Completing an Excise Duty Return – Tobacco Licensee

Excise Duty Memorandum EDM10-1-8

February 2023

This version replaces the one dated September 2013. This memorandum was revised to clarify how tobacco 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 tobacco licensee, you must file Form B267, Excise Duty Return – Tobacco Licensee, and, if applicable, pay excise duty for each reporting period. For information on the responsibilities and requirements related to tobacco licensees, refer to Excise Duty Memorandum EDM7-1-1, Manufacturers of Tobacco Products.

When completing Form B267, 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.

Manufactured in Canada

Line 4 – Cigarettes

In the “Units” column, enter the total number of cigarettes that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of cigarettes you entered by the effective rate of excise duty for stamped cigarettes, and enter the result under “Duty payable”.

Line 5 – Tobacco sticks

In the “Units” column, enter the total number of tobacco sticks that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of tobacco sticks you entered by the effective rate of excise duty for stamped tobacco sticks, and enter the result under “Duty payable”.

Line 6 – Other manufactured tobacco

In the “Units” column, enter the total number of units of 50 grams and fractions of 50 grams of other manufactured tobacco contained in packages that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of units of other manufactured tobacco you entered by the effective rate of excise duty for stamped manufactured tobacco other than cigarettes and tobacco sticks, and enter the result under “Duty payable”.

Line 7 – Cigars

In the “Units” column, enter the total number of cigars that were stamped during the period.

The rate of excise duty on cigars is imposed per 1,000 cigars. To calculate the amount of excise duty payable, multiply the number of cigars you entered by the effective rate of excise duty for stamped cigars, and enter the result under “Duty payable”.

Additional duty on cigars

An additional duty is imposed on cigars at the time of their delivery to a purchaser. The calculation is based either on the set rate per cigar (line 8) or the set percentage computed on the sale price (line 9). For each cigar, only the greater of the result for line 8 and the result for line 9 must be included on the form.

Line 8 – Additional duty on cigars (Rate per cigar)

In the “Units” column, enter the total number of stamped cigars that were delivered to purchasers during the period and on which the additional duty on cigars must be paid at the effective set rate per cigar.

To calculate the amount of additional duty payable, multiply the number of cigars you entered by the effective rate (set dollar amount) of additional duty for cigars, and enter the result under “Duty payable” only if that result is greater than the result calculated for line 9.

Line 9 – Additional duty on cigars (Rate based on sale price)

In the “Units” column, enter the total number of stamped cigars that were delivered to purchasers during the period and on which the additional duty on cigars must be paid at the effective set percentage rate per cigar.

Determine the combined total sale price of these cigars.

To calculate the amount of additional duty payable, multiply the combined total sale price of the cigars delivered to all purchasers by the effective rate (set percentage), and enter the result under “Duty payable” only if that result is greater than the result calculated for line 8.

Line 10 – Raw leaf tobacco

In the “Units” column, enter the total number of kilograms of raw leaf tobacco that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of kilograms of raw leaf tobacco you entered by the effective rate of excise duty for raw leaf tobacco, and enter the result under “Duty payable”.

Line 11 – Total (4 to 10)

Add the amounts from lines 4 to 10 of the “Duty payable” column and enter the total.

Duty free shops / ships’ stores / customs bonded warehouses

Line 12 – Cigarettes

In the “Units” column, enter the total number of cigarettes destined for duty free shops, for use as ships’ stores or for customs bonded warehouses that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of cigarettes you entered by the effective rate of excise duty for stamped cigarettes, and enter the result under “Duty payable”.

Line 13 – Tobacco sticks

In the “Units” column, enter the total number of tobacco sticks destined for duty free shops, for use as ships’ stores or for customs bonded warehouses that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number of tobacco sticks you entered by the effective rate of excise duty for stamped tobacco sticks, and enter the result under “Duty payable”.

Line 14 – Other manufactured tobacco

In the “Units” column, enter the total number of units of 50 grams and fractions of 50 grams of other manufactured tobacco contained in packages destined for duty free shops, for use as ships’ stores or for customs bonded warehouses that were stamped during the period.

To calculate the amount of excise duty payable, multiply the number you entered by the effective rate of excise duty for stamped manufactured tobacco other than cigarettes and tobacco sticks, and enter the result under “Duty payable”.

Line 15 – Total (12 to 14)

Add the amounts from lines 12 to 14 of the “Duty payable” column and enter the total.

Exports not exceeding 1.5% (special duty)

Line 16 – Cigarettes

In the “Units” column, enter the total number of unstamped cigarettes that you manufactured that were removed from your excise warehouse for export during the period in quantities that did not exceed 1.5% of your previous calendar year’s total production of cigarettes.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for unstamped cigarettes manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 17 – Tobacco sticks

In the “Units” column, enter the total number of unstamped tobacco sticks that you manufactured that were removed from your excise warehouse for export during the period in quantities that did not exceed 1.5% of your previous calendar year’s total production of tobacco sticks.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for unstamped tobacco sticks manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 18 – Other manufactured tobacco

In the “Units” column, enter the total number of kilograms contained in packages of unstamped other manufactured tobacco that you manufactured that were removed from your excise warehouse for export during the period in quantities that did not exceed 1.5% of your previous calendar year’s total production of other manufactured tobacco.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for unstamped tobacco products other than cigarettes and tobacco sticks manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 19 – Total (16 to 18)

Add the amounts from lines 16 to 18 of the “Duty payable” column and enter the total.

Exports exceeding 1.5% (special duty)

Line 20 – Cigarettes

In the “Units” column, enter the total number of stamped cigarettes that were exported during the period, including quantities that exceeded 1.5% of your previous calendar year’s total production of cigarettes.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for stamped cigarettes manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 21 – Tobacco sticks

In the “Units” column, enter the total number of stamped tobacco sticks that were exported during the period, including quantities that exceeded 1.5% of your previous calendar year’s total production of tobacco sticks.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for stamped tobacco sticks manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 22 – Other manufactured tobacco

In the “Units” column, enter the total number of units of 50 grams and fractions of 50 grams of other manufactured tobacco contained in stamped packages exported during the period, including quantities that exceeded 1.5% of your previous calendar year’s total production of other manufactured tobacco.

To calculate the amount of special duty payable, multiply the number you entered by the effective rate of special duty for stamped tobacco products other than cigarettes and tobacco sticks manufactured in Canada and exported, and enter the result under “Duty payable”.

Line 23 – Total (20 to 22)

Add the amounts from lines 20 to 22 of the “Duty payable” column and enter the total.

Line 24 – Net payable (11 + 15 + 19 + 23)

Add the amounts from lines 11, 15, 19 and 23 and enter the total.

Line 25 – Refunds (B256 attached)

Enter the total refund claimed on line 25 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 fiscal month but have not yet received it, do not include that information on this return.

Line 26 – Amount due (24 minus 25)

Subtract the amount on line 25 from the amount on line 24. Enter the result on line 26.

Line 27 – Payment / Credit due

Enter the amount from line 26.

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 partially manufactured and raw leaf tobacco in your possession, regardless of who owns them. Do not report inventories of partially manufactured and raw leaf tobacco 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.

Total production

For each column, enter the total quantity, in units or kilograms, of tobacco products produced.

Packaged: Not stamped

To excise warehouse
For each column, enter the total quantity of packaged, unstamped tobacco products placed into an excise warehouse:

• in units for cigarettes, tobacco sticks and cigars
• in kilograms for manufactured tobacco (other than cigarettes and tobacco sticks)

Line A – Opening inventory

For each column, enter the total opening quantity of partially manufactured tobacco and raw leaf tobacco. The opening inventories on line A of this return must equal the closing inventories on line E of the previous return.

Additions to inventory

Total production
In the “Partially manufactured tobacco” column, enter the total quantity of partially manufactured tobacco produced.

Domestic receipts
For each column, enter the total quantity of partially manufactured tobacco and raw leaf tobacco received from all domestic sources.

Imported receipts
For each column, enter the total quantity of partially manufactured tobacco and raw leaf tobacco that you imported.

Line B – Total additions

For each column, add the quantities added to your inventory and enter the total on line B.

Reductions to inventory

Taken for further manufacture
For each column, enter the total quantity of partially manufactured and raw leaf tobacco taken for further manufacture.

Destroyed
For each column, enter the total quantity of partially manufactured and raw leaf tobacco destroyed.

Domestic deliveries
For each column, enter the total quantity of partially manufactured and raw leaf tobacco removed for domestic deliveries.

Exported
For each column, enter the total quantity of partially manufactured tobacco and raw leaf tobacco that you exported.

Line C – Total reductions

For each column, add the quantities removed from your inventory and enter the total on line C.

Line D – Inventory adjustment (+ or −)

For each column, 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

For each column, 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