Eligibility

Collectors, wholesalers, importers and retailers may be eligible for a refund of tax paid or remitted if:

  • the product was sold and all or part of the sale price has not been paid and has become an uncollectible debt
  • the product was lost, destroyed, stolen or contaminated and cannot be sold or used
  • the refund request is within the four year limitation period.

Learn about the time limitation period.

No refund is allowed as an uncollectible debt under the following circumstances:

  • If any portion of the sale price of the taxable product (to which bad debt relates) has been assigned by private contract to a person other than the Minister of Finance (minister). The exception being, where a portion of the sale price has been assigned for security purposes.
  • The sale(s) occurred between a refund claimant and a debtor who were not dealing at arm's length within the meaning of section 251 of the Income Tax Act (Canada) at the time of the sale of the taxable product to which bad debt relates.

No refund is allowed if you:

  • did not hold a valid licence with respect to the handling of the fuel or gasoline at the time of sale or loss, destruction, theft or contamination of the taxable product
  • have already received a refund of the tax or is otherwise entitled under the Act or its regulations to receive or apply for a refund or an allowance in compensation for the tax (such as gasoline retailer's allowance)

No refund is allowed if:

  • we are not satisfied that:
    • the debt is uncollectible (in the case of a bad debt refund), or
    • the taxable product cannot be used or sold and
    • compensation relating to the amount of refund has not been received, or
  • the refund application was not made within the designated four-year time limitation period

Learn about the time limitation period.

Determination of refund amount

Bad debt (excluding receivership or bankruptcy debt)

The refund amount will be equal to the tax portion of the uncollectible debt. Where a portion of the total sale price of the product has been paid, the tax refund is in proportion of the uncollectible debt to total sale price.

Receivership or bankruptcy debt

The refund amount will be equal to the portion of tax paid that the receivership or bankruptcy debt bears to the total sale price for the product.

Product lost, destroyed, stolen or contaminated

The refund amount will be equal to the tax paid on product identified in the claim.

Requirements for applicants who are non-collectors

Bad debt refunds

If you are not a collector, you must submit a refund application together with all other information and documents that we require, including all of the following:

  1. Copies of all invoices for sales claimed in the refund application.
  2. Proof that you remitted or paid to the minister the amount claimed directly or indirectly through another supplier, to the minister.
  3. A signed statement certifying:
    • the amount of the debt; and
    • that you do not have any right to receive total or partial payment in satisfaction of the debt from any person other than the debtor or the debtor's representative.
  4. Proof that all reasonable collection action has been taken to obtain payment of the debt and that the debt is unsecured, uncollectible and has been written off as uncollectible in accordance with generally accepted accounting principles.
  5. If the debt is a receivership debt, a signed statement certifying that you have filed a claim for the debt to which the refund relates with the debtor's receiver.
  6. If the debt is a bankruptcy debt, a copy of your proof of claim in the bankruptcy. In addition, proof that the claim was not disallowed and that you will not receive payment of the debt from the trustee in bankruptcy or another person.
  7. If a bankruptcy debt or a receivership debt, an assignment to the minister of the portion of the debt equal to the amount of the refund claimed.

Bad debt, product loss or contamination

Special note for claims

If your annual claim total is not more than $500, you are not required to send the supporting documentation to the Ministry of Finance (ministry) with your refund application, however, you must retain the supporting documentation for a period of seven years and provide the information to the ministry upon request.

For annual claims over $500, the refund application must be accompanied by the following supporting documentation:

  1. Written confirmation from an insurance company is required in support of any claim for the product loss, with respect to which the refund is being claimed.
  2. Acceptable proof that the tax amount claimed was remitted to your supplier or directly to the minister (receipted purchase invoices as evidence of the payment of the tax and the date of payment).
  3. A copy of any police report for a loss due to theft.
  4. A copy of any fire marshal's report for a loss due to fire, and/or
  5. Any other information that may be required by the ministry to verify the loss, destruction, theft or contamination.

If the refund is for contaminated product, a copy of the incident report must be prepared by a Motor Fuels and Tobacco Tax Inspector.

A separate schedule must be completed for each incident showing the following:

  • Enter the date of the loss
  • Check the type of loss
  • Indicate if you had a valid Technical Standards and Safety Authority (TSSA) Licence during the claim period.

Requirements for applicants who are collectors

Bad debt or product loss/contamination refunds

If you are a collector, the following rules apply:

  • You must deliver an application for the refund with your monthly tax return.
  • You may deduct the refund amount claimed from the amount that would otherwise be remitted to the minister with the return. The deduction should be shown on the return under Adjustments and/or Tax Credits (line 14).
  • The collector is not required to attach the supporting information and documentation to the refund adjustment. However, this documentation must be retained by the collector for subsequent verification by the minister.
  • If all or part of the refund is disallowed, we will issue and serve you a statement of disallowance. You must then remit, with the next tax return or at any earlier time, the amount of the refund disallowed, together with applicable interest, even if an objection or an appeal has been made.

Repayment of refund

Refunds must be returned if debts become collectible, even if the money is received after the 4-year time limitation period.

If you receive payment from the debtor or any other person for all or part of an uncollectible debt after a refund has been made, you must reimburse the minister for the portion of the payment relating to the tax applicable at the date of product sales.

Application forms

Eligible collectors and non-collectors must complete:

To receive a paper copy of the application forms, contact us.

Time limitation period

All tax refunds listed below have a 4-year time limitation period:

Type of ClaimStarting Date for 4 years
Non-bankruptcy bad debtThe last day of the applicant's fiscal year in which the debt was written off as an uncollectible account.
Bankruptcy or receivershipDate on which the claim was filed with trustee in bankruptcy or receiver
Loss, destruction, theft, or contaminationDate incident took place

Additional Information

For more information, refer to the Act and related regulations, or contact the Ministry of Finance by: