A package sent from the United States to Canada may be paid for at the post office, but that does not always mean every cost associated with its delivery has been settled.
The U.S. Postal Service has introduced new customs billing rules that clarify when international senders must pay or reimburse duties, taxes and import-related fees, even after purchasing postage. The changes took effect on October 19, 2026, and apply to international mailing arrangements, including eligible shipments destined for Canada.
The policy responds to changing customs requirements overseas, particularly in Europe, where new rules have increased the importance of collecting import charges in advance.
For American businesses shipping to Canadian customers, the changes introduce another reason to examine customs declarations, delivery terms and the potential for unexpected bills after a package has been mailed.
USPS Introduces New International Customs Billing Rules
The U.S. Postal Service officially updated its International Mail Manual on October 19, 2026, establishing clearer responsibilities for people and businesses mailing goods overseas. Published in the Federal Register as an interim final rule, the changes explain how USPS can collect outstanding customs duties, taxes, import fees and related charges. The policy specifically addresses situations where those costs are assessed after a sender has already purchased postage. Previously paid shipping charges do not necessarily cover customs assessments imposed by the destination country.
The change does not mean every international package will face a new tax. Instead, it establishes procedures for recovering charges that arise under applicable customs and postal arrangements. When a foreign customs authority, postal operator or authorized representative seeks payment from USPS or the sender, the Postal Service may issue an invoice for the outstanding amount. The revised standards apply to international mail generally, with the exact financial responsibility depending on destination-country requirements and the shipment’s circumstances.
Canada-Bound Packages Are Included, but Not Every Sender Must Prepay
Canada is among the destinations where USPS offers its Delivered Duty Paid service, commonly called DDP. This option allows eligible American senders to pay applicable import duties, taxes and fees when arranging international shipping. The service is available for selected products, including Priority Mail Express International, Priority Mail International and First-Class Package International Service. However, availability does not mean every Canada-bound shipment is automatically required to use prepaid customs billing or that every shipment will generate additional charges.
The distinction matters for individuals and small businesses sending goods across the border. A customer ordering merchandise from an American retailer may encounter a different billing arrangement from someone receiving a personal gift from a relative. Depending on Canadian customs rules and the shipping arrangement, the sender or recipient may be responsible for the applicable import charges. The new USPS standards clarify when the American sender can subsequently be billed, rather than establishing a single payment requirement for every package entering Canada.
European Customs Changes Help Explain Why USPS Updated Its Policy
Although the new American postal rules include Canada-bound shipments, the immediate pressure behind the changes came largely from Europe. On July 1, 2026, the European Union eliminated its previous duty exemption for most low-value imported goods. Under the revised system, qualifying merchandise shipments worth up to €150 became subject to additional import duties. The changes also introduced new responsibilities for collecting those charges, prompting European postal operators to revise their acceptance and payment requirements for international packages.
USPS explained that some European postal services now require certain shipments to be sent using approved prepaid-duty arrangements. Others may attempt to recover unpaid customs charges from the original sender when they cannot collect payment from the recipient. This creates complications for American exporters accustomed to paying postage and leaving import charges to customers overseas. The October 19 rule provides a broader framework for handling those circumstances, allowing USPS to recover qualifying charges after mailing rather than leaving the payment process unresolved.
Prepaid Customs Service Offers a Way to Avoid Some Unexpected Bills
USPS already operates a Delivered Duty Paid service that allows eligible international senders to estimate and prepay import charges before mailing their packages. The service is available through participating USPS retail counters, Click-N-Ship, certain postal application programming interfaces and Global Shipping Software. When a qualifying sender chooses the service, estimated duties, taxes and fees are calculated using information from the customs declaration. Those charges are added to postage, alongside a third-party service fee charged by the provider handling the payment arrangement.
One potential advantage is that recipients generally do not have to pay the same import charges again when their packages arrive, subject to the service’s conditions. USPS also advertises a landed-cost guarantee under which its service provider may cover additional customs assessments, although limitations apply. Prepayment is not universally required, and it may be unavailable for certain shipments or postal products. For American retailers serving Canadian customers, offering prepaid import costs can make the final purchase price clearer and reduce the frustration associated with unexpected delivery charges.
American Senders Could Receive Customs Bills After Mailing Packages
One of the most significant provisions concerns customs charges that remain unpaid after a package enters another country. Under the revised International Mail Manual, if a destination-country authority, postal operator, customs broker or authorized representative seeks payment from USPS or the original sender, and the amount has not been settled, USPS or its representative will invoice the sender. This makes the original mailer potentially responsible for costs arising after the shipping transaction has been completed, depending on the applicable customs requirements.
The rules also address what happens when delivery does not go as expected. A sender who receives a valid invoice must pay the amount due even if the package was lost, damaged, returned or never successfully delivered. The obligation also remains while the sender disputes the customs assessment. Consider an American business shipping merchandise overseas that is subsequently returned because of delivery problems. The return itself does not automatically cancel customs charges already assessed. For businesses handling frequent international returns, that distinction can create additional financial exposure.
Unpaid Customs Invoices Could Accumulate 6% Annual Interest
The revised rules establish financial consequences when senders fail to pay customs invoices by their due dates. USPS will assess interest on unpaid amounts at a rate of 6% annually, with interest continuing until the balance is settled. The Postal Service may also recover collection-related costs where permitted by law. This is not a new 6% customs tariff on international shipments. It is an annual interest rate applied to overdue invoices, making timely payment particularly important for businesses receiving multiple international customs assessments.
Disputes are subject to additional restrictions. USPS allows senders to challenge accounting errors associated with its own invoices, but it does not take responsibility for determining whether a foreign customs authority calculated the underlying duties or taxes correctly. Those assessments must be challenged directly with the relevant foreign authority or service provider. If USPS later receives a refund, cancellation or credit, it may make a corresponding adjustment to the sender’s account when appropriate, subject to the rule’s conditions. The process creates a clear payment obligation while leaving the resolution of foreign customs disputes largely outside USPS’s control.
Canadian Customs Rules Still Determine What Import Duties Are Owed
The updated American billing procedures do not change Canada’s basic rules for taxing goods arriving by mail. According to the Canada Border Services Agency, most imported merchandise worth more than C$20 may be subject to applicable duties and taxes. Qualifying personal gifts sent by friends or relatives abroad generally receive a separate exemption of C$60. However, gifts exceeding that amount can be taxed on the portion above the exemption, while ordinary merchandise exceeding C$20 is generally assessed on its full taxable value. Certain products are excluded from these exemptions.
The final amount also depends on the product’s classification, origin and destination within Canada. Most taxable imports face the federal 5% Goods and Services Tax, while participating provinces apply Harmonized Sales Tax and other provinces may collect separate provincial taxes. Canada also introduced additional surtaxes on selected American goods in September 2026. Those measures are separate from the USPS billing changes. Consequently, an American parcel is not automatically subject to additional Canadian duties merely because the sender uses USPS. The goods themselves determine which customs rules apply.
Canada Post May Collect Additional Fees When Packages Arrive
For Canadian recipients, customs assessments are normally handled through the Canada Border Services Agency and Canada Post. CBSA officers examine incoming international mail and determine whether duties or taxes apply. When payment is required, Canada Post generally collects the amount on the government’s behalf. The postal operator also charges a C$9.95 handling fee on applicable dutiable or taxable mail items. Packages that are duty-free and tax-exempt do not incur that handling charge. The fee is separate from the cost of mailing the package in the United States.
Recipients can often pay assessed charges online through Canada Post’s tracking system before delivery, provided their shipment qualifies for online payment. Other options include paying at delivery or when collecting an item from a post office. Prepaid-duty shipments are intended to reduce unexpected charges at the receiving end, although the precise treatment depends on the shipping arrangement and any applicable service-provider conditions. For someone ordering clothing, gifts or household goods from an American seller, knowing whether import costs were prepaid can prevent confusion when the package reaches Canada.
Accurate Customs Declarations Become Even More Important
The USPS revisions also strengthen the emphasis on complete and accurate customs information. International senders must describe package contents correctly and provide the documentation required by the destination country. Depending on the shipment, this may include a commercial invoice, certificate of origin, licence, health certificate or other authorization. USPS customs standards generally require detailed item descriptions, declared values, quantities and appropriate product classification codes. These details help authorities determine which duties and restrictions apply to goods entering another country.
Incorrect declarations can create more than a delivery delay. The revised rules warn that missing documentation, inaccurate information or failure to comply with import restrictions can result in packages being returned or confiscated, potentially accompanied by additional charges. Certain goods, including regulated food, agricultural products and pharmaceuticals, may require extra attention. For an online retailer sending hundreds of orders internationally, repeatedly making the same declaration error could create considerable administrative costs. Small businesses may therefore benefit from reviewing their shipping software, supplier information and customs procedures before expanding sales into additional markets.
Separate U.S. Customs Changes Could Add to Cross-Border Confusion
At nearly the same time, U.S. Customs and Border Protection has been changing procedures for packages entering America rather than leaving it. On October 14, CBP delayed mandatory use of its new electronic Entry Type 13 process from October 22, 2026, until January 20, 2027. The requirement concerns specified inbound postal shipments subject to certain trade duties or additional regulatory oversight. CBP said the extension would give customs brokers, importers and logistics companies more time to prepare without disrupting international deliveries.
These changes are separate from the USPS rule effective October 19. A Canadian retailer sending products to an American customer must navigate U.S. import requirements, while an American retailer shipping to Toronto faces Canadian customs rules and USPS’s updated billing obligations. CBP has also proposed expanding electronic filing to a wider range of low-value shipments, but that broader requirement is not yet final. Distinguishing the two developments is important as businesses assess costs. A new billing procedure for outgoing international mail should not be confused with an incoming customs-entry requirement or a newly imposed tariff.
Cross-Border Businesses Face Greater Pressure to Explain Shipping Costs
With the rules already effective, the clearest response for cross-border retailers is to make import costs more transparent before a sale is completed. Sellers can confirm whether USPS Delivered Duty Paid is available for their chosen shipping service, identify whether customers or the business are expected to pay customs charges, and maintain accurate declarations and invoices. Because unpaid destination charges can be billed after postage is purchased, businesses may also need to account for adjustments and potential late-payment costs rather than treating the original shipping label as the final expense.
For Canadian recipients, CBSA rules still determine the taxes or duties owed, while Canada Post ordinarily handles collection on mailed parcels. Buyers should confirm whether an unexpected charge matches their shipment and whether import fees were prepaid. USPS is accepting public comments until November 18, 2026, but that deadline does not postpone the October 19 effective date. Ultimately, the change does not create a blanket new tax on Canada-bound parcels. It makes responsibility for unpaid charges more explicit, placing greater importance on clear delivery terms, accurate paperwork and communication between sellers and customers.
