• Service: Tax, Global Indirect Tax, International Tax
  • Type: Regulatory update
  • Date: 12/2/2013

Canada - Customs agreement with EU; blanket NAFTA certificates 

December 2: Canada and the European Union entered into a Comprehensive Economic and Trade Agreement (CETA) that is intended to:
  • Remove tariffs on goods that are produced in Canada or the EU and shipped directly to one party from the other
  • Remove approximately 98% of all tariffs on goods moving between Canada and the 28 EU countries
  • Provide Canadian companies with preferential market access to the EU’s more than 500 million consumers

General preferential tariff treatment

Canada’s 2013 federal budget announced the government’s plan to modernize the General Preferential Tariff (GPT) that applies to selected countries and to withdraw GPT eligibility from 72 higher-income countries and trade-competitive countries (e.g., China, Korea, Brazil, and India) beginning 1 January 2015.

Importing companies need to review the tariff treatments for countries from which they import goods and determine how any changes could affect the duties and taxes they pay when goods cross the border. Companies also will need to begin planning now for some of the adverse affects that this loss in preferential treatment may create.

NAFTA certificates

Companies that obtain annual NAFTA certificates of origin from their suppliers on a calendar year basis need to receive all blanket NAFTA certificates for 2014 by the beginning of the year (1 January 2014).

Without the NAFTA certificate, a company cannot legally claim the preferential tariff treatment and is therefore not eligible for the benefits that it provides.

Read a November 2013 report [PDF 51 KB] prepared by the KPMG member firm in Canada: Customs—Free Trade News for Canadian Importers and Exporters

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