British Columbia Tax Bulletin CTB 001, “Bad Debts”, discusses how to calculate and claim a bad debt adjustment or refund, the required supporting documentation, and how recoveries may be made after making such an adjustment. This information is applicable to taxes collected under the Carbon Tax Act, the Motor Fuel Tax Act, the Provincial Sales Tax Act, and the Tobacco Tax Act.
The bulletin has been updated to add clarification to the time limits for writing off bad debts, as well as claiming a refund relating to the bad debt write-off. Specifically, a bad debt must be written off within four years of the date the tax was paid or remitted, and a refund claim must be submitted to the Ministry of Finance within four years from the date the bad debt was written off. The example in the bulletin has also been updated to reflect this clarification.