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Vehicles: purchase, sale and importation

By a foreign state | By a member of a foreign mission

Most recent date of change: January 30, 2017

1. Policy statement and objective

Foreign states and accredited members of foreign missions may purchase or import vehicles, subject to international and domestic laws and regulations. This applies to international organizations and their staff. In the administration of customs privileges and the implementation of programs and services for the diplomatic community on matters of imported vehicles, Department of Foreign Affairs, Trade and Development (DFATD) works collaboratively with the Canada Border Services Agency (CBSA), which is primarily responsible for the implementation and regulation of border legislation. With respect to the registration of vehicles purchased locally or imported in Canada, provincial ministries of transportation are responsible for the delivery of licence plates.

2. Definitions

For the purpose of this policy, the following expressions shall have the following meaning:

“customs memo” means the on Customs Privileges for Diplomatic Missions, Consular Posts, and International Organizations (Tariff Item No. 9808.00.00) published by the CBSA;

“diplomatic agents”, in this document only and for ease of reference, means members of the diplomatic staff of bilateral missions accredited to Canada and members of international organizations who enjoy equivalent status;

“vehicle” means any vehicle that is capable of being driven or drawn on roads by any means other than muscular power exclusively, but does not include any vehicle designed to run exclusively on rails. Transport Canada considers the following as vehicles: antique reproduction vehicle, bus, chassis-cab, low speed vehicle, motorcycle, multi-purpose passenger vehicle (some examples are motorhome, van, minivan, 4X4, and jeep), passenger car, limousine, restricted use motorcycle, electric bicycle, snowmobile, snowmobile cutter, trailer (some examples are utility, horse, boat, car dollies), trailer with equipment mounted on it, trailer converter dolly, truck, and any other vehicle deemed a prescribed vehicle class under the Motor Vehicle Safety Regulations;

“new vehicle” means a vehicle that has never been sold at the retail level, and has never been owned or registered;

“used or second hand vehicle” means a locally purchased vehicle that has been previously been owed and has been sold at the retail level;

“imported vehicle”, in this document, refers to vehicles imported from another country directly by the mission or by the member, it does not refer to a commercial imported vehicles imported in the name of a dealership;

“RIV” refers to the company, the Registrar of Imported Vehicles that entered into a contract with Transport Canada to establish and operate a national program of vehicle inspection and certification;

“Canadian specification vehicle” refers to a vehicle built to comply with the Canadian Motor Vehicle Safety Standards, or CMVSS.

3. Diplomatic missions, consular posts and international organizations

3.1. Purchasing a vehicle

Diplomatic missions, consular posts headed by career consular officers and international organizations may, unless there are reciprocal restrictions, purchase a reasonable number of duty free vehicles for their official use in Canada. They must however pay all applicable consumer taxes at the point of sale, including GST/HST, and file relief applications with the relevant ministries or agencies.

Some vehicles may have hidden customs and excise taxes (normally on parts made outside Canada). The diplomatic missions, consular post or international organization should ascertain from the dealer if this is the case. Should it be the case then they should ask the dealer for the reimbursement of these charges as they are exempt from any importation taxes. The Canada Revenue Agency (CRA) has informed us that there is a (PDF Version, 55 KB)^{Footnote *} to be completed.

The dealer then takes the form and forwards it to his headquarters which must request the reimbursement from the CRA since it is the dealer which paid the original tax. Once received, the dealer will forward the reimbursement to the client. This process may take up to 1 year depending where the headquarter office is etc. The preceding applies only for new vehicles and does not apply to second-hand (previously used) vehicles.

3.2. Purchasing a second-hand vehicle through a private sale

Second-hand vehicles purchased locally through a private sale are not subject to GST. The buyer may be exempt from the Provincial Sales Tax, subject to eligibility. Second-hand vehicles purchased from dealerships are subject to all applicable taxes and individuals may be eligible for a rebate subject to reciprocity.

3.3. Importing a vehicle

Diplomatic missions, consular posts and international organizations may, unless there are reciprocal restrictions, import a reasonable number of vehicles for official purposes, subject to conditions and obligations set forth in ss. 49-58 of the Customs Memo . Diplomatic Missions are exempt from customs taxes, duties and GST/HST on imported vehicles. However, imported vehicles ordered through a Canadian dealer will typically include all customs taxes, duties and other taxes since it is the dealer which is recognized as the primary importer.

This privilege does not extend to consular posts headed by honorary consular officers.

In the event that the registration document was surrendered to local authorities in other country prior to importation, the vehicle owner must either retrieve the original document or obtain an original Confirmation of Ownership from that previous licensing authority. The Confirmation of Ownership should include the registrant’s name, the VIN of the vehicle, and a statement that the vehicle was registered in that jurisdiction. Photocopies will not be accepted.

3.4. Selling a vehicle

Official vehicles purchased new and imported vehicle that meets Canadian specifications at the time of importation may, unless there are reciprocal restrictions, be sold duty and tax-free on the open market after a period of two years.

Official vehicles which were purchased locally second-hand may be sold at any time.

These privileges do not extend to consular post headed by honorary consul officers.

4. Diplomatic agents and career consular officers

4.1. Purchasing a vehicle

Diplomatic agents and their accredited spouse may, unless there are reciprocal restrictions, purchase a reasonable amount of vehicle locally. “Reasonable amount” normally means 1 for single people and 2 for a couple. However, the Department is pleased to review any special request for additional vehicles.

Diplomatic agents and accredited spouse, where authorized, may be exempt from the PST at source (unless reciprocity applies) by presenting the federal identity card. Dependent children are strictly not authorized to use their identity card for the above purpose.

Reimbursement of the GST/HST is based on reciprocity. The diplomatic agent must pay the tax but may, if reciprocity exists, claim its reimbursement from the CRA, following the same procedure as for diplomatic missions, consular posts or international organizations.

4.2. Purchasing locally a second-hand vehicle through a private sale

Second-hand vehicles purchased locally through a private sale are not subject to GST. The buyer may be exempt from the Provincial Sales Tax, subject to eligibility. Second-hand vehicles purchased locally from dealerships are subject to all applicable taxes and individuals may be eligible for a rebate subject to reciprocity.

4.3. Importing a vehicle

Diplomatic agents and consular officers may, unless there are reciprocal restrictions, import a reasonable number of vehicles for personal use, subject to conditions and obligations set forth in ss. 49-58 of the Customs Memo . Diplomats are exempted from customs taxes, duties and GST/HST on imported vehicles. However, imported vehicles ordered through a Canadian dealer will typically include all customs taxes, duties and other taxes since it is the dealer which is recognized as the primary importer.

4.4. Importing a vehicle NOT Manufactured to Canadian Safety Standards:

See 7. Motor vehicles safety standards applicable to imports.

This privilege does not extend to consular posts headed by honorary consular officers.

To register an imported motor vehicle in Ontario, see 3.3 Note.

4.5. Selling a vehicle

New vehicles purchased locally and imported vehicle that meets Canadian specifications at the time of importation may be sold duty and tax-free on the open market after a period of two years, unless there are reciprocal restrictions. Vehicles purchased locally second-hand may be sold at any time.

5. Members of the administrative and technical staff, and consular employees

5.1. Purchasing a vehicle

Members of the administrative and technical staff, consular employees and their spouse may, unless there are reciprocal restrictions, purchase a reasonable number of vehicles locally. “Reasonable amount” normally means 1 for single people and 2 for a couple. However, the Department is pleased to review any special requests for additional vehicles.

Members of the administrative & technical staff, consular employees and their spouse may, where authorized, enjoy exemption from the PST. Dependent children are strictly not authorized to use their identity card for the above purpose.

The GST/HST is based on reciprocity. Members of the administrative & technical staff must pay the tax but may, if reciprocity exists, claim its reimbursement from the CRA, following the same procedure as for diplomatic missions, consular posts or international organizations.

5.2. Purchasing locally a second-hand vehicle through a private sale

Second-hand vehicles purchased locally through a private sale are not subject to GST. The buyer may be exempt from the Provincial Sales Tax, subject to eligibility. Second-hand vehicles purchased locally from dealerships are subject to all applicable taxes and individuals may be eligible for a rebate subject to reciprocity.

5.3. Importing a vehicle

Members of the administrative & technical staff as well as consular employees may, unless there are reciprocal restrictions, import cars in the same manner as diplomatic agents but this can only be done during the first six months of their assignment.

5.4. Importing a vehicle NOT Manufactured to Canadian safety standards

See 7. Motor vehicles safety standards applicable to imports.

To register an imported motor vehicle in Ontario, see 3.3 Note.

5.5. Selling a vehicle

New vehicles purchased locally and imported vehicle that meets Canadian specifications at the time of importation may be sold duty and tax-free on the open market after a period of two years, unless there are reciprocal restrictions. Second-hand vehicles purchased locally may be sold at any time.

6. Members of the service staff, private servants and honorary consular officers

The persons accredited to these three groups do not benefit from any customs privileges or tax exemptions and as such are liable for all duties and taxes at all times on imported and locally-purchased vehicles.

Also, Canadian citizens and permanent residents of Canada do not enjoy any customs and tax privileges relating to vehicles.

7. Motor vehicles safety standards applicable to imports

Canadian regulation holds that motor vehicles manufactured for sale in Canada or imported into Canada must be certified and clearly labelled to indicate that they comply with all applicable Canadian standards in effect at the time of manufacture. Exceptionally, members of diplomatic missions, consular posts and international organizations are entitled to import on a temporary basis and/or during their posting vehicles that do not conform to Canadian specifications if authorization has been granted by the Office of Protocol of DFATD (by way of Note or letter). See sections 20-22 of the . In such circumstances, it will not be possible for the foreign representative to sell the vehicle on the open market, not even to another accredited representative, unless the vehicle was purchased in the US, originally manufactured to comply with all applicable US Federal Safety Standards and can be elevated to Canadian safety standards. Prior to the sale, the vehicle would be subject to an inspection by a designated authority of Transport Canada known as the Registrar of Imported Vehicles (RIV). The sale is also subject to written consent from the Office of Protocol of DFATD. For additional information about the RIV, please consult the following site: .

8. Reciprocity and more favourable treatment

Nothing in this policy shall be construed as preventing Canada from applying the provisions of this policy and, more generally customs privileges, restrictively on a basis of reciprocity or to accord a treatment greater than that which is covered herein on the basis of existing and future bilateral agreements.

9. Purpose of customs privileges and other privileges related to vehicles

Like immunities, privileges are conferred to diplomatic agents and consular officers, not for their personal benefit, but more fundamentally in order to safeguard the independent exercise of official functions. This principle has a bearing on matters of importation of personal goods. In this respect, duty and tax free importation, including duty and tax free importation of vehicles, must be limited to amounts needed for personal use and the demands of representation. Vehicles cannot be imported under privilege for gifts or for persons not enjoying customs privileges, nor for the purposes of a commercial activity for personal profit.

The Government of Canada relies on heads of diplomatic missions and international organizations accredited to Canada to ensure that their staffs observes policies and regulations relating to the purchase and importation of vehicles, thus minimizing the risk of occurrence of any abuse in connection with the privileges.