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What you need to know about the
CBSA’s new approach to Transfer Pricing
Earlier this year, Canada Border Services Agency (CBSA) announced a new approach to Transfer Pricing (the valuation method for determining the price paid or payable for trade between related parties) that has multiple implications in terms of refunds, payments of duties and taxes and Administrative Monetary Penalty System (AMPS) penalties.
- Refunds (on dutiable shipments) are now possible when there is a reduction in price paid or payable post import of dutiable goods.
- Duties and taxes could be applied on upward pricing adjustments as CBSA believes that these amounts are part of the Value for Duty (VFD) of imported goods.
- The new approach to Transfer Pricing penalties comes into play if an importer of duty free items (e.g. books) fails to submit voluntary adjustments, reflecting downward price reductions occurring after importation.
The CBSA’s existing Directive Memorandum D13-3-6 “Income Tax Transfer Pricing and Customs Valuation” from 2006 is expected to be revised to reflect the CBSA’s new position.
Need help to determine how these changes impact your existing Transfer Pricing agreements? Call Brian Rowe, General Manager – Customs Consulting Services at (905) 882-4880, ext.213.
Undervalued courier shipments now subject to seizure
Shipments of commercial goods through the Courier Low Value System (CLVS) program are now subject to seizure if there is physical evidence of a significant undervaluation. Physical evidence includes any document found on the shipment, such as an invoice that shows a contradiction between the declared value presented by the exporter, and the transactional value. The definition of “significant undervaluation” is still notknown.
If you are currently using the Courier LVS program, be sure to advise your vendors to declare accurate invoice/transaction values on your courier declarations in order to avoid the potential seizures and penalties that may result in undervalued goods.
For more information, contact Brian Rowe, General Manager – Customs Consulting Services.
Feasibility of shipping canal across Thailand under review
A newspaper in Thailand (Thai Daily) has reported that China is considering the feasibility of building a 100-kilometre canal in South Thailand that would connect the Pacific and IndianOceans.
The completed 26-metre deep canal, estimated to cost $20billion, would cut shipping times by about 48hours and reduce the congestion expected to develop in the Malacca Straight over the next ten years. Details will be announced on February21st at a seminar on China’s Maritime Silk Road Initiative, created to revive the country’s historic trade routes across Asia.
For more information, contact David Lychek, Manager – Ocean & Air Services.
Carriers ordering bigger container ships
to achieve economies of scale
The average size of container ships continues to expand as carriers order ever larger vessels. The latest record was set earlier this year by Mediterranean Shipping Co. when it took delivery of the 19,224TEU (Twenty-foot Equivalent Unit) MSC Oscar – just slightly larger than China Shipping’s 19,100TEU CSCL Globe (see photo).
For more information, contact David Lychek, Manager – Ocean & Air Services.
Terminology Explained
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Is this grounds for the
declaration of Force Majeure? |
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Force Majeure – Service providers declare “Force Majeure” (the French phrase for “superior force”) when extraordinary circumstances make it materially impossible to fulfill contract obligations. For example, a bill of lading or contract of carriage for ocean transportation will typically include a clause that allows the carrier to declare Force Majeure when an extraordinary event prevents the delivery of the cargo to the specified location.
Examples of extraordinary circumstances include, but are not limited to, events such as wars, strikes, riots, crime and acts of God. Notable events of Force Majeure being declared by ocean carriers were Hurricanes Sandy and Katrina and Japan’s tsunami. Legal actions can still be advanced against carriers for negligence or failing to perform under conditions that are ordinary or expected, such as a forecasted storm.
This mystery city has Europe’s third largest port
A visit to this city is incomplete if you don’t try the world famous waffles. This city is also a great place to buy a diamond or enjoy a beer. See if you can name it after reading the following clues.
- This city is strategically located on one of the world’s busiest trade routes.
- This city’s port handled a record 199,012,082 tonnes of freight in 2014, an increase of 4.3% versus the previous year.
- This city is where the world’s first newspaper was published about 400 years ago.
- This city is located in a country that has three official languages.
- The country that this city is located in holds the Guinness World Record for the longest period (535days) without an official government.
- This city’s port specializes in the petro chemical industry and is home to the world’s 10largest chemical producers.
- Most residents of this city own a bike and prefer that mode of transportation over a car.
 Click here to see the answer
For more information about freight to/from this city, contact Debbie McGuire, Manager – FreightSolutions.
How to cut import duties and taxes paid on freight deliveries
Make sure you insist that freight charges are shown on your Supplier’s Commercial Invoices. That’s important because freight charges can be deducted from the invoice value used for customs clearance purposes, resulting in less import duties and taxes paid (depending on Incoterms).
At Your Service – Jennifer Dupont, Truck Services
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Jennifer Dupont, Truck Services
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It takes a lot of work behind the scenes by a dedicated team of logistics professionals to deliver the level of service our valued clients have come to expect.
One of these professionals is Jennifer Dupont, who joined Universal Logistics in June 2000 as an Accounting Department employee and subsequently worked her way through Customs, Consulting and Administration before becoming a member of our Truck Services team, which she joined in September 2010.
Jennifer can be reached by phone at (905) 882-4880, ext.296 or by email. |
