Excise Taxes and Excise Duties

To Whom Does This Apply?

When certain goods are manufactured in Canada, excise taxes are payable at the time the goods are delivered to the purchaser. When certain goods are imported, excise taxes are payable by the importer, at the time the goods are imported. The Excise Tax Act sets out the rates of excise taxes on these goods.

Excise duties are imposed on spirits, wine, beer, and tobacco products manufactured in Canada. There is also a special duty that applies on imported spirits delivered to or imported by a licensed user. Both, the Excise Act and the Excise Act, 2001 set out the rates of excise duties on these goods.

Summary

What are excise taxes and excise duties?

There are two types of federal commodity levies on products manufactured or produced and packaged in Canada. These levies are applied to a limited range of goods at different rates and in different ways, depending on the product. Excise taxes and excise duties apply to the goods before the GST/HST is added on.

Excise taxes

Excise taxes are charged on goods such as:

• certain petroleum products;
• jewellery;
• heavy automobiles (not trucks);
• automotive air conditioners.

The Excise Tax Act sets out the rates of tax for each of these goods. When goods are manufactured in Canada, excise tax is payable at the time the goods are delivered to the purchaser. When goods are imported, excise tax is payable by the importer, at the time the goods are imported.

Manufacturers require an excise tax licence ("E" licence) unless they qualify as a small manufacturer. To qualify as a small manufacturer, total annual sales must not exceed $50 000.

A wholesaler's licence ("W" licence) allows you to purchase goods for resale without paying excise taxes at the time of purchase; the excise tax is collected and remitted when you sell the goods. You may qualify for a "W" licence under certain circumstances. You may also be able to claim a refund of excise taxes paid.

For information on licensing, returns, and refunds, please call the toll-free number listed below and explain your situation.

Excise duties

There are two legislations that administer Excise Duties. The current Excise Act and the Excise Act, 2001 which was implemented on July 1, 2003.

Excise duties are imposed under the Excise Act, 2001 on spirits, wine, and tobacco products manufactured in Canada. There is also a special duty that applies on imported spirits delivered to or imported by a licensed user. Excise duties on beer continue to be imposed under the Excise Act. Both legislations set out the rates of duty for these goods.

Duty is based on the quantity of goods produced and packaged or manufactured. All producers and packagers or manufacturers of these goods must be licenced and are subject to the bonding provisions set out in the Excise Act and the Excise Act, 2001 and the Regulations.

If you require personal assistance, you may contact the Regional Excise Duty Office closest to you. These offices are located in Halifax, Quebec, Montreal, Ottawa, Toronto, Calgary and Vancouver. For a complete listing, please refer to the Excise Duty Memorandum 1.1.2, Regional Excise Duty Offices in the Related Reading section.

• for Excise Tax information, please call our toll-free number 1-800-959-8287;
• to obtain Excise Tax forms, please call our toll-free number 1-877-432-5472.

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DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon Contact(s):
See National Contact.