EDN43 Cigarette Inventory Tax
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EDN43 Cigarette Inventory Tax
March 2017
On March 22, 2017, the Minister of Finance announced proposed amendments to the Excise Act, 2001 to impose a tax on cigarettes held in inventory at 12:01 a.m. on March 23, 2017. This notice provides additional information on this proposed amendment.
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. If the information in this publication does 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.
Any commentary in this notice should not be taken as a statement by the Canada Revenue Agency that the proposed amendment will be enacted in its current form.
Following the announcement in Budget 2017, an inventory tax will apply to cigarettes that display the “Duty Paid Canada Droit Acquitté” stamp and that are held in inventory at 12:01 a.m. on March 23, 2017.
All persons who own cigarettes to be offered for sale must determine their inventories, and those with more than 30,000 cigarettes are required to complete and file Form B273, Excise Return – Cigarette Inventory Tax, on or before May 31, 2017. Inventory must be determined in a fair and reasonable manner as supported by appropriate books and records.
Note that 30,000 cigarettes equates to 150 cartons (200 cigarettes per carton).
The cigarette inventory tax is $0.00265 per cigarette ($0.53 per carton of 200 cigarettes).
Certain retailers who do not hold more than 30,000 cigarettes in a separate retail establishment are exempt from having to file Form B273, and are not liable for the cigarette inventory tax.
The Canada Revenue Agency (CRA) will mail an information package and the updated Form B273 to persons identified as possibly having cigarettes for sale. When the package is mailed out, a notice will be posted on the CRA website to that effect. If you receive this package but do not have cigarettes for sale, please disregard the package.
If you do not receive the information package or the form, please contact any CRA regional excise duty office to obtain a copy. All regional excise duty offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.
The completed Form B273 and payment are both due on or before May 31, 2017.
For more information on this proposed inventory tax, please refer to Excise Duty Notice EDN44, Questions and Answers on the Cigarette Inventory Tax, or contact any CRA regional excise duty office.
Further information
All technical publications related to the Excise Act, 2001 and its regulations are available on the CRA website. Go to cra.gc.ca/exciseduty and click on “Excise Act, 2001 – Technical Information” under the Publications heading.
To request a ruling or interpretation or make a technical enquiry on excise duty, contact one of the regional excise duty offices listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.
- Date modified:
- 2017-03-22