Exported Motor Vehicles Drawback
Memorandum D7-3-2

Note to reader

Canada Border Services Agency is currently reviewing this D-memo. It will be updated in the context of the CBSA Assessment Revenue Management (CARM) initiative and made available to stakeholders as soon as possible. Find out about CARM.

Ottawa, November 14, 2014

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In Brief

  • 1. The editing revisions made in this memorandum do not affect or change any of the existing policies or procedures.
  • 2. This memorandum has been revised to reflect changes to the Canada Border Services Agency's organizational structure.

This memorandum outlines and explains the general conditions under which a drawback may be paid in respect of new motor vehicles purchased and used temporarily in Canada prior to exportation. This memorandum may interest those persons who are taking up residence outside of Canada and intend to purchase a new motor vehicle in Canada prior to departure. It may also be of interest to motor vehicle dealers.

Guidelines and General Information

Qualifying Motor Vehicles

1. Not all motor vehicles qualify for drawback under the Exported Motor Vehicles Drawback Regulations. Only the following vehicles may be eligible for a drawback when sold to a purchaser in Canada before it is exported and it is, at the time of sale, new:

What is a Drawback?

2. A drawback is a refund of the duties paid on imported goods that are subsequently exported from Canada. For information on drawbacks on other imported goods please refer to Memorandum D7-4-2, Duty Drawback Program.

Goods Eligible Under the Exported Motor Vehicle Drawback Regulations

3. A drawback may be claimed for customs duties paid on the following:

4. New motor vehicles purchased in Canada may only be used in Canada for a specific period of time prior to export. Residents of Canada must export the vehicle within 30 days of the date of delivery from the dealer. Non-residents must export the vehicle within 12 months after the date of delivery from the dealer. In addition, the vehicle must be for the personal use by the purchaser and used only by the purchaser. The motor vehicle may not be used for any commercial purpose.

Who Can Claim a Drawback

5. A drawback may only be claimed by the importer of the motor vehicle, the person who sold the imported motor vehicle (the dealer) to the purchaser or the processor (manufacturer or assembler) of the motor vehicle processed in Canada. Generally the dealer will be the person filing the claim. In certain cases the vehicle importer or the Canadian manufacturer files the drawback claims. In any case, the purchaser of the vehicle is not entitled to file a drawback claim under this regulation. This means that the purchaser must work closely with the dealer and/or the manufacturer or importer to ensure that all necessary documents are available to support the claim. Purchasers should be aware that the filing of a drawback claim is voluntary. The Canada Border Services Agency (CBSA) cannot require a dealer, manufacturer or importer to file a claim.

NAFTA Limitations on Drawback

6. In certain cases duty cannot be refunded, or the amount of drawback refunded is reduced on imported goods that are exported to another NAFTA country. Generally, this affects the amount of drawback that may be paid on goods imported from a non-NAFTA country used in the production of another product that is subsequently exported to a NAFTA country.

7. The provision limits the amount of drawback that may be refunded, on exported non-NAFTA originating goods, to the lesser of the duties paid on imported materials, or duties paid on the end products when imported into another NAFTA country. This simply means that you may claim duties in an amount that is the lesser of the duties paid or payable on the goods upon entry into Canada and the amount of duty paid or payable on the goods (finished product) when subsequently exported and entered into the United States or Mexico. If no duties are paid on the goods entering the other NAFTA country, then there can be no drawback of customs duty paid in Canada.

8. NAFTA does not affect drawback of customs duties paid on imported goods that are subsequently exported to non-NAFTA countries. For further information please refer to Memorandum D7-4-3 NAFTA Requirements for Drawback and Duty Deferral.

Drawback Claim Procedures

9. To apply for drawback, a Form K32, Drawback Claim, is to be legible, either typed or in ink and filed together with supporting documentation, at the nearest Canada Border Services Agency office. Completion instructions are on the back of the form. A sample of the form can be found on the CBSA web site.


10. The drawback claim shall include supporting documentation demonstrating that the conditions under the regulations have been met. The following documentation should accompany the claim:

11. The documents should include a complete description of the vehicle(s) involved in the transaction; a bill of lading if the vehicle is not driven out of Canada; in the case of a motor vehicle that was used in Canada, documentation demonstrating use in accordance with paragraph 5(b) of the Regulations; and when the purchaser is a non-resident, a copy of a permit issued by Citizenship and Immigration Canada establishing the non-resident status of the purchaser.

12. Claims may be supported by commercial documentation such as a foreign customs transaction and registration for licensing.

13. Failure to present conclusive proof of export may result in the denial of drawback.

Vehicles Exported to North American Destinations

14. In addition to the documentation listed above, where a vehicle is exported to a North American destination, a claim for drawback must be supported by:

Drawback on Motor Vehicles Not Used in Canada

15. In certain cases, where the motor vehicles are not used in Canada but are exported by the purchaser, or exported by the vehicle dealer, it is possible for the processor to claim drawback. A vehicle driven directly from Canada (export) by the purchaser after delivery by the dealer will not be considered to be used in Canada.

Who is the Exporter?

16. For purposes of determining who the exporter is:

Where to File a Drawback Claim

17. The drawback claim may be sent directly to the nearest CBSA office.

Time Limits

18. The motor vehicle must be exported from Canada, and a drawback claim submitted to the CBSA within four years of the date of release of the vehicle that is imported, or within four years of the date of release of the imported goods and materials used to produce the vehicle in Canada.

Verification of Drawback Claims

19. Drawback claims are subject to verification by CBSA officials. This means that the claimant may be contacted by letter or telephone concerning request for clarification or for further information, or may be visited by a CBSA officer. If there are any questions concerning the status of the claim or you disagree with a CBSA decision made on a claim, please contact the nearest CBSA officer to discuss the matter.

Goods and Services Tax (GST), Harmonized Sales Tax (HST) and Provincial Sales Tax (PST)

20. GST, HST and PST may not be claimed through the drawback claim process. For information concerning rebates of GST, HST or PST, please contact your local Canada Revenue Agency (CRA) Tax Interpretation Services Centre, or contact the provincial tax authority concerning rebates of PST.

Additional Information

21. For more information, within Canada call the Border Information Service at 1-800-461-9999. From outside Canada, call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time / except holidays). TTY is also available within Canada: 1-866-335-3237.


Issuing office:
Trade and Anti-dumping Programs Directorate
Headquarters file:
Legislative references:
Customs Tariff
Exported Motor Vehicles Drawback Regulations  
North American Free Trade Agreement
Other references:
D7-4-1, D7-4-2, D7-4-3, D17-1-1, D17-1-10, D20-1-4, K32, K32A, K32B
Superseded memorandum D:
D7-3-2 dated October 21, 2009
Date modified: