As announced in the 2013 Ontario Budget, the fuel tax exemption for biodiesel is repealed effective April 1, 2014, making biodiesel taxed in the same way as diesel fuel.
The information in this guide will help you to complete the Application for Refund Bad Debt (BDT) [PDF - 628 KB]. It also provides information about supporting documents, records retention, time limit for applying for a refund, direct bank deposit and contains information to help you to determine whether you are eligible to claim a refund. This guide is provided as a guideline only and does not replace the law found in the Gasoline Tax Act, Fuel Tax Act and Tobacco Tax Act and related regulations.
Who May Use This Form?
Under the Gasoline Tax Act, Fuel Tax Act and Tobacco Tax Act, wholesalers and retailers may apply for a refund of gasoline/propane/aviation fuel/clear fuel/tobacco tax paid to their supplier on uncollectible sales.
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
- You were not in compliance with legislation requiring licensing, with respect to the handling of taxable product at the time of the sale of the taxable product
- If a refund of the amount of tax has previously been made, or 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 deemed within 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
- the product cannot be used or sold by you and compensation, referable to the amount of the refund, has not been received by you
Include with your refund application the following supporting documentation:
- Copies of all sales invoices on which the tax refund is claimed;
- Copies of receipted purchase invoices from your supplier, sufficient in quantity to cover the amounts that you are claiming.
- The invoices must show:
- the name and address of the vendor and of the purchaser
- the selling price
- the amount of tax charged
- the quantity of product sold
- the date of the sale
- the location where title to the product changed from the vendor to the purchaser
- biodiesel fuel invoices must clearly indicate the percentage of biodiesel component in the purchase
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
- 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 claim was not disallowed
- you will not receive payment of the debt from the trustee in bankruptcy or other 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.
Claims under $500
If your annual claim total is less than $500, you are not required to send the supporting documentation to the Ministry of Finance with your refund application. However, you must retain the supporting documentation noted in the above section, for a period of seven years and provide the information to the ministry upon request.
Provide your federal business number or your MFTT reference number as your Identification No. on the Application. When communicating with the ministry, include your identification number on all correspondence and forms.
Change of Information (Preprinted Application Only)
When completing a preprinted form please make any required corrections by hand on the refund application before submitting.
The Ontario tax rates are found on the tax rate table provided on the Application for Refund Bad Debt (BDT).
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 of Finance 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 of Finance requesting a cancellation.
Records Retention and Time Limit
The refund application must be received by the ministry, within four years from the date of your tax payment. All records, documents and receipts pertaining to your tax refund claim must be kept for seven years for audit purposes.
For further information regarding records retention, please refer to the Tax Information Bulletin entitled 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 contained within the Application for Refund is collected under the authority of the Gasoline Tax Act, R.S.O. 1990, c.G.5, Fuel Tax Act, R.S.O. 1990, c.F.35 and Tobacco Tax Act, R.S.O 1990, c.T.10 and will be used for the purposes of the Gasoline Tax Act, Fuel Tax Act and Tobacco Tax Act. Questions about this information collection should be directed to:
Senior Manager, Account Management
Client Services Branch
Ministry of Finance
33 King Street West, PO Box 625
Oshawa ON L1H 8H9
Mailing Address and Enquiries
Ministry of Finance
Motor Fuels and Tobacco Tax
33 King Street West, PO Box 625
Oshawa ON L1H 8H9
Toll free 1 866 ONT-TAXS (1 866 668-8297)
Hours of Service Monday to Friday 8:30am to 5:00pm
Teletypewriter (TTY) 1 800 263-7776
Fax 905 433-5680
An application for refund includes the Application for Refund Summary – Page 1 and an Application for Refund - Debtor Listing.
- An application for refund includes the Application for Refund - Summary and an Application for Refund – Debtor Listing.
- Each application must be completed for a fiscal year.
- When completing the refund application online, you will be automatically taken from the application summary to the Debtor Listing and back. The calculation of your entries and carry forward of totals are usually performed automatically.
- When completing the refund application by hand, carry forward the totals from the Debtor Listing to the Application for Refund – Summary form.
- The Application for Refund - Summary form must be signed. Please mail the completed application to the Ministry of Finance.
Step 1 Completing the Upper Portion of the Application for Refund – Summary
- Complete a separate Application for Refund for each fiscal year that you are claiming for.
- In the space provided, enter your legal name and address and your identification number.
- Indicate the product type (Gasoline, propane aviation fuel or Fuel – clear fuel, kerosene or Tobacco – cigars, cigarettes) for which the claim is being submitted.
- Indicate if there are any Debtors included in the application which are bankrupt or in receivership.
- If you are claiming for fuel indicate if biodiesel blend purchases are included in the application. Complete Line A by entering the fiscal year in which the Bad Debt was written off as Uncollectible.
- Once the above is completed go to the Application for Refund – Debtor Listing.
- You will be automatically be forwarded to the Application for Refund – Summary when completing the application online.
Note: The Application for Refund – Summary Certification information and signature is to be completed once the schedule and required worksheet(s) are complete.
Step 2 Completing an Application for Refund – Debtor Listing
A separate Application for Refund Summary Bad Debt (BDT) – Page 1 and an Application for Refund – Debtor Listing must be completed for each fiscal year that you are claiming a refund for bad debt.
- If preprinted, verify information. If the information is incorrect, please make the necessary corrections on the application.
- If blank, record your legal name and Identification Number (Business Number or MFTT Reference Number).
- Record each debtor's legal name and mailing address.
- Identify the product and the tax refund claim amount in the "Tax Claimed ($)" column.
- If the debtor is bankrupt or in receivership, enter the name and address of the Trustee or Receiver and the date of filing your claim with the debtor's Trustee or Receiver.
- For each page of Application for Refund – Debtor Listing there will be a calculated sub-total for each product noted in box A, B or C i.e. gasoline, propane, aviation fuel, clear fuel biodiesel, kerosene, cigarettes, cigars and cut tobacco.
- For each page of Application for Refund – Debtor Listing there will be a calculated page total for the product group in box 1 for gasoline, box 2 for clear fuel and box 3 for tobacco (A + B + C).
- For each page of Application for Refund – Debtor Listing there will be calculated a grand total on the last page for each product group i.e. gasoline, fuel and tobacco in the Grand Total box.
- Carry forward the Grand Total amount on the last page of the Application for Refund – Debtor Listing for each product group to the appropriate line of section B on the Application for Refund Summary Bad Debt (BDT) – Page 1.
Step 3 Completing the Lower Portion of the Application for Refund – Summary
Once the Application for Refund – Debtor Listing has been completed return to the Application for Refund – Summary.
Section B's content is carried forward from the Application for Refund – Debtor Listing.
Line C should be the total of lines 1 to 3 of Section B.
If you are completing the application online you can activate the 'Print Completed Package' button at the bottom of the page. The Summary and all Debtor Listings will be printed.
When completing the application online print 2 copies of the Application for Refund – Summary and Application for Refund – Debtor Listing.
Complete the Certification section of the Application for Refund – Summary including an authorized signature and date.
Mail one completed Application for Refund – Summary and Debtor Listing along with all supporting documentation to the ministry at the address shown at the top of the Application for Refund –Bad Debt (BDT)
Maintain one copy for your records.