Completing an Excise Duty Return – Spirits Licensee

Excise Duty Memorandum EDM10-1-7

February 2023

This version replaces the one dated August 2003. This memorandum was revised to clarify how spirits licensees are required to file their returns and to make the information more helpful and easier to understand.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Act, 2001. The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may refer to the Act or relevant regulation, or contact your CRA regional excise office for additional information. The offices are listed at Contact Information – Excise and Specialty Tax Directorate.

General

As a spirits licensee, you must file Form B266, Excise Duty Return – Spirits Licensee, and, if applicable, pay excise duty for each reporting period. For information on the responsibilities and requirements related to producers and packagers of spirits, refer to Excise Duty Memorandum EDM3-1-1, Producers and Packagers of Spirits.

When completing Form B266, include only the information that applies to the reporting period for which you are filing and complete only the lines of the return that apply to you. Dollar amounts should be rounded to the nearest cent.

Filing your return

You can file your return either:

• electronically using the “File a return” function in My Business Account
• by mail at:

Canada Revenue Agency
Prince Edward Island Tax Centre
275 Pope Rd
Summerside PE  C1N 6E7

Instructions for page 1

Identification box

Enter the complete legal name and mailing address of your business.

Box 1 – Account number

Enter your 9-digit business number (BN) and 4-digit program account number.

Box 2 – Period covered (YYYY-MM-DD)

Enter the start and end dates of the reporting period for which this return is being filed.

Box 3 – Due date of return (YYYY-MM-DD)

Enter the due date for this return. The due date is the last day of the month following the reporting period entered in box 2. When the due date falls on a Saturday, a Sunday or a public holiday recognized by the Canada Revenue Agency (CRA), your return is considered on time if the CRA receives it or if it is postmarked on or before the next business day.

Line 4 – Spirits containing more than 7%

Spirits containing more than 7% absolute ethyl alcohol by volume must be reported in litres of absolute ethyl alcohol. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of absolute ethyl alcohol in spirits containing more than 7% absolute ethyl alcohol by volume on which excise duty is payable.

To calculate the amount of excise duty payable, multiply the quantity of spirits you entered by the effective rate of excise duty for spirits containing more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.

Line 5 – Spirits containing not more than 7%

Spirits containing not more than 7% absolute ethyl alcohol by volume must be reported in litres of spirits. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of spirits containing not more than 7% absolute ethyl alcohol by volume on which excise duty is payable.

To calculate the amount of excise duty payable, multiply the quantity of spirits you entered by the effective rate of excise duty for spirits containing not more than 7% absolute ethyl alcohol by volume, and enter the result under “Duty payable”.

Line 6 – Imported spirits delivered to licensed users

Imported spirits delivered to licensed users must be reported in litres of absolute ethyl alcohol. In the “Quantity (litres of absolute ethyl alcohol/litres)” column, enter the total litres of absolute ethyl alcohol in imported spirits delivered to licensed users.

To calculate the amount of special duty payable, multiply the quantity of spirits you entered by the effective rate of special duty for spirits delivered to a licensed user, and enter the result under “Duty payable”.

Line 7 – Total (4 to 6)

Add the amounts from lines 4 to 6 of the “Duty payable” column and enter the total.

Line 8 – Refunds (B256 attached)

Enter the total refund claimed on line 8 only if you are attaching Form B256, Excise Act, 2001 – Application for Refund.

You may reduce the excise duty payable for the current reporting period by the amount of the refund claimed on Form B256, provided that form is attached to this return.

If you have filed a separate refund claim, do not record the amount of that claim on this return.

If you expect a refund from a previous reporting period but have not yet received it, do not include that information on this return.

Line 9 – Net payable (7 minus 8)

Subtract the amount on line 8 from the amount on line 7. Enter the result on line 9.

Line 10 – Amount due

Enter the amount from line 9.

Line 11 – Payment / credit due

Enter the amount from line 10.

If the amount is negative, a credit is due.

If the amount is positive , a payment is due. If you have not already paid it, enter this amount and make your payment online, by mail or in person at a financial institution. If you have already paid it, enter “0”.

Certification

Enter the name, title and telephone number of an authorized representative. The authorized representative must sign and date the return.

Instructions for page 2

Where necessary, enter in the appropriate box any changes related to your licence:

• name of licensee
• mailing address
• address for books and records
• contact name and title
• telephone number
• language of future correspondence
• the effective date of the above changes
• the date when the business closed and the reason for closure

Additional material required

Check any of the applicable boxes if you require additional:

• remittance vouchers
• pre-addressed return envelopes
• remittance envelopes

Instructions for page 3

You must report inventories of bulk spirits in your possession, regardless of who owns them. Do not report inventories of bulk spirits that you own but do not have in your possession.

Identification box

Enter the complete legal name of your business.

Box 1 – Account number

Enter your 9-digit BN and 4-digit program account number.

Box 2 – Period covered (YYYY-MM-DD)

Enter the start and end dates of the reporting period for which this return is being filed.

Inventory table

The inventory of bulk spirits is reported in litres of absolute ethyl alcohol.

Line A – Opening inventory

Enter the total opening quantity of spirits. The opening inventory on line A of this return must equal the closing inventory on line E of the previous return.

Additions to bulk spirits inventory

Spirits produced
Enter the total quantity of bulk spirits produced. For additional information on the meaning of produce, refer to Excise Duty Memorandum EDM3-1-1.

Received from other spirits licensees and licensed users
Enter the total quantity of bulk spirits received from other spirits licensees and licensed users.

Imported bulk spirits
Enter the total quantity of bulk spirits that you imported.

Packaged spirits returned to bulk spirits inventory
Enter the total quantity of packaged spirits returned to bulk inventory.

Line B – Total additions

Add the quantities of bulk spirits added to your inventory and enter the total on line B.

Reductions to bulk spirits inventory

Removed for delivery to
Enter the total quantity of bulk spirits removed for delivery to:

• spirits licensees
• licensed users (for domestic and imported spirits)

To produce denatured alcohol (DA)
Enter the total quantity of bulk spirits denatured into:

• fuel grades (DA-2F and DA-2G)
• other grades

To produce specially denatured alcohol (SDA)
Enter the total quantity of bulk spirits denatured into specially denatured alcohol.

Exported bulk spirits
Enter the total quantity of bulk spirits that you exported.

Removed to packaging activities
This category is separated into the following sub-categories:

• Packaged: non-duty-paid
  • Containing more than 7% absolute ethyl alcohol by volume
  • Containing not more than 7% absolute ethyl alcohol by volume
  • Packaged in marked special containers
• Packaged: duty-paid

For each applicable line, enter the total quantity of bulk spirits removed to packaging activities.

Bulk spirits returned to production
Enter the total quantity of bulk spirits returned to spirits production.

Removed for other purposes

• Non-duty-paid (for example, taken for analysis or destroyed in an approved manner)
• Duty-paid (for example, taken for use or unaccounted losses)

For each applicable line, enter the total quantity of bulk spirits removed for other purposes and specify the purpose for removal.

Line C – Total reductions

Add the quantities of bulk spirits removed from your inventory and enter the total on line C.

Line D – Inventory adjustments (+ or −)

Enter the necessary inventory adjustment. Adjustments may be necessary to balance the physical inventory with the book inventory. The closing inventory in your books must match the closing physical inventory for the reporting period.

Line E – Closing inventory (A + B) − C ± D

Add the quantity on line A and the total on line B, subtract the total on line C, add or subtract the inventory adjustment on line D, and enter the result on line E. This closing inventory is the opening inventory for the following reporting period.

Further information