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February 6, 2018
Application of price reductions to the value for duty
The Canada Border Services Agency publishes a Memorandum which outlines and explains the treatment of price reductions in determining a transaction value under the Customs Act. The transaction value will become, in most instances, the "value for duty" on which duties and taxes are calculated.
The Memorandum defines various types of price reductions and the circumstances under which they may, or may not, be used to reduce the transaction value.
In many instances, if a discount is granted prior to importation, the amount of that discount should be considered when calculating the price paid or payable for the imported goods.
However, there are several exceptions, which are explained in the Memorandum, where a discount cannot be used to reduce the transaction value for Customs purposes.
Link: Memorandum D13-4-10 Price Reductions
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