Tobacco Charges Regulations Guide: Sales and revenue

On this page

• Statement of sales and revenue
• How to complete the statement
• Clarification requests
• Record keeping
• Failure to submit the statement or to provide accurate information

Statement of sales and revenue

All designated manufacturers (herein referred to as “manufacturers”) must submit a statement of sales and revenue no later than April 30 of each fiscal year that reports their tobacco product net sales revenue for the previous fiscal year.

Use the Statement of Tobacco Sales and Revenue form (herein referred to as the “statement”) to report your net sales revenue. Submit the latest form without changing its format, and ensure print and copy functions are enabled. If the form is amended by Health Canada, we will notify manufacturers and distribute the new electronic form.

Send the completed form electronically, in the original format, in the manner specified in the form. To request this form, please send an email to tcr-rct@hc-sc.gc.ca.

Tobacco product net sales revenue inclusions

Report your net sales revenue for retail products that are made in whole or in part of tobacco and sold:

• At retail in Canada (for example, in gas and convenience stores, tobacconists, duty-free shops, online stores)
• As ships’ stores (see the Ships’ Stores Regulations)
• To an accredited representative (as defined in section 2 of the Excise Act, 2001)

Tobacco products

Tobacco product categories to report (domestic net sales revenue):

• Cigarettes
• Cigars
• Little cigars
• Cigarette tobacco
• Leaf tobacco
• Pipe tobacco
• Water pipe tobacco
• Smokeless tobacco
• Heated tobacco products
• All other types of tobacco product that are made in whole or in part of tobacco

Ship’s stores

The Ships' Stores Regulations list goods used on qualifying conveyances that may be relieved of normal duties and taxes. Tobacco products sold to be used on passenger ships, fishing ships and international aircrafts are examples of ships’ stores goods.

Accredited representative

An "accredited representative" is a person entitled to tax exemptions under the Foreign Missions and International Organizations Act. Sales of tobacco products to embassies and foreign missions are examples of sales to accredited representatives.

Shipping

Shipping costs to distributors and retailers should be included in the net sales revenue if they are part of the value of the manufacturer’s sales of tobacco products (that is, if they were included in the value paid by the buyer of the tobacco products).

Monetary and non-monetary consideration

Include, in your net sales revenue, the value of the revenue received from the sale price and any additional consideration you receive for the sale of tobacco products.

• Monetary consideration is any money payment (financial compensation) you receive from the sale of tobacco products.
• Non-monetary consideration is any other thing of value you receive from a third party or another entity for the sale of tobacco products (for example, goods, services or other assets) that is not a money payment.

This ensures you report the full value received from tobacco product sales.

Tobacco product net sales revenue exclusions

Exclude from the reported net sales revenue the following products:

• Papers, tubes, or filters intended for use with a tobacco product, a device that is necessary for the use of a tobacco product or the parts that may be used with that device

Exclude the following amounts from the reported net sales revenue:

• All taxes or duties related to selling tobacco products (for example, excise duties, additional duties, special duties, customs tariffs, provincial sales tax)
• The value of tobacco products returned to you during the same fiscal year period

How to complete the statement

Before you start, read the instructions that come with the statement. Include the following in your submission:

• The manufacturer’s name, telephone number, email address, and the civic address of the principal place of business in Canada
• The name, telephone number, email address, and workplace civic address of the individual who prepares the statement
• The name, telephone number, email address, and workplace civic address of the individual responsible for the manufacturer’s financial affairs. If they work for another entity, include that entity’s name and its Canadian principal place of business contact details (telephone number, email address, civic address)
• The name, telephone number, email address, and Canadian workplace civic address of the individual responsible for annual charge payment communications
• The business number assigned by the Minister of National Revenue
• The date of the statement and the fiscal year it covers
• Net sales revenue (CAD) for each tobacco product category sold and the total net sales revenue
• For tobacco products sold by weight: the total kilograms sold during the fiscal year minus the total kilograms returned during the same fiscal year
• For tobacco products sold as a unit or packages with more than one unit: the total number of units sold during the fiscal year minus the total number of units returned during the same fiscal year
• The total value (CAD) of any excise duty imposed during the fiscal year on the tobacco products sold minus the total value (CAD) of any excise duty imposed during the same fiscal year on any returns
• Two signed and dated attestations
  • By the individual who prepares the statement confirming that submitted information is correct and complete
  • By the individual responsible for financial affairs confirming that the statement was prepared in accordance with generally accepted accounting principles (GAAP) 

  The same person can sign both attestations if they hold both roles.

Net sales revenue for a tobacco product category is the total wholesale value at which the manufacturer sells the product to distributors or retailers.

When reporting net sales revenue, remember to:

• Report in Canadian dollars (CAD)
• Break down by product category
• Include the value of monetary and non-monetary consideration (see section Tobacco product net sales revenue inclusions)
• Exclude all taxes or duties related to the sale of tobacco products (see section Tobacco product net sales revenue exclusions)
• Exclude the value of tobacco products returned during the same fiscal year

Before you submit the statement, ensure that:

• All required fields are complete (see section How to complete the statement for required submission elements such as manufacturer name, product categories, net sales revenue, attestations, etc.)
• The financial information is for the previous fiscal year (April 1 - March 31)
• For each product category sold in a previous fiscal year, provide the total number of units or total weight sold and the matching net sales revenue
• If you reported under “all other types of tobacco product” category, the type of tobacco product is specified
• Report weight in kilograms (not grams) for tobacco products sold by weight
• Report number of units, not number of packages for tobacco products sold by unit or as a package (containing more than one unit)
• The total net sales revenue equals the sum of net sales revenue by product category
• The total excise duties equal the sum of excise duties by product category

Blank cells in the statement are treated as nil (no sales last fiscal year for that product category). Manufacturers must break down revenue by category; however, the category breakdown does not change the annual charge calculation.

See Appendix 3 for a detailed submission checklist.

Clarification requests

Health Canada reviews submitted statements for completeness and accuracy. If clarification is needed because information in the statement is missing or unclear, Health Canada may request more information.

Manufacturers have 10 calendar days from the date of the request to respond. See section Failure to submit the statement or to provide accurate information for possible measures if incorrect or incomplete information is provided.

Record keeping

Keep all documents used to submit the statement or any clarifying information:

• For at least seven years after submission of the statement
• In a paper or electronic form at the manufacturer’s principal place of business in Canada
• So they are readily accessible at all times and can be provided to Health Canada upon written request

Every manufacturer that fails to meet the record keeping requirements is guilty of an offence and liable on summary conviction to a fine of up to $50,000.

Failure to submit the statement or to provide accurate information

Manufacturers must submit the statement no later than April 30 for the previous fiscal year.

If you miss the deadline to submit the statement or provide incorrect or incomplete information in the statement, Health Canada may take appropriate measures such as: 

• Estimate your total net sales revenue and your annual charge (see section Estimation)
• Issue an order to stop the sale of one or more tobacco products
• Seize any tobacco products if not respecting the stop sale order

Health Canada inspectors may also visit manufacturers to collect information using the inspection powers under subsection 35 (2) of the Tobacco and Vaping Products Act.

Every manufacturer that contravenes an order is guilty of an offence and liable on summary conviction to a fine of up to $50,000.