Non-Resident Importer GST/HST Recovery Calculator
You have been paying 5% GST at the border as importer of record and recovering none of it. Work out what is trapped, what registration would recover going forward, and the date the oldest claims expire.
unrecovered to date
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What You Have Been Paying
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Registered Against Not Registered
| Item | Not Registered | Registered |
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The Four-Year Window
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What Registration Involves
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Points That Decide This
What to Do Next
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Disclaimer: GST at 5% is imposed on goods imported into Canada under Division III of the Excise Tax Act and is payable by the importer at the time of importation, calculated on the value for duty plus any customs duties and applicable excise taxes. The provincial component of HST is generally not collected at the border on commercial importations of goods. Only a registrant may claim an input tax credit, and generally only the person who was liable to pay the tax on importation and who imported the goods for consumption, use or supply in the course of its commercial activities may claim the credit in respect of that tax. A non-resident person carrying on business in Canada is generally required to register where it makes taxable supplies in Canada and is not a small supplier, and a non-resident who is not required to register may in defined circumstances register voluntarily. Whether a non-resident is carrying on business in Canada for GST/HST purposes is a question of fact assessed against the factors set out in CRA policy statement P-051R2. Most registrants must claim an input tax credit in a return filed within four years after the due date of the return in which the credit could first have been claimed, with a two-year limit applying to certain listed financial institutions and larger registrants, and credits that fall outside the window are not recoverable. A non-resident registrant with no permanent establishment in Canada may be required to provide security, generally calculated as 50% of the estimated net tax, whether positive or negative, for the twelve month period after registration, subject to a minimum of CAD 5,000 and a maximum of CAD 1,000,000, and the requirement and amount are determined by the CRA. Registration also creates an obligation to charge and remit GST/HST on taxable supplies made in Canada and to file returns. Provincial sales taxes in Quebec, British Columbia, Saskatchewan and Manitoba are administered separately and are not addressed here. This page is general information, not tax advice.
Only a Registrant Can Claim It Back
You ship DDP, you are named as importer of record, and your broker pays five percent GST on every shipment. That tax is fully recoverable as an input tax credit, and you are recovering none of it because you are not registered.
It is not lost. It is trapped, and it sits there accumulating until either you register or the four-year window closes on the oldest claims.
| On $2,400,000 of Annual Imports | Amount |
|---|---|
| GST paid at the border each year | $120,000 |
| Recoverable if registered | $120,000 |
| Recovered while unregistered | Nil |
| Over two years | $240,000 sitting unrecovered |
This is usually treated as a cost of doing business, and it is not one. Foreign sellers frequently build the border GST into their landed cost model and price around it, never realising it was recoverable from the first shipment. It is one of the largest silent losses in cross-border selling.
Being Importer of Record Is What Creates the Right
The person who paid the tax on importation is the one who can claim it. If your customer is importer of record, the credit is theirs and there is nothing here for you.
DDP shipping is what puts you in the position of paying it, and it is a commercial choice made to simplify the buying experience. That choice is fine, and it only makes sense financially once you are registered.
The Four-Year Window Is the Urgent Part
Credits generally must be claimed within four years after the due date of the return in which they could first have been claimed. Beyond that they are gone permanently.
An importer who has been shipping DDP for five years has already lost the earliest year and is losing more every month. That is what turns this from a good idea into something with a date attached.
Registration is not retroactive in the way people hope, but the credits reach back. Once registered, a registrant can claim credits for tax paid within the window, which is why acting now recovers materially more than acting in six months.
Registration Has a Cost Side
Registering means charging and remitting GST/HST on your taxable supplies in Canada, and filing returns. That is real administration and it changes your invoicing.
In most cases the arithmetic still favours registering by a wide margin, because the tax you charge is collected from customers while the border GST is coming out of your own margin. But it is a genuine obligation rather than a pure refund opportunity, and it should be entered deliberately.
- Charge GST/HST on taxable supplies made in Canada
- File returns on the assigned frequency
- Keep documentation meeting the input tax credit requirements
- Possibly post security where there is no permanent establishment
- Watch the provincial taxes, which are entirely separate
The Security Deposit Catches People Out
A non-resident registrant with no permanent establishment in Canada may be required to provide security, generally fifty percent of estimated net tax for the following twelve months, with a floor of five thousand dollars and a ceiling of one million.
It is a deposit rather than a cost, and it is a cash flow item that should be planned rather than discovered. Where the estimated net tax is negative because you are in a refund position, the calculation still applies on the absolute amount.
Whether You Are Required to Register Is a Separate Question
Everything above is about wanting to register. Whether you are required to is a different matter, and it turns on whether you are carrying on business in Canada, which is a question of fact assessed against a list of factors.
A seller who is required to register and has not been is in a worse position than one who simply chose not to. If there is any doubt, that should be looked at properly rather than assumed either way.
GST/HST registration does not cover Quebec, British Columbia, Saskatchewan or Manitoba. Those four run their own sales taxes with their own registration rules, and Saskatchewan has no small-supplier threshold at all. A seller shipping into Canada needs to look at those separately.
What This Calculator Does Not Cover
- Whether you are required to register, which is a question of fact
- Customs valuation and duty classification
- Provincial sales taxes in QC, BC, SK and MB
- Income tax and permanent establishment questions
- Drawback and remission programs
- The simplified registration regime for digital suppliers
Start with the four-year expiry date, because that is the only part with a deadline. Our import and export accounting service covers the registration, the recovery claim and the ongoing returns.
Frequently Asked Questions
Common questions on recovering import GST.
Related Calculators and Guides
More tools for selling into Canada.
The Oldest Claims Expire First
Send us your import volumes and how long you have been shipping DDP. We will work out what is still claimable, handle the registration and the security question, and file the returns that recover it.