Published: May 2012
Content last reviewed: May 2012

The information in this guide will help beer tax collectors that are not required to complete and file monthly returns (i.e., licensees) complete the Application for Refund – Bad Debt (BDT) form , Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996. This guide also provides information about supporting documents, records retention, time limit to apply for a refund, direct bank deposit, and will help a collector determine whether it has an eligible claim for refund.

The information provided is a guideline only and does not replace the law found in the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, (Act) and related regulations.

Who May Use This Form?

The refund for bad debt is available to beer tax collectors in Ontario who are not required to complete and file monthly returns, and who paid an amount on account of the beer tax on beer sold to a purchaser but for which the purchaser has not provided payment for the purchase and the sale has become an uncollectible sale. Beer tax collectors who are required to complete and file monthly returns and who experience this type of loss claim a credit through their returns.

No refund will be paid if:

  • Any portion of the sale price of the taxable product has been assigned by private contract, with or without recourse, other than for security purposes, to a person other than the Minister of Finance.
  • If a refund of the amount of tax has previously been made, or if you are otherwise entitled under the Act or its Regulations to receive a refund or an allowance in compensation for the amount of tax that is uncollectible.
  • You and the debtor were not dealing at arm's length as defined in section 251 of the Income Tax Act (Canada) at the time of the sale of the taxable product.
  • The Ministry of Finance (ministry) is not satisfied that:
    • the debt is uncollectible, or
    • the product cannot be used or sold by you and compensation, referable to the amount of the refund, has not been received by you.

Note: Not all beer sold in Ontario is subject to the beer tax. For example, beer purchased from the Liquor Control Board of Ontario (LCBO) or from a person who purchased from the LCBO is not subject to the beer tax, nor is imported beer. As a result, no beer tax or amounts on account of the beer tax have been paid on such purchases and no bad debt refund is available from the ministry.

The list of beer manufacturers' brands that are subject to the beer taxes (if not purchased from the LCBO) is available at ontario.ca/finance.

General Information

Complete Your Application for Refund – Bad Debt (BDT) Form Online or By Hand

Visit the ministry's website ontario.ca/finance for the application (enter webpage number "3067" into the "Find page" field located at the bottom of the website). The refund application can be completed online but cannot be submitted online. It must be printed, signed and mailed to the ministry address noted below.

Blank copies of the application for completion by hand can be requested from the ministry by contacting us at 1 866 ONT-TAXS (1 866 668-8297).

Identification Number

Your Identification Number is your Business Number or the Beer and Wine Taxes reference number assigned to you by the ministry.

Change of Information

Please notify the ministry of any changes to your name or address. The ministry address and telephone number are included at the end of this section. When contacting the ministry be sure to use your Identification Number.

Supporting Documents

The Application for Refund – Bad Debt (BDT) must be accompanied by the following supporting documents (where applicable):

  • Copies of all sales invoices on which the tax refund is claimed.
  • Copies of receipted purchase invoices from your supplier, sufficient in product and quantity to confirm that the amount claimed was remitted to the ministry or paid over as required under the Act for remittance to the ministry. The invoices must show:
    • your name and address and that of the purchaser
    • the names of the products sold
    • the selling price
    • the quantity of product sold
    • the date of the sale
    • the location where title to the product changed from the vendor to the purchaser.

The date of invoice payment should be provided and confirmed with copies of cancelled cheques and/or a statement of account.

  • A statement of account with the debtor from the date of the earliest unpaid invoice showing:
    • the account balance as at that date
    • the particulars of all items included in the balance as at that date
    • all subsequent charges and credits
    • particulars of any property or security held or any other transactions which are not reflected in the statement balance.
  • Acceptable proof that the debt for which a tax refund is being claimed is in fact an uncollectible debt as required for tax refund purposes. This includes:
    • all reasonable collection action that has been taken to obtain payment of the debt
    • the debt is unsecured
    • the debt is uncollectible and you have written off the debt as uncollectible in accordance with generally accepted accounting principles.
  • A listing of all uncollectible accounts deducted for the taxation year in which the bad debt account was written off.
  • A copy of your financial statements which reflects the total bad debt expense deducted.
  • A signed statement by you certifying:
    • the amount of the debt
    • you and the debtor were dealing at arm's length as defined in section 251 of the Income Tax Act (Canada) at the time of the sale of the taxable product
    • that you do not have any right to receive any payment in satisfaction of part or all of the debt from any person other than the debtor or the debtor's representative
  • If the debt is a receivership debt, a signed statement by you certifying that you have filed with the debtor's receiver a claim in respect of the debt to which the refund relates.
  • If the debt is a bankruptcy debt,
    • a copy of your proof of claim in respect of the debt to which the application relates
    • proof satisfactory to the Minister that:
      • the proof of claim was not disallowed
      • you will not receive payment of the debt from the trustee in bankruptcy or another person.
  • If a refund of tax is claimed because of a bankruptcy or receivership debt, complete a ministry approved assignment form, to assign the Minister the portion of the debt equal to the refund claimed.

Certification

The application must be signed and dated by an authorized signing officer. The information contained in the application must, to the best of the knowledge and belief of the authorized signing officer, be true, correct and complete.

If this application is signed by a third party (such as your accountant or solicitor), the ministry needs your authorization for the third party to represent you and must have a properly completed Authorizing or Cancelling a Representative form [PDF - 407 KB] for that person in order to process the application. Forms are available on the ministry's website ontario.ca/finance (enter webpage number "113" into the "Find page" field located at the bottom of the website).

The name and title of the person signing the application must be printed legibly in the space provided.

Penalty

In addition to denying all or part of the amount claimed as a refund, a penalty in an amount not more than the amount denied may be assessed where an applicant or another person on the applicant's behalf misrepresents a material fact on or in connection with the refund application or in a document referred to in or delivered in support of the application.

Charges may also be laid and fines result where a person obtains or attempts to obtain a refund by deceit, falsehood or any other fraudulent means.

Direct Bank Deposit

For your refund to be deposited directly into your bank account, please provide a cheque marked "VOID" showing your name and address and attach it to your refund application or mail it to the ministry with a letter requesting direct deposit. Remember to quote your Identification Number on your letter.

If you wish to cancel direct deposit, please send a letter to the ministry requesting a cancellation.

Records Retention and Time Limit

The refund application must be received by the ministry within four (4) years after the last day of the fiscal year you wrote off the debt as an uncollectible account, or if the refund relates to a bankruptcy or receivership debt, the date of your filing of your claim with the debtor's trustee in bankruptcy or receiver.

In order to enable the accurate determination of the tax collectable, payable and refundable under the Act, you are required to keep at your place of business or residence in Ontario:

  • records and books of account in support of all entries on the application, and
  • every document which verifies the information in the records and books.

You must retain these items for a period of seven (7) years following the end of your current fiscal year.

For further information regarding records retention, please refer to the Tax Information Bulletin Retention/Destruction of Books and Records. Copies are available at ontario.ca/finance or by calling the ministry at 1 866 ONT-TAXS (1 866 668-8297).

Freedom of Information

Personal information collected within the Application for Refund – Bad Debt (BDT) is collected under the authority of the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, and will be used for the purposes of ensuring compliance with the legislation and its related regulations. Questions about the collection of this information should be directed to an agent with the ministry at 1 866 ONT-TAXS (1 866 668-8297) or in writing to:

Senior Manager, Account Management
Client Services Branch
Ministry of Finance
33 King Street West
Oshawa ON  L1H 8H5

Telephone: 1 866 ONT-TAXS (1 866 668-8297) ext. 16058

Mail Your Form To:

Mail your completed application with supporting documentation to:

Ministry of Finance
Client Services Branch
33 King St West
PO Box 625
Oshawa ON  L1H 8H9

Enquiries

Address

Ministry of Finance
Client Services Branch
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9

  • Website ontario.ca/finance
  • Toll free 1 866 ONT-TAXS (1 866 668-8297)
  • Teletypewriter (TTY) 1 800 263-7776

Please Note:

  1. An application for refund includes the Application for Refund – Summary form and Application for Refund – Schedule form(s).
  2. When completing the refund application online, select 'Go to debtor listing' button at the bottom of the summary page 1, you will be automatically taken from the application summary to the schedule. Then, by selecting the 'Back to summary' button, it will automatically bring the page from the schedule to the summary page. The carry forward of totals are performed automatically. To print, select the 'Print completed package' button at the bottom of the summary page.
  3. When completing the refund application by hand, carry forward the totals from the schedule pages to the Application for Refund - Summary.
  4. The Application for Refund – Summary must be signed. Please mail the completed application to the Ministry of Finance.

Detailed Instructions

Step 1 - Completing the Upper Portion of the Application for Refund - Summary

  • Note: When completing the application manually, the information you enter must be contained within the box or space provided.
  • Provide your legal name and address along with your Identification Number. If the application contains pre-printed information, verify the information and make the necessary corrections on the application.
  • When completing the application online, provide your legal name and address along with your Identification Number and this information will be carried forward throughout the application.
  • Select the product type.
  • Immediately under the identification area, the form asks whether any of the debtors included in the application are bankrupt or in receivership. Mark the "Yes" or "No" box as applicable.
  • When completing the application online, at the bottom of the page, select the "Go to Debtor Listing" button. This will take you to the debtor listing (Schedule) automatically.

Step 2 - Completing the Application for Refund - Schedule

  • When completing the application manually, provide your Identification Number. If pre-printed, verify information and make the necessary corrections on the application.
  • When completing the application online, your Identification Number will be carried forward from the Application of Refund – Summary.
  • Complete the following steps. Report the tax being claimed in dollars and cents, to the nearest cent.
  1. List Debtors - For each debtor, fill in the following information on the "Application for Refund – Schedule" page(s).
    1. Debtor's Information - Enter the legal name and mailing address of the debtor in the first column of the Schedule.

    2. Tax claimed - Ensure that the beer tax applies to the beer that was sold in the uncollectible sale. For example, if you purchased the beer that was sold in the uncollectible sale from or through the LCBO, that beer is not subject to the beer tax, so do not include that beer in this beer tax refund claim.

      Enter the tax refund claimed in respect of the debtor in the second column of the Schedule. The amount entered for each debtor should include all of the beer tax claimed in respect of the debtor. For example, if you sold more than one type of beer to a debtor in an uncollectible sale, calculate the tax claimed for each beer type sold and enter the total for all beer types in the uncollectible sale in the box for that debtor.

      The tax claimed may consist of three components of the Beer Tax:

      • Basic Tax,
      • Volume Tax, and
      • Environmental Tax (if applicable).

      Basic Tax Calculation

      The basic tax component is calculated by multiplying the number of litres of beer type sold in the uncollectible sale by the beer basic tax rate that applies to the beer type sold in the uncollectible sale.

      There are four beer types, each with its own beer basic tax rate:

      • Beer Manufacturer Draft,
      • Beer Manufacturer Non-Draft,
      • Microbrewer Draft, and
      • Microbrewer Non-Draft.

      In addition to the different beer types, the beer basic tax rates for each beer type are adjusted annually so ensure that the correct rates are used (i.e., not only the beer type sold in the uncollectible sale, but also the rate that applied to that beer type sold in the uncollectible sale when you purchased that beer).

      The beer basic tax rates are available on the ministry website: ontario.ca/finance.

      For example, if 100 litres of non-draft beer from a beer manufacturer was sold in a uncollectible sale and that non-draft beer sold was purchased in August 2010, the basic tax calculation would be:

      100 L × $0.6975/L = $69.75

      Volume Tax Calculation

      The volume tax component is calculated by multiplying the number of litres sold in the uncollectible sale by the beer volume tax rate, which is 17.6¢/L regardless of beer type.

      Environmental Tax Calculation

      The environmental tax component is calculated by multiplying the number of non-refillable containers sold in the uncollectible sale by the environmental tax rate, which is 8.93¢ per non-refillable container. A non-refillable container is a container that the manufacturer of the beer or other person who initially filled the container does not intend to refill (e.g., cans).

    3. Trustee in bankruptcy or receiver - If the debtor is bankrupt or in receivership, enter the legal name and mailing address of the trustee in bankruptcy or receiver in the third column of the Schedule.
    4. Date claim filed - If the debtor is in bankruptcy or in receivership, print the date the claim was filed in the fourth column of the Schedule.
  2. List Additional Debtors - Repeat the step above, listing each debtor and the amount of tax claimed. Each Schedule page has enough space for five debtors. There is a maximum of three (3) pages to list all debtors. If additional pages are required, a separate Application for Refund – Bad Debt (BDT) will need to be completed.

  3. Add the Total Tax Claimed for All Debtors - All totals explained below are automatically calculated when completing the application online.

    At the bottom of each Schedule page there is a "Total" line and beside that a 'Grand Total' line.

    When completing online, the "Total" line will automatically calculate the total tax claimed for that page. The "Grand Total" line will carry forward the 'Total' from each Schedule page completed.

    If completing manually, add the tax claimed for all debtors listed on the page and enter the sum in the box to the right of the "Page ___ Total ($)" box at the bottom of the page. On the last Schedule page, add the "Total ($)" figures from all Schedule pages in your application and enter the sum total in the box to the right of the "Grand Total ($)" box. Enter the "Grand Total ($)" figure in Section C of the "Application for Refund - Summary" page.

Step 3 - Completing the Lower Portion of the Application for Refund - Summary

  • When completing the application manually, carry forward the refund amount calculated on the "Grand Total" on the last Schedule page completed to Section C of the "Application for Refund – Summary" page.
  • The refund claim amount is transferred from the completed Schedules and filled in automatically when the form is completed online.
  • The middle of the "Application for Refund – Summary" page contains a summary information area to complete.
    1. Section A – Ownership information
      In Section A, complete the ownership information.
    2. Section B – Fiscal Year
      In Section B, enter your fiscal year in which the bad debt was written off as uncollectible.
    3. Section C – Refund Claim Amount
      Enter the Grand Total amount from the last Schedule page. The refund claim amount is transferred from the completed Schedule page(s) and filled in automatically when the form is completed online.
  • Complete the Certification section of the Application for Refund – Summary including name, title and telephone number. When completing the application online, print two (2) copies of the Application for Refund – Summary and Application for Refund – Schedule(s).
  • Complete the Certification section of the Application for Refund – Summary including an authorized signature and date.
  • Mail one completed Application for Refund – Summary and Schedule(s) along with all supporting documentation to the ministry.
  • Keep one copy for your records.

Warning

Penalties may be imposed if an applicant for a refund has misrepresented a material fact on or in connection with an application for a refund or in an invoice supporting the application.

Charges may be laid and fines result where a person obtains or attempts to obtain a refund by deceit, falsehood or any fraudulent means.

The application and any refund payment are subject to audit by the Ministry of Finance.