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View Full Version : Doing restorations across Canadian border?


SS427
07-27-2005, 08:15 PM
Has anyone had experience sending a Canadian car to the states for a restoration? I am curious how the GST tax is handled when a car comes across that is only valued at say $30k and goes back to Canada fully restored. Does the border nail you on GST tax because of the increased value upon it's return? Thanks in advance for any help.
Rick

JChlupsa
07-27-2005, 09:05 PM
I would think if the car is still owned by the same person that any taxes have already been paid. Lets say you come south for vacation. while your down here, someone slashes all your tires. You replace them with brand new ones. They dont charge you anykind of Tax since you have new tires on the car. I know bad example but again I would think that as long as it was not sold and still in the owners name that sent it they shouldnt tax it. Also a car thats coming down for restoration would take a while and I really dont think they keep pictures of cars to see what kind of shape they return in. I would make sure that the plates/registration are up todate and wont expire while its down here though.

SS427
07-27-2005, 10:14 PM
I have just heard stories about Americans driving into Canada, installing all sorts of speed equipment and then returning to the states. The border finally saw what was going on and starting taxing the heck out of them.

I am hoping to do a restoration on a car from Canada and the owner is concerned that he will be taxed outrageously due to the increase in value. Just trying to put him at ease.
Rick

Chevy454
07-27-2005, 10:24 PM
So, you're saying they could be taxed twice? They could drive down, pay sales tax on the parts in the States...and yet you'd have to pay taxes again when you cross the border back to Canuckville, for what? Property tax? Can't be sales tax, the goods were sold in the US so that goes to Uncle Sam...could Canada really charge a tax for not doing anything? http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif

Don_Lightfoot
07-27-2005, 11:32 PM
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
07-28-2005, 12:43 AM
"Excuse me,... but I do believe that sucks a$$"

Eric Cartman

Chevy454
07-28-2005, 12:48 AM
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...http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif

Don_Lightfoot
07-28-2005, 01:23 AM
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
07-28-2005, 02:15 AM
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
07-28-2005, 02:29 AM
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 http://www.yenko.net/ubbthreads/images/graemlins/wink.gif). 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
07-28-2005, 03:28 AM
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
07-28-2005, 05:56 AM
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 http://www.yenko.net/ubbthreads/images/graemlins/naughty.gif

camarojoe
07-28-2005, 06:54 AM
[ QUOTE ]
So, you're saying they could be taxed twice? They could drive down, pay sales tax on the parts in the States...and yet you'd have to pay taxes again when you cross the border back to Canuckville, for what? Property tax? Can't be sales tax, the goods were sold in the US so that goes to Uncle Sam...could Canada really charge a tax for not doing anything? http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif

[/ QUOTE ]

Totally off subject, but think how much in taxes is paid on cars right here in the USA...EVERY time a car changes hands that same car is taxed... If a single car is bought and sold enough times, "the man" can easily end up with as much in sales taxes on the car as its original purchase price when owner #1 initially BOUGHT it... I always thought that was quite the racket, and that sales tax should only be charged on new cars, when they are first sold to customer #1...after that you're paying tax on something that was already taxed once (or twice or 3 times!) Wishful thinking I know, but it seems silly that the sale of the same car can be taxed over and over again every time its transferred to a different person.

Chevy454
07-28-2005, 06:57 AM
I agree, Joe...I've griped about that for years...used to be, in Arkansas you only paid sales tax on new cars...but I believe they changed that a couple years back.

Lynn
07-28-2005, 08:28 AM
A while back a guy (who shall remain nameless) in Canada bought some parts on ebay from a guy (who shall remain me). He asked that I mark each box "antique auto parts value less than $20 US". I told him he would be out of luck if there were a damage claim, but he was willing to take the chance.

At the time I had no idea why.

Boy, was Eric Cartman right.

Lynn

Jeff Murphy
07-28-2005, 03:04 PM
http://www.yenko.net/ubbthreads/images/graemlins/haha.gif http://www.yenko.net/ubbthreads/images/graemlins/flag.gif

retengw31
08-02-2005, 05:05 PM
I got hassled bringing a coupla bumpers back from Ontario to Detroit by the US Customs guy. He was middle Eastern descent and barely spoke English. I couldn't understand what he was asking half the time and he got pissed at me when I asked him to talk slower.

Told him the bumpers were in there when I went up earlier in the day and no one asked about them then. He finally let me go. Wouldn't even look at my passport (which I did have with me).

You'd think they'd have more important things to be concerned with than an individual with some old car parts. Then again, though, maybe I was being "profiled"...???

Canucklehead
08-02-2005, 07:46 PM
Don't you hate it when people of ethnic origin are put in a position of assistance to the general public?. Not that im being racist it's just agrivating when these people can barely speak english!. Now that alot of companys are using india as an information centre it makes it hard to get your point across.

Mr70
08-02-2005, 08:00 PM
Quoi? http://www.yenko.net/ubbthreads/images/graemlins/confused.gif

kwhizz
08-02-2005, 09:20 PM
Bought a car out of Canada thru an Estate.....had to hire an agent to get it across the border.....when I went to register the car it was noted that the title was signed by the guys wife as he had passed away.....the title was only in the man's name........See where this is going.....
the local agency wouldn't accept the paperwork and wanted verification of the Death Certificate and notorization of the wifes signature......I bought the car from a 3rd party....It's still sitting waiting for it's turn with no paperwork.......
That's my Canada story......off topic......but still a story.........

Ken http://www.yenko.net/ubbthreads/images/graemlins/flag.gif

SS427
08-03-2005, 12:54 AM
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. http://www.yenko.net/ubbthreads/images/graemlins/biggthumpup.gif

John Brown
08-03-2005, 02:42 AM
[ QUOTE ]
You'd think they'd have more important things to be concerned with than an individual with some old car parts. Then again, though, maybe I was being "profiled"...???

[/ QUOTE ]

Dave, no, they didn't want to see your profile. http://www.yenko.net/ubbthreads/images/graemlins/ooo.gif

Come to think about it, they wouldnt want to see mine either. http://www.yenko.net/ubbthreads/images/graemlins/no.gif

retengw31
08-03-2005, 03:25 PM
[ QUOTE ]
[ QUOTE ]
You'd think they'd have more important things to be concerned with than an individual with some old car parts. Then again, though, maybe I was being "profiled"...???

[/ QUOTE ]

Dave, no, they didn't want to see your profile. http://www.yenko.net/ubbthreads/images/graemlins/ooo.gif

Come to think about it, they wouldnt want to see mine either. http://www.yenko.net/ubbthreads/images/graemlins/no.gif

[/ QUOTE ]

http://www.yenko.net/ubbthreads/images/graemlins/haha.gif http://www.yenko.net/ubbthreads/images/graemlins/haha.gif http://www.yenko.net/ubbthreads/images/graemlins/haha.gif

I thought it'd be ironic if I ended up in Gitmo with girls panties on my head for trying to get back into the United States through a Mid east customs official. You pay good money for that in Vegas, I hear.