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The Export Distribution Centre Program
Acquiring and importing goods without paying the goods and services tax / harmonized sales tax
If you run an export-oriented business that performs limited or no processing of goods and you do not manufacture or produce goods, you can get relief from paying the goods and services tax / harmonized sales tax (GST/HST) when you acquire or import goods.
The Export Distribution Centre (EDC) Program enables eligible businesses to import, tax free, customers' goods that they bring into Canada for processing. Businesses can also acquire or import, tax free, inventory for resale and parts to be consumed by processing their inventory for resale or by processing customers' goods.
Qualifying for the Program
You can participate in this program if the following apply:
- you are a GST/HST registrant engaged exclusively in commercial activities;
- you do not expect that at any time during the year you will manufacture or produce goods or process your inventory or your customers' goods to the point that the value added exceeds the limits specified in related legislation (10% for value added attributable to non-basic services and 20% for total value added); and
- you have an export revenue percentage of 90% or more for the year.
Applying for relief from paying the GST/HST
If you meet the above conditions, you can apply for authorization to use an EDC certificate by completing Form GST528, Authorization to Use an Export Distribution Centre Certificate, and forwarding it to your local Canada Revenue Agency (CRA) tax services office. An audit representative will contact you to review the application. Once your application has been approved, you will be sent a confirmation letter that includes an EDC certificate number.
When you acquire goods in Canada or import goods into Canada, quoting your EDC certificate number will let your supplier or the Canada Border Services Agency (CBSA) know that you are authorized to acquire or import the goods tax free under the EDC Program.
The Program lets you acquire in Canada, or import into Canada the following goods tax free:
- goods for resale;
- your goods or your customers' goods for further processing; and
- parts that will be incorporated into your own inventory for resale or into your customers' goods.
Time limits
Your EDC Program authorization is valid for three years unless it is revoked earlier. You can ask the CBSA to extend your authorization.
Compliance
From time to time, a verification will be conducted to ensure compliance with the terms of the Program. Your authorization to use the EDC certificate may be revoked if you no longer meet the conditions of the Program. You must also determine at the end of each fiscal year if you met these conditions during the year. If you did not, your certificate will be revoked immediately after that fiscal year. You may also have to make adjustments to your net tax remittable for having acquired or imported goods tax free when you no longer met the conditions of the Program.
More information
For more information on the EDC Program or for help preparing your application, contact your CRA tax services office or visit the CRA Web site at www.cra.gc.ca.
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