News and Insights

British Columbia Bulletin CT 002, “Carbon Tax Refunds for Purchasers”

Tax Development May 24, 2011

British Columbia has issued this new bulletin that explains the circumstances where purchasers of fuel may be eligible for a refund of carbon tax and how to claim a refund.  This bulletin replaces Notice 2008-026, “Carbon Tax Refunds – Purchasers”.  The bulletin does not apply to businesses purchasing fuel as a registered consumer, registered air service or registered marine service.  In addition, the bulletin does not apply to deputy collectors or retail dealers.

Purchasers that acquired fuel for their own use in British Columbia are generally required to pay carbon tax, unless an exemption exists under the legislation, as outlined in the bulletin.  A purchaser may apply for a refund of carbon tax where:

  • carbon tax was paid in error, i.e., an exemption exists and there is no legal obligation for the person to pay the carbon tax;
  • carbon tax is overpaid, e.g., you pay more carbon tax than you should due to an error in calculation; or
  • carbon tax is correctly paid at the time of purchase, but the use of the fuel for a specific purpose qualifies for a refund, e.g., fuel used as feedstock to manufacture another substance.  

The following list summarizes the qualifying refunds of carbon tax available:

  • fuel purchased for own use outside of British Columbia or exported outside the province;
  • sales to status Indians and Indian bands on a reserve;
  • fuels used in connection with official duties of visiting forces and members of the diplomatic and consular corps;
  • fuel used in the operation of an inter-jurisdictional cruise ship that has a scheduled port of call outside of the province;
  • fuel for use in the operation of a ship that is prohibited from coasting trade;
  • fuel purchased by a non-registered consumer or non-registered air service for use in the operation of a qualifying commercial air services;
  • fuel purchased by a non-registered marine service for use in qualifying marine services;
  • fuel for use as a feedstock;
  • fuel for specific non-energy purposes, such as a refrigerant in a closed system in the processing of natural gas; and
  • fuel used as a reductant in the production of lead or zinc.  

Purchasers applying for a refund of carbon tax should use form FIN 108, “Application for Refund of Carbon Tax – Purchaser of Fuel”.  If a purchaser uses fuel in inter-jurisdictional air or marine travel, transport or other services, and are not a registered air or marine service, the purchaser should use form FIN 171, “Refund Application/Return – Carbon Tax – Non-Registered Air or Marine”.  

BC CT 002 

BC FIN 108

BC FIN 171