EDN40 Semi-Annual Reporting Period for Certain Licensees

From: Canada Revenue Agency

January 2015

This notice replaces notice EDN27, New Reporting Period for Licensees, dated January 2011.

The purpose of this notice is to provide information to certain licensees on the option of filing excise duty returns twice a year instead of monthly. Licensees must meet specific requirements and be authorized by the CRA to file semi-annual returns.

The information in this notice is for reference purposes only and does not replace the Excise Act, 2001 or its regulations. Should there be any discrepancy between the information in this notice and that contained in the Act or its regulations, the legislative provisions apply. As the information in this publication may not completely address your particular situation, you may wish to refer to the Act or appropriate regulation, or contact any Canada Revenue Agency regional excise duty office for additional information. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

Reporting requirement

Every person who is licensed under the Excise Act, 2001 is required to file an excise duty return for each reporting period and calculate and remit any duty payable.

Generally, a licensee’s reporting period is a fiscal month. However, since December 15, 2010, qualified licensees may request in writing, and the CRA may authorize, a reporting period of a fiscal half-year instead of a fiscal month. Licensees authorized to use a reporting period of a fiscal half-year will file two excise duty returns in a fiscal year, while licensees with a fiscal month reporting period will file 12 returns.

Which licensees may request a fiscal half-year reporting period?

The following licensees may qualify for a fiscal half-year reporting period:

  • excise warehouse licensees who do not hold manufactured tobacco or cigars in their excise warehouse;
  • spirits licensees;
  • wine licensees; and
  • licensed users.

What conditions must be met to qualify?

Licensees may qualify for a fiscal half-year reporting period provided:

  • they have been licensed with the CRA for a period exceeding 12 consecutive fiscal months;
  • they are compliant with the Act;
  • the total of all excise duties payable under Part 4 by the licensee and any associated person did not exceed $120,000 in the previous or current fiscal year;
  • in the case of an excise warehouse licensee who does not hold manufactured tobacco or cigars, the liability of the licensee and any associated excise warehouse licensee with respect to duty on alcohol entered into an excise warehouse did not exceed $120,000 in the previous or current fiscal year;
  • in the case of a licensed user, the liability of the licensee and any associated licensed user with respect to duty on alcohol entered into their specified premises did not exceed $120,000 in the previous or current fiscal year;
  • in the case of a spirits licensee, the litres of absolute ethyl alcohol (LAA) added to the bulk spirits inventory of the licensee and any associated spirits licensee in the previous or current fiscal year did not exceed the amount determined by the formula: $120,000/rate of duty pursuant to section 1 of Schedule 4 (i.e., 10,259 LAA at the current duty rate of $11.696 per LAA); and
  • in the case of a wine licensee, the volume of wine added to the bulk wine inventory of the licensee and any associated wine licensee in the previous or current fiscal year did not exceed the amount determined by the formula: $120,000 ÷ by the rate of duty pursuant to paragraph (c) of Schedule 6 (i.e., 193,548 litres at the current duty rate of $0.62 per litre).

Licensees’ monthly excise duty returns must be filed up-to-date to be considered for semi-annual filing.

For purposes of the Excise Act, 2001, the determination of whether two or more licensees are related or associated generally follows the same rules used under the Income Tax Act.

When to file the excise duty return

All licensees must file their excise duty returns no later than the last day of the fiscal month following the reporting period to which the return relates.

For example, a wine licensee with a half-year reporting period of April 1, 2014 to September 30, 2014 must file Form B265, Excise Duty Return – Wine Licensee, and any excise duty payable by October 31, 2014.

Revocation of the authorization for a fiscal half-year reporting period

An authorization to have a fiscal half-year reporting period will be deemed to be revoked

  • where the licensee exceeds any of the $120,000 thresholds described above; or
  • where an excise warehouse licensee begins to hold manufactured tobacco or cigars.

The revocation will become effective as of the first day after the end of the six-month period in which the excess occurs. However, for an excise warehouse licensee who begins to hold manufactured tobacco or cigars, the revocation occurs as of the first day of the fiscal month in which the licensee begins to hold the tobacco or cigars.

A revocation will also occur when

  • the licensee requests in writing that the CRA do so;
  • the licensee fails to comply with any conditions of the Act; or
  • the CRA considers that the authorization is no longer required.

In those circumstances, the CRA will send the licensee a notice in writing of the revocation and will specify the fiscal month for which the revocation becomes effective.

How to apply for fiscal half-year reporting period

Licensees who want to file their returns twice a year must complete election Form B284, Election or Revocation of the Election for Semi-Annual Reporting, and send it to the Summerside Tax Centre. For questions about the status of your request, call the CRA toll free at 1-877-432-5472 within Canada or 1-902-432-5472 outside Canada.

Additional information

For information on reporting periods and returns, refer to Excise Duty Memoranda EDM10.1.1, Returns and Payments. For additional information on this topic or any technical matter, contact your nearest regional excise duty office. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

All technical publications related to the Excise Act, 2001 and its regulations are available on the CRA website at www.cra.gc.ca/exciseduty, under the title “Excise Act, 2001 – Technical Information”.

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