Tax Insights: Notice to importers - Remission order provides surtax relief for certain listed US-origin goods - What to do now

October 15, 2018

Issue 2018-36

In brief

On October 11, 2018, the Department of Finance announced1 that certain steel, aluminum and other goods imported from the United States that had been charged with an import surtax imposed under the:

  • United States Surtax Order (Steel and Aluminum)
  • United States Surtax Order (Other Goods),

will be eligible for relief from that surtax. The two surtax orders had implemented a surtax of either 25% or 10% on listed US-origin goods imported into Canada beginning July 1, 2018.

As a result of the many requests made by importers for a remission of surtaxes, the Department of Finance has issued a remission order that grants immediate relief from the surtax. The relief is granted not only to those importers that had applied for a remission of surtaxes, but also to others that have imported the same goods as those listed on the remission order. 

The relief is temporary for some listed goods, and permanent for others. The temporary relief is granted until December 31, 2018, by which time it is expected that Canadian steel producers will be able to adequately meet the domestic demand for steel.

In detail

Background

Canada started imposing a retaliatory surtax on certain imported US-origin goods on July 1, 2018. For more information, see our Tax Insights “Canada imposes import surtax on certain US origin goods starting July 1, 2018” at www.pwc.com/ca/taxinsights.

On July 6, 2018, the Department of Finance outlined the processes and procedures for importers to request a remission of surtaxes on the US-origin goods that were subject to the retaliatory surtax. For more information, see our Tax Insights “Notice to importers: Potential remission of surtaxes on listed US-origin goods” at www.pwc.com/ca/taxinsights.

The remission order

The remission order issued by the Government of Canada on October 11, 2018, grants immediate relief to importers from the retaliatory surtax on goods:

  • listed in Schedule 1 and Schedule 2 of the remission order
  • classified under tariff item no. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 of the Customs Tariff, excluding those that have been exported from Canada and then subsequently re-imported into Canada
  • imported into Canada temporarily for the purposes of repair, alteration, or storage, including those classified under tariff item no. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 that have been exported from Canada

Goods listed in Schedule 1 and Schedule 2 of the remission order are those covered by the United States Surtax Order (Steel and Aluminum) that have been identified by the Government of Canada as consistently in short supply in Canada.

Schedule 1 lists goods for which relief will be granted for an indefinite period and Schedule 2 lists goods for which relief will be granted temporarily (for products imported from the United States from July 1, 2018 to December 31, 2018). The schedules are available on the Department of Finance’s website.2

Claiming a remission of surtax

To claim a remission of surtax, importers must meet many specific criteria and include all the required documentation (e.g. for goods temporarily imported into Canada, relevant documents include storage contracts, repair invoices, alteration invoices and payment for services).

The importer must also show that the goods are correctly classified in the tariff provisions captured by the remission order.

How PwC can help

We can help you review the tariff classification, value, and origin of your imports to determine if they are eligible for:

  • a remission of surtaxes payable
  • a refund of surtaxes already paid, or
  • the benefits of duties relief, including drawback if you qualify for the Duties Relief and Duty Drawback Programs

We can also help with strategic planning around tariff- and customs-related issues.


1. For more information, see:
- “Backgrounder – Relief for Canadian Businesses from Countermeasures on Certain U.S. Imports," Department of Finance (October 11, 2018) at www.fin.gc.ca/n18/data/18-090_1-eng.asp
- “Customs Notice 18-16 – United States Surtax Remission Order,” Canada Border Services Agency (October 11, 2018) at www.cbsa‑asfc.gc.ca/publications/cn-ad/cn18-16-eng.html

2. See “List of Goods Subject to Remission of Countermeasures on Certain Steel and Aluminum Goods from the U.S.,” Department of Finance (October 11, 2018) at www.fin.gc.ca/access/tt-it/rcsa-rcmaa-eng.asp 

 

Contact us

Jaime Seidner

Partner, PwC Canada

Tel: +1 416 687 8492

Eric Paton

National Indirect Tax Leader, PwC Canada

Tel: +1 416 869 2878

Jody McLean

Manager, PwC Canada

Tel: +1 416 869 2459

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