Buying a Boat in USA to Bring to Canada

[Sailormann]

A point of clarification. I have heard that there is no GST on a used boat but from what I've read you have to pay both PST and GST. Anyone know the correct answer?

This is the law:

When you bring anything that you have purchased in a foreign country into Canada you are liable for GST and PST.

The value that these taxes are calculated on varies depending upon the length of time that you have been absent from the country.

If you are away for more than 7 days, you are entitled to import $750.00 worth of goods without paying duties or taxes. You are required to pay taxes and any applicable duties on the amount that the value of the goods exceeeds the $750.00 exemption.

i.e.: You are out of Canada for more than 7 days

You buy a boat for $10,000.00

You will be required to pay tax on $9,250.00


If you are away for more than 48 hours, but less than 7 days, your exemption is $400.00 rather than $750.00

If you are away for 24 hours or more, but less than 48 hours, your exemption is $50.00


When you arrive at the border, and if you are a resident of Ontario, the CBSA will collect PST and GST on goods you import, as there is a Memorandum of Understanding between the Province of Ontario and the Federal Government. Not all provinces and territories have this Memorandum of Understanding, hence the provincial sales tax is not collected from residents of some regions.

There is no duty on boats that are manufactured in a NAFTA country (Canada, US, Mexico).

There is no duty on boats that are manufactured in Costa Rica, Israel, Chile, Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, East Time, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea -Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Western Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Sudan, Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Republic of Yemen, Zambia, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, Turks and Caicos.

Boats imported from all other countries are subject to a duty of 9.5% of the transaction value (which is the price paid or payable for the boat). This is not variable.

The duty is calculated after the currency of the transaction has been converted into Canadian Dollars.

Taxes are calculated on the sum of the transaction value and the duty.

You will need to be able to provide proof of the country of origin of the boat.

There are some situations where you may be able to import a boat that does not originate in one of the duty-free beneficiary countries without paying duty, if it has had extensive repair or refit, in one of the beneficiary countries. This needs to be assessed on a case-by-case basis and can be done at any CBSA office.

You need to provide proof of clear title to the boat - at the minimum this would be a bill of sale.

In the case of dispute regarding the value of imported goods, a Customs Officer may detain goods until proof of the transaction value has been provided. This would happen rarely, and can be easily avoided by carrying copies of pre-sale correspondence, emails, advertisments, etc. In the case of dispute, the onus rests on the CBSA to prove that the price paid for the imported goods were other than that declared.

Hope this helps

[Reluctantsailor]

Awesome information thank you!

[Sailormann]

One other thing you should know...

If you are transporting $10,000.00 or more across the border in ANY negotiable form (cheque, bank draft, cash, securities, jewellery, gold ... anything) you are required to report this to Canadian Customs when you leave the country and to US Customs when you enter the states. If you do not, the funds may be confiscated and held until you are able to prove that they are not proceeds of crime.

The easiest thing to do is arrange for a bank wire transfer.

[Rodz]

Originally Posted by Sailormann

One other thing you should know...

If you are transporting $10,000.00 or more across the border in ANY negotiable form (cheque, bank draft, cash, securities, jewellery, gold ... anything) you are required to report this to Canadian Customs when you leave the country and to US Customs when you enter the states. If you do not, the funds may be confiscated and held until you are able to prove that they are not proceeds of crime.

The easiest thing to do is arrange for a bank wire transfer.

I wouldn't say anything about money at the border ... I am speaking from my own experience. My question is: are they going to confiscate my blank cheques ?? in my cheque book??

[Lancerbye]

With the age of credit cards and email transfers I think the Canadian customs requirements are a bit outdated. Once across the border I can access cash from any bank for almost any amount. If you keep the withdrawls under $10,000 the banks do not report it. So you take out 10, 12, 20 however many withdrawls of $9,999.00 you need. This can easiest be done using a credit card and electronically redepositing money into your credit card account. This law is outdated and should be tossed out. In today's economy $10000 is not that much. Probably worth a quarter of what it was worth when the law was enacted. Stupid goverment policies can make criminals out of almost anyone.

[Vasco]

Lancerbye,

Both the US and Canada have the same reporting requirements pertaining to cash transactions. There are no restrictions pertaining to wire transfers. The requirement to report cash stems from the movement of drug money or other ill-gotten gains. I understand you can still move amounts of cash over $10000, you just have to report it and I guess undergo the scrutiny which will certainly follow. Today it would be very rare to do anything that required $10000 in cash. There are no restrictions on transactions that provide a paper trail or, more properly, an electronic trail.

[GordMay]

Originally Posted by Lancerbye

... If you keep the withdrawls under $10,000 the banks do not report it ...

Banks are not compelled, by law, to report cash transactions under $10K - but they (very often) do.
Most banks will report any "suspicious" transaction.

[jdoe71]

When I went over to finalize the deal on our boat I crossed at Sarnia. The US customs guy asked purpose of the trip so I told him I was going over to buy a boat. He asked how much cash I had and I told him I had about $200. He asked how I intended to buy a boat if I only had $200 on me. I thought maybe he was joking but his facial expression said otherwise. I told him that if the boat passed inspection we would be wiring the money. He didn't seem to understand this, so I explained transferring money from our account to the broker's account in the US.

When I came back over the Canadian customs guy asked why I had been in the States. I told him I had bought a boat, he looked out his booth behind my little Hyundai and said "so where's the boat?" So I had to explain to him it was getting shipped in a week or two. He wanted to know how much it cost and if I paid for it in cash. So same story gets repeated again.

I found it strange that the customs guys wouldn't be more aware of this. I also dislike how it is assumed you are trying to pull a fast one on them and then they work backwards from that.

[Lancerbye]

Maybe it's just me bargain hunting, but in the last several years I have purchased items (car, truck) where the seller was willing to give good discounts for cash. There are still people out there that like the feel of cash. Last transaction last year in a foreign country for $25000. Everything was above board. Just the way some people prefer to do business. I personally prefer electronic transfer.

[Vasco]

Originally Posted by jdoe71

I also dislike how it is assumed you are trying to pull a fast one on them and then they work backwards from that.

That's the customs officers job. Their main purpose is to catch people "trying to pull a fast one". They are trained to ask questions in an attempt to elicit certain information. Although most of them are quite pleasant they're not there to welcome you home.

[Sailormann]

I understand you can still move amounts of cash over $10000, you just have to report it and I guess undergo the scrutiny which will certainly follow. Today it would be very rare to do anything that required $10000 in cash. There are no restrictions on transactions that provide a paper trail or, more properly, an electronic trail..

Certainly you can move cash - as much as you want to. The law does not prevent or attempt to hinder this. However, if you are taking more than 10K across the border you need to report it. Nothing at all unreasonable about it. Not an old law - came into force about five years ago - post 9/11.

Blank cheques are not negotiable instruments. Signed ones are.

[GordMay]

The International Monetary Fund (IMF) has stated (in 1996) that the aggregate size of money laundering in the world could be somewhere between two and five percent of the world’s gross domestic product.

Using 1996 statistics, these percentages would indicate that money laundering ranged between US Dollar (USD) 590 billion and USD 1.5 trillion.
The lower figure is roughly equivalent to the value of the total output of an economy the size of Spain.

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. In response to mounting concern over money laundering, the FATF was established by the G-7 Summit that was held in Paris in 1989 (by 2007 it has expanded to its current 34 members).
More about FATF:
http://www.fatf-gafi.org/pages/0,298..._1_1_1,00.html

See the FATFs Forty Recommendations on Money Laundering:
http://www.oecd.org/document/28/0,33..._1_1_1,00.html

Originally Posted by FAFT

Recommendation 13
If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing, it should be required, directly by law or regulation, to report promptly its suspicions to the financial intelligence unit (FIU).

And:
FAFTs Nine Special Recommendations on Terrorist Financing:
http://www.oecd.org/document/9/0,334..._1_1_1,00.html

[esse0esse]

One reputable broker firm agent once proposed to have the trailer, sails, outboard motor and the boat itself on separate bill of sale...so i could save some $ on taxes by offering the boat only bill of sale at the border...

smartish...

[Sailormann]

One reputable broker firm agent once proposed to have the trailer, sails, outboard motor and the boat itself on separate bill of sale...so i could save some $ on taxes by offering the boat only bill of sale at the border...

You should be aware that CBSA can examine transactions up to four years after they have occurred.

Revenue Canada can (and often do) go back six years. Particularly if they think that someone might have imported a big-ticket item without paying what they owed. Most people don't own boats, and tend to have an inflated idea of what boats cost.

It can be hard to prove the actual sale price when you get a deal, even when you are totally honest...impossible when you start playing games.

It's a bit of a lottery... you MIGHT get away with it, but if you get caught the penalties and interest assessed by Revenue would be pretty $ub$tantial.

[knothome]

For what its worth, I bought a boat in Michigan last spring and brought her back to Georgian Bay by water. Importing was simple. Now, I did have some help. I followed the advice and used the forms in a package I got from a website but it was painless and I saved around $30k compared to buying that same boat in Canada.

I got the runaround when trying to get advice from my local broker so I figured I would google around and check with the Canada Customs agents.

I can agree about the customs folks not knowing much about importing boats. I would get a different answer every time I called back. Anyway, I googled alot for advice and ended up on Used Boats in Canada | Helpful Resources For Buying and Selling Used Boats and picked up an importing article. It was big and had more information than I needed but seemed thorough. I followed the directions and filled out the paperwork they provided and after paying my PST and GST by credit card at my local office, I was good to go.

As for payment, wire transfer to the broker's escrow account is the way to do this safely. If you are doing a private deal, just use a reputable escrow service.

I hope this helps and encourages you. I was ready to give up and use a broker until I found that advice site. My two cents worth

Come on spring!