Doing restorations across Canadian border?

[Don_Lightfoot]

Well Rick, you are opening a real can of worms on this one. A question I generally get asked when returning from the U.S. with my car on the trailer is "Did you make any improvements to the car when you were in the United States?" I take the car over four or five times a year normally.

Now, what your customer says when returning is up to him. If he declares an amount for restoration work then he will likely be charged the 7% GST tax and will be required to pay it at the border.

If he and you decide to "fudge" the amount then that is up to the two of you. Keep in mind the Canadian Customs may follow up on the information provided.

One very important thing is to have the car registered and plated in Ontario (I think that is where you said it was). In order to do that the car would need a Provincial Safety Inspection which may be difficult given the information you sent me in a PM the other day based on the condition of the car. If you bring the car back without any Ontario Plates then a whole new can of worms will be opened. They will likely suspect the car was just purchased south of the border. Another important thing, make sure the owner is with the car each time it crosses the border. You don't need any brokerage headaches to go along with all the rest of the crap.

Now, if the owner is going to claim everything, then the plating, etc. mentioned above may not be necessary.

GENERAL NOTE - With all the old cars being purchased and then taken back across the border one way or the other, the two Customs Agencies are getting wise as they know all the prices being declared are being fudged. I have just heard a rumour in the last week or two that Canadian Customs will require an appraisal from the United States source area and then another one once it gets up here. Taxes will then be based on those figures. This is not really relative to your circumstance, but thought I would throw it in to give you an idea of what's going on these days.

Bottom line - do your homework in advance and contact both Canadian and American Customs Agencies to know exactly what is involved. Probably a good idea to have the owner do this.

Good luck pal.

[Lynn]

"Excuse me,... but I do believe that sucks a$$"

Eric Cartman

[Chevy454]

What in the heck is Canada taxing? Is it a capital gains type tax, or property tax, or because of the exhange rate, or...?? This slow-thinking Hillbilly can't see how/why Canada gets to tax anything in this situation...

[Don_Lightfoot]

Darn right it sucks. Welcome to the tax capital of North America. The 7% Goods & Services Tax (GST) is charged on virtually everything. That is in addition to any Provincial tax which varies from Province to Province. For example, here in Ontario, if you buy a $10 pair of socks the total ends up to be $11.50 ($.70 GST and $.80 Provincial Sales Tax added).

To follow up on my previous post. Not sure if the GST would be payable on parts and labor or just parts. I am not in a position to confirm if Provincial Sales Tax would need to be paid when returning as well. Also, since the owner is a non resident of Minnesota, he could make application to the State of Minnesota for re-imbursement of any State Tax paid for the goods and services. A complex matter, but can be worked out and costs estimated once the Customs information is available.

[John Brown]

Another thing that sucks big time is the "brokerage fee" Don mentioned. I sent a $175.00 part to Canada by UPS. UPS charged the guy $45.00 Canadian to collect the 7% GST. If I had sent the same package by postal service, the brokerage fee would have only been $5.00. UPS rips um off real bad. If you are gonna send anything to Canada, send it from the post office.

[Jeff Murphy]

Don,

As a Canadian, I should know this stuff, but I don't. Does the government offer reduced tax rates on era original parts? This might help on Rick's question, albeit not on the labor (or labour ). In England, they have a program that allows reduced duty on original date correct parts for antique cars (less than 5% tax or so vs. 17.6% VAT on normal purchases). You have to apply in advance and be able to demonstrate that they are era correct by date codes, etc.

They used to have the same for cars (which my COPO qualified for). One of the reason's the ZL-1 is staying in the States, thanks to the largesse of the Super Car Workshop, is that they have recently made it a lot harder to avoid the tax on complete historical vehicles.

[Don_Lightfoot]

John - very true, but even the Postal Service "sometimes" has the same brokerage fee, although it is usually a lot less than the Shipping Companies.

Jeff - I'll try to explain your question as best I can. Important to distinguish between duty and tax, here's an overview:

1) - Old, original parts are not subject to "duty" if they are over a certain age (25 years???), same as cars. However, the tax is still payable.

2) - New, reproduction parts for the old cars "should be" subject to both duty and taxes.

Parts up here are just too expensive which is why I order from the U.S. and have them shipped to a buddy in Syracuse. I'm down there several times a year and bring them back with me. On new, reproduction parts I tell the Customs officer they are for a 35 year old vehicle and they normally don't charge me duty, just the tax. It's just too miniscule for them to pursue that kind of stuff for the amounts involved. Obviusly, if they want to be a PITA, they could check each individual part.

Hopefully this provides some clarification.

[Zedder]

There are no "duties" on parts/cars made in North America anymore, however there are taxes to be paid on the declared value of the car or parts - which the onus to prove the price is fair market value rests on the person importing the car/part. All "purchases" made for whatever reason (even the tires used in Jeff's example) are taxable at 7% GST and 8% PST for all hard goods; labor is taxable at 7% only. So yes Rick, the person sending a Canadian car into the US for work will have to pay taxes on EVERYTHING they pay for. Many people lie about the value and if they don't get caught, they're home free. If they do get caught, Canada Customs can confiscate the vehicle or parts FOR GOOD! This is why I would restore a car in the US before I brought it into Canada because I would only have to declare the value of the finished car, which as we know can be all over the place with these old relics

[SS427]

Sounds like we may have it solved. The owner has been checking it out and now is not too concerned and will have someone do all the paperwork. Thank you for all the responses.