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September 12, 2018
Treatment of commissions and brokerage in the calculation of value for duty
The Canada Border Services Agency's (CBSA) Memorandum D13-4-12 provides information concerning the treatment of commissions and brokerage* when calculating the value for duty of imported goods.
Commissions and brokerage are amounts paid to intermediaries who help in the conclusion of a sale, on behalf of the vendor or on behalf of the purchaser.
Selling agents, buying agents and brokers are the intermediaries receiving these payments and it is mostly their status within the transaction that determines if their commissions or brokerage have to be added to the value for duty, according to a set of rules that are well explained in the memorandum.
Issues involving commissions and brokerage are often discovered by CBSA during audits, with costly effects for non-compliant importers.
Link: Memorandum D13-4-12 Commissions and Brokerage
Do not hesitate to contact our offices, should you require additional information.
* In this article the term "brokerage" refers to a payment made to an intermediary for its participation in concluding a contract of sale, and not to the amounts charged by a customs broker for customs clearance.
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