This information is the latest proposed draft, communicated by CBSA.
CBSA’s Assessment & Revenue Management
What is the difference between an Importer's Customs Broker paying duties and taxes on behalf of them to the CBSA, versus an Importer paying direct themselves?
Importers will be liable for payment as of CARM Release 2. The CBSA will not refuse payments from Customs Brokers that have agreed to make a payment on behalf of an importer; however, importers are encouraged to pay as they are liable.
Reasons to make the importer liable are for:
- financial security
- simplify account management and reconciliation for Importers and Brokers (e.g. accounts are clear, not subdivided, and require little maintenance).
- facilitate simplified interaction between importers, customs brokers and the CBSA.
- protect the CBSA against payment defaults as financial security may be called upon to cover debt which is on the importer account, including duties, taxes, re-assessments, administrative monetary penalties (AMPS) and other miscellaneous debt.
Will Importers be required to switch to an automated payment system?
Additional Electronic payment methods will be offered by CARM.
- Monthly account balances of more than $50,000 must be made electronically.
- Payments of less than $50,000 can be made in a variety of ways, depending on whether you are importing as a Cash Client, or if you hold Account Security with the CBSA.
- See https://www.cbsa-asfc.gc.ca/prog/arl-glcc/pay-paie-eng.html for more information.
How much time will Importers and Customs Brokers have to establish automated payments to CBSA?
Current methods of payment that exist today will continue, however:
- Release 1 (winter 2020/21) Importers and Customs Brokers will have access to the CARM Client Portal, which will provide additional payment options (credit card, pre-authorized debit).
- Release 2 (mid-2021), access to the CARM Client Portal will be expanded to all commercial clients and only electronic payments will be accepted. Release 2 will also necessitate changes to client systems who transact with the CBSA via electronic data interchange, the technical requirements for this are currently available in draft form, with final draft becoming available in April 2020.
If you would like a copy of the Electronic Commerce Client Requirements Document (ECCRD) for CARM, please contact the CBSA.CARM_Engagement-Engagement_de_la_GCRA.ASFC@cbsa-asfc.gc.ca to request a draft version.
What is the percentage of companies in Canada that are already set up with paying online?
Since the implementation of the Accounts Receivable Ledger (ARL) in 2016, electronic payments have been steadily increasing, while payments by cheques are decreasing. For more information on today’s payment options, please see https://www.cbsa-asfc.gc.ca/prog/arl-glcc/pay-paie-eng.html.
What type of document or report will be provided by Customs and/or the Customs Broker to help identify duties and other data elements on entries?
CARM will make it easier to import goods into Canada. CARM will introduce new tools to help manage imports and will provide the ability to access and analyze import data, and view and make changes to any transactions. Brokers will receive a Customs Broker Summary Statement which will summarize the transactions, submitted by the broker, for the importers that they have been delegated authority to conduct business for.
Will the duty and GST continue to be displayed as individual line items on Customs Brokerage invoices?
Monthly Statement of Account (SOA) will be issued to the account holder (BN9 or BN15). All accounting transactions will be rolled up to provide account balance and payment due date. The SOA will be summarized by transactions type and will provide revenue breakdown for declaration based transactions.
- Customs Duties
- Excise Duties
- Excise Tax
Broker will receive a Customs Broker Summary Statement. This statement will be issued only to Customs Broker (BN9). It will Include summary of transactions (declarations and payments) submitted by the Broker for each importer BN15. Payment liability is not on the broker for declarations submitted for each importer, therefore will not include payment due amount and date. Transactional information, including the breakdown above, will be available on the portal for the importer, or parties who have delegated authority to access.
Is there a “debit” option that automates the authorization process for importers?
Clients will have the option to pay using the Pre-Authorized Debit (PAD). For CARM, CBSA will obtain consent from the client to withdraw funds from the client’s bank account through the PAD registration process on the external portal. PADs are RM specific meaning an entity could establish a PAD per RM account with the CBSA.
Is the EDI option a credit option where the importer is required to push the funds through?
The CBSA already encourages all clients to make payments electronically, and monthly account balances of more than $50,000 must be made electronically. Payments of less than $50,000 can be made in a variety of ways, depending on whether you are importing as a Cash Client, or if you hold Account Security with the CBSA.
See https://www.cbsa-asfc.gc.ca/prog/arl-glcc/pay-paie-eng.html for more information. Clients will have the option to pay using the Pre-Authorized Debit (PAD) or credit card, which will be facilitated through the CARM Client Portal.
Can one Security Letter cover all company/business' multiple entities?
A surety must be obtained at the BN9 (legal entity) level. So a company that has separate associated BN9s will require separate sureties for each of these legal entities.
In addition, CARM will simplify how the CBSA will receive bonds; an Importer will obtain a bond with a Surety Company, and CARM will receive the bond via an application program interface (API) set up with the Surety Company. Or, an Importer will enter their bond information on the CARM Client Portal, and their Surety Company will be notified to validate they have a bond for the amount specified.
What are the options for importers to make payments monthly or quarterly?
Clients will have the option to pay using the Pre-Authorized Debit (PAD). For CARM, CBSA will obtain consent from the client to withdraw funds from the client’s bank account through the PAD registration process on the external portal. PADs will be monthly and correspond to the amount due on the account.
What are the risks in not paying on time?
The importer is liable for all amounts owing. Interest will be applied to transactions that are not paid on or before the payment due date. Interest charges will appear on the statement of account and will be reflected in the monthly account balance. Financial security may be called upon to cover debt, which is on the importer account, including duties, taxes, re-assessments, administrative monetary penalties (AMPS) and other miscellaneous debt. When an account becomes in arrears, a Notice of Arrears (NOA) is issued.
We will all assume this is only CAD payment all over the board in any of the payment options, correct?
All accounting transactions will be rolled up to provide account balance and payment due date. The introduction of new billing cycles and the alignment of payment due dates will eliminate current state accounting complexities for both clients and the CBSA.
What are payment requirements for Non-Resident Importers (NRIs) or U.S. Exporters of goods into Canada?
Non-resident importers (NRIs) can make payments following the standard CARM payment methods. Payments will only be accepted in Canadian dollars.
What are the GST refund options for Importers?
The CBSA does not refund GST to commercial Importers.
If you are a GST/HST registrant and the importer of record, you can claim an input tax credit (ITC) with the Canada Revenue Agency (CRA) for the GST or the federal part of the HST paid or payable if:
- the imported goods are for consumption,
- use or supply in your commercial activity;
- and you charge the GST/HST to your customers on the sale price.
If you are not a GST/HST registrant and you have overpaid duties and GST on imported goods, you can recover the overpayment by filing a CBSA adjustment.
CBSA will refund the duty part of the claim and the CRA office will send you a rebate for the GST or the federal part of the HST part of the claim.
How will a Customs Broker pay duties and GST for a Canadian entity?
Once CARM is in place, payments will be made through the CARM Client Portal, online banking, or via EDI. If a third party – Customs Broker – is expected to be paying on behalf of the importer, they will be delegated the appropriate authority to do so through the CCP. Payments are in Canadian dollars.
Are invoices per port of entry, EIN, or PO?
All accounting transactions will be rolled up to provide account balance and payment due date. All bills are at the account level and agnostic of POE.
What details or alerts will CBSA offer to Importers?
Daily Notice (DN) will be issued to importer account holders who have an EDI profile and have financial transactions on the account on the day. The following details will be provided:
- Legal entity information (Account Holder’s BN15)
- DN date
- Summary of transactions on the day
- Details of transactions on the day
DN will also be issued to customs brokers who have an EDI profile and have submitted financial transactions for importers on the day. The following details will be provided:
- Legal entity information (Customs Broker’s BN9)
- DN date
- Number of importers, importer BN15, company name
- Details of transactions on the day per importer BN15
What type of alerts or reporting will CBSA offer?
Daily Notice (DN) will be issued to importer account holders and customs brokers who have an EDI profile.
Statement of Account will be Issued to the account holder (BN9 or BN15). Customs Broker Summary Statement will be issued to Customs Broker (BN9).
In addition, transaction history will be available on the CARM portal and will provide up to date account balance, payable balance and payment due date on the account holder’s view. Functionalities available using the online transaction history via the CARM portal:
- Account balance will include all open debits and credits
- Payable balance will include open debits and credits based on release date and billing and accounting periods
- Provide payable balance in an event corrections are submitted after SOA but before payment due date
- Lists all accounting transactions along with relevant details
- Ability to filter transactions based on billing periods, date range, filer or transaction type
What are the registration requirements of an importer's business number(s)?
You would need to consider the business structure prior to enrolling in a CBSA program. A business number is a 9-digit number that is unique to a legal entity. The CBSA program account is a 15-digit number i.e. XXX-XXX-XXX-RM0001, XXX-XXX-XXX-RM0002, attached to the business number and is used for business activities that must be reported to the CBSA.