EDN103 Responsibility for excise duty on packaged alcohol removed from an excise warehouse
Excise Duty Notice
November 2025
This notice clarifies who is responsible for calculating and remitting the excise duty on packaged alcohol removed from an excise warehouse.
Except as otherwise noted, all statutory references in this notice are to the provisions of the Excise Act, 2001. The information in this notice does not replace the law found in the Act and its regulations.
If this information does not completely address your situation, refer to the Act or regulations or contact your regional excise office for additional information. The offices are listed at Contact information – Excise and Specialty Tax Directorate.
On this page
Overview
Excise duty is payable on alcohol (spirits and wine) at the time of packaging unless the alcohol is entered into the excise warehouse of an excise warehouse licensee immediately after being packaged. An excise warehouse is a specified location approved by the Canada Revenue Agency (CRA) at which an excise warehouse licensee stores non-duty-paid packaged alcohol. Each location that a licensee wants to use as an excise warehouse must be listed in a licence application to the CRA and be identified in the CRA's licensing letter. Licensees must have control over the packaged alcohol stored there.
The CRA has determined that "immediately after being packaged" means that the alcohol must be entered into an excise warehouse that belongs to the licensee that packaged the alcohol under their spirits or wine licence. If the packaged alcohol is not immediately entered into the excise warehouse of the licensee that packaged it, then the excise duty imposed at the time of packaging must be paid at that time by the licensee that was responsible for the alcohol at that time, as defined in the Act.
Some removals of packaged alcohol by an excise warehouse licensee transfer the responsibility for excise duty to another licensee or registrant, while other removals require excise duty to be paid by the excise warehouse licensee that possessed the alcohol at the time of removal.
An excise warehouse licensee may remove packaged alcohol in their possession from their excise warehouse without paying duty under certain conditions (including for export, deliveries to licensed users or registered users, delivery to duty free shops, or returns to the supplier). The two most common ways that packaged alcohol is removed from an excise warehouse are:
- delivery to the premises of another excise warehouse licensee (without payment of duty)
- delivery to the duty-paid market (for retail sale)
Delivery to the premises of another excise warehouse licensee (without payment of duty)
An excise warehouse licensee may transfer non-duty-paid packaged alcohol to an excise warehouse of another excise warehouse licensee.
To transfer non-duty-paid packaged alcohol to the excise warehouse of another licensee, the shipping excise warehouse licensee must ensure that the receiving address is a CRA approved excise warehouse for the receiving licensee's excise warehouse licence. The excise warehouse licensee that is shipping the non-duty-paid packaged alcohol must also confirm that the receiving licensee accepts the liability for paying the excise duty on the packaged alcohol, which will become payable at the time the packaged alcohol is removed from an excise warehouse for delivery to the duty-paid market.
Example
A spirits licensee that is also an excise warehouse licensee packages spirits and immediately enters them into their excise warehouse. They have a contract with a provincial liquor authority, and the contract terms state that:
- the provincial liquor authority's distribution warehouse is a CRA approved excise warehouse that will receive the packaged spirits on a non-duty-paid basis
- the provincial liquor authority accepts the liability for paying the excise duty on the packaged spirits at the time they are removed from the provincial liquor authority’s excise warehouse for delivery to the duty-paid market
The spirits licensee can ship the packaged spirits from their excise warehouse licence on a non duty-paid basis. The spirits licensee would report the removal on Form B262, Excise Duty Return – Excise Warehouse Licensee, as "Reductions to inventory: Non-duty-paid / Removed for delivery to other excise warehouses".
It is the responsibility of the excise warehouse licensee that is shipping the packaged alcohol to make sure they have records to show that:
- the shipment is being physically delivered to a CRA approved excise warehouse listed in the receiving licensee's excise warehouse licensing letter
- the receiving licensee is accepting the shipment on a non-duty-paid basis
If the required documents showing compliance are not obtained and kept, the excise warehouse licensee that shipped the packaged alcohol may be held responsible for paying the excise duty.
If an excise warehouse licensee wishes to ship packaged alcohol to another excise warehouse licensee but the delivery address is not a CRA approved excise warehouse, the shipment of packaged alcohol cannot be made on a non-duty-paid basis. The excise warehouse licensee that removes the packaged alcohol from their excise warehouse is responsible for reporting and paying the applicable excise duty on the product.
Example
A spirits licensee that is also an excise warehouse licensee packages spirits and immediately enters them into their excise warehouse. They have a contract with a provincial liquor authority to ship packaged spirits directly to the provincial liquor authority's retail stores. Although the provincial liquor authority has an excise warehouse licence, only its central warehouse is a CRA approved excise warehouse. Direct shipments to retail stores must be duty-paid by the excise warehouse licensee that ships the product.
The spirits licensee must report the removal of the packaged spirits from their excise warehouse licence on Form B262 as "Reductions to inventory: Duty-paid / Packaged". The spirits licensee must also report and pay the applicable excise duty amount in the corresponding product field in the "Duty payable" column on the return.
Delivery to the duty-paid market (for retail sale)
An excise warehouse licensee may remove packaged alcohol from their warehouse for delivery to the duty-paid market (for retail sale).
The excise warehouse licensee must report the removal of the packaged alcohol as "Reductions to inventory: Duty-Paid / Packaged" in the corresponding section of Form B262. The excise warehouse licensee must also report and pay the applicable excise duty amount in the corresponding product field in the "Duty payable" column on the return.
It is important to note that the excise warehouse licensee that physically possesses the packaged alcohol is always responsible for reporting and paying the applicable excise duty when they remove it from their excise warehouse for delivery to the duty-paid market, even if another licensee owns it.
Example
A wine licensee that is also an excise warehouse licensee packages wine that they have produced and also receives bulk wine from another wine licensee, which they package under a contract for service. The wine licensee enters both their own packaged wine and the wine they packaged for the other wine licensee into their excise warehouse immediately after packaging.
The wine licensee removes their own wine from their excise warehouse for sale in a retail store on their premises and ships the wine packaged under contract from their excise warehouse to retail stores as directed by the other wine licensee.
The wine licensee must report both removals of packaged wine from their excise warehouse licence on Form B262 as "Reductions to inventory: Duty-paid / Packaged". The wine licensee must also report and pay the applicable excise duty amount in the corresponding product field in the "Duty payable" column on the return.
Keeping records
All licensees must keep adequate records to show that they have complied with the Act.
Excise warehouse licensees must make sure they have sufficient records to support that:
- any removals reported as "Removed to other excise warehouses" were made to a CRA approved excise warehouse listed in the other excise warehouse licensee's licensing letter
- the other licensee accepts the liability for paying the excise duty on the non-duty-paid packaged alcohol that is shipped
Further information
For all technical publications related to excise duties, go to Excise duties technical information.
For information on how to make a general or technical enquiry on excise duties, go to Contact information – Excise and Specialty Tax Directorate.
For information on how to request a ruling or interpretation related to excise duties, go to Requesting an excise and specialty tax ruling or interpretation.