall clearance letter" from the dealer or manufacturer - the Dealer must be a certified Volvo dealer and the letter has to have the Volvo corporate logo on it. Basically it has to say all the recall work has been done.

5) It can help to get a letter from dealer or mfg attesting that it conforms to Canadian standards. It will still probably be necessary to have the car inspected - the Canadian Registry of Imported Vehicles contracts this to Canadian Tire outlets. The car could fail for things like being able to turn off the daytime running lights (I think they have to be "always on" in Canada). Some stuff like this might just be a VADIS update to change the region? Also things like the airbag warnings have to be in both English and French.

6) There is a $224 fee for registering the car with the registry of imported vehicles. Outside of Quebec the fee is lower - $209 I think.

7) If the car has air conditioning, there is a $100 excise tax on this

8) You have to pay 7%GST on the value over $10k (in Canadian dollars)

9) You have to pay 6.1% duty on amount over $10k

10) 7.5% provincial sales tax will be due when you register the car in Quebec - you can't register the car without completing the other steps first.

The total tax is 20.6% of the value of the car over $10k plus the $100 AC excise. For example the value of our 2003 XC70 is probably about $27CDN, so the tax due will be $3,502. I think the cost of registering the car in Quebec will be about $100.

The total cost of importing the car will then be about $3,500 + $100 + $224 + $100 = $3,924. This does not include the cost of the inspection.

It's still much cheaper to import this car than to sell it and buy a similar used one in Quebec, I think.

I wonder if you can just promise to resell the car in the US when you're done with it to avoid the taxes? I can pay it, but obviously it's kind of a pain...

e

[bouvier]

When my brother moved to Canada from the US he found a dealer in the US who made a deal with a dealer in Canada and they worked out a swap for about the same $$ as the taxes and he got a year newer car.

Bouvier

[eraas]

Thanks for the reply -


I regularly import Volvo's from US to Canada. The duty is federal, and is 6% you have to pay it, no way around it. As far as GST, you shouldn't have to pay it as you were an american resident at the time. PST, you'll have to pay when you insure the vehicle.

Hmmm. Are they late model XC70's, or old 240's and 850's? For older cars the "over $10k" might get you by. I think I know what the answer is going to be though... (you're importing new cars:)

Is it for personal moves?

[Prepo]

Perhaps yhou could just bring it into Canada by declaring yourself at the border as being on vacation as I am currently doing legitimately in the USA from Canada. This could give you some breathing space before you make the final decision. Just a thought to add to your options.

[eraas]

Perhaps yhou could just bring it into Canada by declaring yourself at the border as being on vacation as I am currently doing legitimately in the USA from Canada. This could give you some breathing space before you make the final decision. Just a thought to add to your options.

Yeah - I go back and forth a lot already and of course for temporary trips it's no problem. It's just that at some point I'll probably need to register it in Quebec and all this stuff will have to be dealt with sooner or later. Thanks for the suggestion - I have about a month and a half left before the real move... will probably drive back and forth a few times before then.

[eraas]

When my brother moved to Canada from the US he found a dealer in the US who made a deal with a dealer in Canada and they worked out a swap for about the same $$ as the taxes and he got a year newer car.


This is really interesting - it's pretty much exactly what I'd like to do, as it would save us all the inspections and possible future difficulties selling a US spec vehicle in Canada (odometer in miles etc.)

I called the dealer (a real Volvo dealer) from whom we bought the car though and asked if he ever heard of anything like this. He was very doubtful and seemed to regard it as kind of questionable/shady on the part of any dealer who would do it. Said stuff like "they could lose their Volvo franchise"...

I have no idea why this would be a problem - I can say that, as a customer, it would be a huge convenience... my Boston dealer is always sending out flyers about how badly they need used vehicles as trades to maintain their inventory, which would indicate they ought to be happy to do such a deal. Of course you have to take that with a grain of salt, as the idea is that you'll buy a new Volvo when you trade, which is the whole idea.

Thanks for the suggestion - if you could provide any more info on the dealers involved (perhaps by PM since this might be construed as "shady" by some) I'd be very grateful.

e

[eraas]

Another aspect of this that I realized is that if a car is manufactured in the USA or Mexico, there will be no duty or tax on importation into Canada due to the North American Free Trade Agreement.

There are a number of decent Toyotas etc. that are made in the US (correct me if I'm wrong), and the thought did cross my mind that if I really wanted to avoid the taxes and duty I could trade the XC70 for some US made vehicle like this. However I like our car too much and anyway don't feel like the additional hassle of car shopping when we're already getting ready for a big move...

Nonetheless it could be a factor to consider for any Canadians moving to the US on a temporary basis.

I'm more or less resigned to the fact that this will cost me around $4000CDN.

e

[AWD*V70XC]

Duty is seldom payable on your car when moving from country to country, unless you are importing a new car. What is a very common payment is GST, VAT or whatever they call it where you live. As soon as you move the car you will have to get the local NTC/MOT done before you can tax and insure it. Most law enforcement agencies will allow you drive it in your new country on your old plates as it looks like you are on vacation which allows you have the car in 'that' country for up to 6 months without extentions.

Most goverment websites have detailed info on moving your car to their country which is different to moving your personal household effects. If you still want to have a one to one with someone don't ring their national advice line becasue they only read it from the 'net and tell you no more than you already know, but go to a border crossing which deals with these kind of imports and speak to a senior officer, they can learn you a lot if you are open, honest and dumb.

The Motor Vehicle Safety Act and Regulations require that all vehicles imported into Canada comply, at the time of importation, with the Canada Motor Vehicle Safety Standards in effect on the date the vehicle was manufactured. Vehicles manufactured for sale in countries other than Canada and the United States do not comply with the requirements of the Canada Motor Vehicle Safety Act, CANNOT be altered to comply and CANNOT be imported into Canada. The only exceptions to this rule are vehicles fifteen (15) years old or older as determined by the month and year in which the vehicle was manufactured and buses manufactured before January 1, 1971.

Vehicles acquired in foreign countries other than the U.S. and designed, built, tested and certified to meet either all applicable Canada Motor Vehicle Safety Standards or all applicable United States Federal Motor Vehicle Safety Standards and bearing a statement of compliance label affixed by the original manufacturer, as required by the Regulations, may be eligible for importation into Canada provided the vehicle has not been altered and the certification from the original manufacturer is maintained.

If you still want to speak to someone try this crowd, (sorry don't have the website to hand but I am sure it will be under CBSA [Canadian Border Services Agency] or something similar) or try www.tc.gc.ca (http://www.tc.gc.ca/) for starters.

Transport Canada Vehicle Importation
Tower "C",
Place de Ville,
330 Sparks Steet,
Ottawa, Ontario K1A 0N5

Telephone: 1-613-998-8616

Toll Free: 1-800-333-0371


ps, don't take my word for it as the illegal importation of a motor vehicle into Canada is a criminal offence. Inadmissible vehicles will be denied entry into Canada and will be detained. All storage and disposal fees are the responsibility of you. Frightening stuff...hey

[eraas]

Thanks very much for the detailed reply!


Duty is seldom payable on your car when moving from country to country, unless you are importing a new car. What is a very common payment is GST, VAT or whatever they call it where you live. As soon as you move the car you will have to get the local NTC/MOT done before you can tax and insure it.

For Canada, this is true up to $10,000 value. Above that and you pay 6% duty plus the GST(=VAT) plus provincial sales tax (when you license the car) on the residual value.


Most law enforcement agencies will allow you drive it in your new country on your old plates as it looks like you are on vacation which allows you have the car in 'that' country for up to 6 months without extentions.

I've been driving back and forth on a regular basis with no problems under this kind of provision - I think that you have three months to license the vehicle in the province of Quebec.


Most goverment websites have detailed info on moving your car to their country which is different to moving your personal household effects. If you still want to have a one to one with someone don't ring their national advice line becasue they only read it from the 'net and tell you no more than you already know, but go to a border crossing which deals with these kind of imports and speak to a senior officer, they can learn you a lot if you are open, honest and dumb.

Dumb is key ;)

The most detailed information I found was in the PDF versions of a brochure called "Importing a Vehicle into Canada" available from the Border Service website at the following URL (which provides links to the English and French versions of the PDF file):

http://www.cbsa-asfc.gc.ca/E/pub/cp/rc4140/README.html


The Motor Vehicle Safety Act and Regulations require that all vehicles imported into Canada comply, at the time of importation, with the Canada Motor Vehicle Safety Standards in effect on the date the vehicle was manufactured. Vehicles manufactured for sale in countries other than Canada and the United States do not comply with the requirements of the Canada Motor Vehicle Safety Act, CANNOT be altered to comply and CANNOT be imported into Canada. The only exceptions to this rule are vehicles fifteen (15) years old or older as determined by the month and year in which the vehicle was manufactured and buses manufactured before January 1, 1971. Vehicles acquired in foreign countries other than the U.S. and designed, built, tested and certified to meet either all applicable Canada Motor Vehicle Safety Standards or all applicable United States Federal Motor Vehicle Safety Standards and bearing a statement of compliance label affixed by the original manufacturer, as required by the Regulations, may be eligible for importation into Canada provided the vehicle has not been altered and the certification from the original manufacturer is maintained.

Our XC70 should be fine, since it was manufactured for sale in the US. Some modifications, such as a warning about the imperial unit odometer, bilingual airbag warnings, etc. appear to be imposed routinely.


If you still want to speak to someone try this crowd, (sorry don't have the website to hand but I am sure it will be under CBSA [Canadian Border Services Agency] or something similar) or try www.tc.gc.ca (http://www.tc.gc.ca/) for starters.

Thanks for the leads - I was able to speak to someone by phone and they were able to provide more information than was available on the web site or PDF brochure (which was pretty complete but a little ambiguous in some areas).


ps, don't take my word for it as the illegal importation of a motor vehicle into Canada is a criminal offence. Inadmissible vehicles will be denied entry into Canada and will be detained. All storage and disposal fees are the responsibility of you. Frightening stuff...hey

Understood! Getting this kind of stuff wrong can certainly lead to major headaches...