Tax Interpretation Manual: Carbon Tax Act - Regulations

Regulation 1 – Definitions For Regulation

CTR - REG. 1/Act/Int.

“Act”

Reference: Section 84(3)(g)

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “Act” to Regulation 1 to provide that, for the purposes of the Regulations, “Act” means the Carbon Tax Act.

Ctr - Sec.1/Annual Period/Int.

"Annual Period"

Interpretation (Issued: 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 added a definition of "annual period" for the purpose of specifying a reporting period for annual tax filers.

Ctr - Sec.1/Calendar Quarter/Int.

"Calendar Quarter"

Interpretation (Issued: 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 added a definition of "calendar quarter" for the purpose of specifying reporting periods for quarterly tax filers.

CTR - REG. 1/Diesel Fuel/Int.

“Diesel Fuel”

References: Section 1 “registered air services certificate”, “registered consumer certificate”, “registered marine services certificate”, Section 22; Section 84(3)(g); Schedule 1 “diesel engine”, “light fuel oil”; Regulation 1 “heating oil”, “industrial oil”, “locomotive diesel fuel”; Regulation 7

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “diesel fuel” to Regulation 1. Diesel fuel is defined as light fuel oil for use in a diesel engine but does not include locomotive diesel fuel.

This definition, along with the definitions of heating oil, industrial oil and locomotive diesel fuel, supports the prescribed subcategories of fuel listed under Regulation 7 for the purposes of Section 22. That section allows the director to limit the application of a collector's appointment, a registered consumer certificate or a registered air services certificate or registered marine services certificate to a subcategory of a type of fuel.

CTR - REG. 1/Flight/Int.

“Flight”

Reference: Section 84(3)(g)

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “flight“ to Regulation 1. “Flight” is defined as a trip between the takeoff and landing of an aircraft, whether or not the trip is a portion of a longer route.

For example: if an aircraft is flying from Victoria to Calgary via Vancouver, the Victoria to Vancouver leg is considered to be one flight, the Calgary to Vancouver leg another flight.

CTR - REG. 1/Heating Oil/Int.

“Heating Oil”

References: Section 1 “registered air services certificate”, “registered consumer certificate”, “registered marine services certificate”, Section 22; Section 84(3)(g); Schedule 1 “diesel engine”, “light fuel oil”; Regulation 1 “diesel fuel”, “industrial oil”, “locomotive diesel fuel”; Regulation 7; Motor Fuel Tax Section 1 “heating oil”

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “heating oil” to Regulation 1. “Heating oil” is defined as a light fuel oil for use in a furnace, boiler or open flame burner.

Heating oil is a low viscosity, flammable liquid petroleum product used to fuel building furnaces or boilers.

This definition, along with the definitions of diesel fuel, industrial oil and locomotive diesel fuel, supports the prescribed subcategories of fuel listed under Regulation 7 for the purposes of Section 22. That section allows the director to limit the application of a collector's appointment, a registered consumer certificate or a registered air services certificate or registered marine services certificate to a subcategory of a type of fuel.

CTR - REG. 1/Industrial Oil/Int.

“Industrial Oil”

References: Section 1 “registered air services certificate”, “registered consumer certificate”, “registered marine services certificate”, Section 22; Section 84(3)(g); Schedule 1 “diesel engine”, “light fuel oil”; Regulation 1 “diesel fuel”, “heating oil”, “locomotive diesel fuel”; Regulation 7

Interpretation (Issued: 2011/11)

Effective January 1, 2010, B.C. Reg. 258/2009 added a definition of “industrial oil” to Regulation 1. “Industrial oil” is defined as a light fuel oil but does not include diesel fuel, heating oil and locomotive diesel fuel.

Industrial oil is light fuel oil that is used for non-energy purposes, such as feedstock, pipeline pigging or down-hole operations at a well site.

This definition, along with the definitions of diesel fuel, heating oil and locomotive diesel fuel, supports the prescribed subcategories of fuel listed under Regulation 7 for the purposes of Section 22. That section allows the director to limit the application of a collector's appointment, a registered consumer certificate or a registered air services certificate or registered marine services certificate to a subcategory of a type of fuel.

CTR - REG. 1/Interjurisdictional Air Service/Int.

“Interjurisdictional Air Service”

References: Section 84; Regulation 4; Regulation 5; Regulation 18; Regulation 18.1; Regulation 27; Section 39; Section 84(3)(g)

Interpretation (Issued: 2011/11)

Retroactive July 1, 2008, B.C. Reg. 125/2008 was amended by BC Reg. 258/2009 to repeal and replace the definition of “interjurisdictional air service”. The definition includes persons who provide air services other than the transportation of passengers or goods, or both (e.g. aerial surveying, photography, spraying and flight schools).

Interjurisdictional air service means a person who:

(a) Owns or operates a commercial air service that provides

(i) Interprovincial or international air transportation of passengers, goods or both, or

(ii) Interprovincial or international air services other than the transportation of passengers, goods or both to members of the public for a fee, and

(b) Does not have flights that connect two locations in British Columbia in any commercial air service.

Effective July 1, 2008, BC Reg. 125/2008 added the definition of “interjurisdictional air service” to Regulation 1.

Interjurisdictional air services do not provide any domestic air service in British Columbia. They have flights which originate or end in British Columbia but do not have flights which connect two points within British Columbia (e.g. Vancouver to London). Carbon tax applies to fuel used in a flight in British Columbia airspace that connects two points in British Columbia (e.g. Vancouver to Kamloops).

If the interjurisdictional air service is a registered consumer under Regulation 4, then it does not pay carbon tax when it purchases or transfers fuel in the province. Otherwise, if the interjurisdictional air service is not a registered consumer, then the interjurisdictional air service pays the carbon tax when it purchases or transfers fuel the province and would apply for a refund under Regulation 27 or 27.1.

The exemption for interjurisdictional flights under section Regulation 18 and 18.1 only applies to tax paid under Section 11 of the Act.

CTR - REG. 1/Interjurisdictional Leg/Int.

“Interjurisdictional Leg”

References: Section 84; Regulation 4; Regulation 6; Regulation 29; Section 84(3)(g)

Interpretation (Issued: 2011/11, Revised 2014/08)

Effective February 22, 2012, B.C. Reg. 24/2012 amended the definition "interjurisdictional leg" for the purpose of the refunds provided under Regulations 28 and 29. The amendment clarifies the the distinction between an intra-provincial leg and an inter-jurisdictional leg of a marine trip by a commercial marine service to ensure that refunds of carbon tax are only provided for fuel used interjurisdictionally.

Retroactive July 1, 2008, BC Reg. 125/2008 was amended by BC Reg. 258/2009 to remove the words “or near” from the definition of “interjurisdictional leg.”

Effective July 1, 2008, BC Reg. 125/2008 added the definition of “interjurisdictional leg” service to Regulation 1.

Interjurisdictional leg means a segment of a marine trip that either:

(a)

And

(b) includes no stop at port or other similar place during the segment.

CTR - REG. 1/Intraprovincial Leg/Int.

“Intraprovincial Leg”

References: Section 84; Regulation 6; Regulation 28; Section 84(3)(g)

Interpretation (Issued: 2011/11, Revised: 2014/08)

Effective February 22, 2012, B.C. Reg. 24/2012 amended the definition "intraprovinical leg" for the purpose of the refund for provided under Regulation 28. The amendment clarifies the the distinction between an intra-provincial leg and an inter-jurisdictional leg of a marine trip by a commercial marine service to ensure that refunds of carbon tax are only provided for fuel used interjurisdictionally.

Effective July 1, 2008, BC Reg. 125/2008 added the definition of “intraprovincial leg” to Regulation 1.

CTR - REG. 1/Locomotive Diesel Fuel/Int.

“Locomotive Diesel Fuel”

References: Section 1 “registered air services certificate”, “registered consumer certificate”, “registered marine services certificate”, Section 22; Section 84(3)(g); Schedule 1 “diesel engine”, “light fuel oil”; Regulation 1 “diesel fuel”, “heating oil”, “industrial oil”; Regulation 7; Motor Fuel Tax Section 1 “locomotive fuel”

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “locomotive diesel fuel” to Regulation 1. “Locomotive diesel fuel” is defined as a light fuel oil for use in a diesel engine in any rolling stock or other vehicle when run on rails.

Locomotive diesel fuel is essentially the same as diesel fuel but is used on railways. It can be more or less heavy than regular diesel fuel.

This definition, along with the definitions of diesel fuel, heating oil, and industrial oil, supports the prescribed subcategories of fuel listed under Regulation 7 for the purposes of Section 22. That section allows the director to limit the application of a collector's appointment, a registered consumer certificate or a registered air services certificate or registered marine services certificate to a subcategory of a type of fuel.

CTR - REG. 1/Marine Trip/Int.

"Marine Trip"

References: Regulation 28; Regulation 29

Interpretation (Issued: 2014/08)

Effective February 22, 2012, B.C. Reg 24/2012 added a definition of "marine trip" to Regulation 1 for the purpose of the refunds provided under Regulations 28 and 29.

"marine trip" means a trip by a ship that consists of:

(a) one or more interjurisdictional legs,

(b) one or more intraprovincial legs, or

(c)  a combination of

(i) one or more interjurisidictional legs, and

(ii)  one of more intraprovincial legs.

Regulation 2 – Definitions For Act And Regulation

CTR - REG. 2/IFTA Commercial Vehicle/Int.

“IFTA Commercial Vehicle”

References: Section 1 “IFTA commercial vehicle”; Section 84(3)(g); Regulation 2 “recreational vehicle”; Motor Fuel Tax Regulation 1 “IFTA commercial vehicle”

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “IFTA commercial vehicle” to mean a motor vehicle that is used interprovincially or internationally for the commercial carriage of passengers or goods and that

(a) has 2 axles and either a gross vehicle weight or registered gross vehicle weight exceeding 11,800 kg,

(b) has 3 or more axles regardless of weight, or

(c) when combined with the trailer with which it is used, has a gross vehicle weight exceeding 11,800 kg,

but does not include a recreational vehicle.

This definition is the same as that given in the Motor Fuel Tax Act and its regulations.

Under Section 14, fuel used in a licenced IFTA commercial vehicle is exempt from carbon tax. However, an amount equivalent to carbon tax is levied as motor fuel tax, and is in addition to other motor fuel tax, under the Motor Fuel Tax Act. Effectively, the carbon tax was shifted to the Motor Fuel Tax Act. This was done because when the Act was enacted, it was considered administratively simpler to levy all fuel taxes applicable to licensed IFTA commercial vehicles under one Act.

CTR - REG. 2/Recreational Vehicle/Int.

“recreational vehicle”

References: Section 84(3)(g); Regulation 2 “IFTA commercial vehicle”; Motor Fuel Tax Regulation 1 “recreational vehicle”

Interpretation (Issued: 2011/11)

Effective September 2, 2009, B.C. Reg. 200/2009 clarified the definition of “recreational vehicle” by replacing the word “exclusively” with “solely”.

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “recreational vehicle” under Regulation 2 as a vehicle used exclusively* for personal pleasure by an individual, including a motor home, pickup truck with attached camper, and bus.

*See above for amendment effective September 2, 2009.

Recreational vehicles are specifically excluded from the definition of “IFTA commercial vehicle” and cannot qualify for licensing under IFTA.

Regulation 3 – Definitions

CTR - REG. 3/Fiscal Year/Int.

“fiscal year”

References: Section 1 “registered consumer certificate; Section 16; Section 17; Section 84(3)(g); Regulation 4; Regulation 5; Regulation 6

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added a definition of “fiscal year” under Regulation 3 as having two possible meanings:

(a) a period of time that does not exceed 53 weeks any time (for example June 1, 2009 to May 30, 2009), or

(b) a calendar year (January 1 to December 31). This is the default meaning, if a person has not chosen a particular period of time as above for financial reporting and income tax purposes.

The term “fiscal year” only applies to Part 2 – Issuance of Certificates and is used to determine eligibility for certificates. For example, under Regulation 4(2)(c), a person would be eligible for a registered consumer certificate if they used at least 50 per cent of a type, or a subcategory of a type, of fuel for a purpose set out in Sections 16 or 17 during the fiscal year that ended immediately before the date they applied for certificate.

Regulation 4 – Registered Consumer Certificate

CTR - REG. 4/Int.

References: Section 20; Section 84; Regulation 16; Regulation 17

Interpretation (Issued: 2011/11)

Retroactive July 1, 2008, BC Reg. 258/2009 amended paragraph (3) to remove the requirement of holding an operating certificate issued by Transport Canada for each type of aircraft owned or operated by the interjurisdictional air service unless it is required by Transport Canada. In addition, the amendment removed the requirement that all flights offered by the interjurisdictional air service that begin or end in British Columbia must be authorized by the Canadian Transportation Agency and Transport Canada.

Effective September 2, 2009, BC Reg. 200/2009 amended Regulation 4(2)(c) by removing the reference to Regulation 17 and replacing it with Regulation 17(1). Persons who combust coke, high heat value coal, low heat value coal, petroleum coke or a combination of these items as a reluctant in the production of lead or zinc are not eligible to become registered consumers (Regulation 17(2) and Regulation 17(3)).

Effective July 1, 2008, BC Reg. 125/2008 prescribes who the director may issue a registered consumer certificate to under Section 20 of the Act. Registered consumers may purchase specific types of fuel without paying carbon tax at the time of purchase. They are required to self-assess and pay the carbon tax for the type of fuel indicated on their certificate that is used for a taxable purpose in British Columbia.

Regulation 4(1) provides a definition of “interjurisdictional rail service” as a person who owns or operates a commercial rail service that offers interprovincial or international rail service to transport goods, passengers or both for a fee.

Regulation 4(2) describes categories of consumers who may be issued a registered consumer certificate. The categories include:

(a) Interjurisdictional rail services,

(b) Interjurisdictional air services, and

(c) Purchasers that use at least 50 per cent of a type or subcategory of a type of fuel for feedstock or for a non energy use, as stated in Regulations 16 and 17(1), in the fiscal year that ended before the date the purchaser applied for the certificate.

Regulation 4(3) states the requirements that must be met by an interjurisdictional air service before the director may issue a registered consumer certificate. The interjurisdictional air service must hold a license issued by the Canadian Transportation Agency and if required by Transport Canada, an operating certificate issued by Transport Canada for each aircraft owned or operated by the air service.

R.1 Fuel Used Outside of British Columbia for an Exempt Use (Issued 2011/11)

A registered consumer certificate may be issued if a purchaser purchases fuel in BC for export for an exempt purpose as stated in Regulations 16 and 17. While the exempt use takes place outside of BC, the regulation does not explicitly limit the qualification for the certificate to activities that occur in BC. The director may ask the company for proof of the out of province use of the fuel for an exempt purpose, such as production records etc.

Regulation 5 – Registered Air Service Certificate

CTR - REG. 5/Int.

References: Section 21; Section 84; Regulation 12

Interpretation (Issued: 2011/11)

Effective September 2, 2009, BC Reg. 200/2009 amended Regulation 5(1) to allow the director to issue a registered air certificate to a person if:

  • That person owns or operates a commercial air service that provides air services other than the transportation of passengers or goods to members of the public for a fee, and
  •  During the fiscal year that ends immediately before the date of application, at least 50 per cent of the fuel used by that person was used in flights that did not begin or end in British Columbia.

Regulation 5(2) was amended to clarify the requirements that have to be met before the director can issue a registered air certificate (see below).

Effective July 1, 2008, BC Reg.125/2008 prescribes who the director may issue a registered air service certificate to under Section 21 of the Act.

Regulation 5(1) describes the type of commercial air service that a person must own or operate before they can be issued a registered air certificate. The commercial air service must offer:

(a) Air transportation of passengers, goods or both to members of the public for a fee, or

(b) Effective September 2, 2009, air services other than the transportation of passengers, goods, or both to members of the public for a fee.

Additionally, 50 per cent of the flights must not both begin and end in BC.

Regulation 5(2) describes the requirements the commercial air service must meet before the director may issue a registered air certificate to the owner or operator.

Prior to September 2, 2009, the air service must have held a license issued by the Canadian Transportation Agency and an operating certificate issued by Transport Canada for each aircraft owned or operated by the commercial air service. As well, all flights offered by the person as part of the commercial air service must have been authorized by the both the Canadian Transportation Agency and Transport Canada.

Effective September 2, 2009, the air service must hold a license issued by the Canadian Transportation Agency and hold, if required by Transport Canada an operating certificate issued by Transport Canada for each type of aircraft that is part of the commercial air service owned or operated by that person.

Regulation 6 – Registered Marine Service Certificate

CTR - REG. 6/Int.

References: Section 1 “registered marine services certificate; Section 21; Section 84; Regulation 12

Interpretation (Issued: 2011/11)

Retroactive July 1, 2008, BC Reg. 258/2009 amends Regulation 6 to clarify the eligibility for a registered marine service certificate by removing the reference to “for a fee on a scheduled or chartered basis”. Paragraph (5) was added to clarify that for the purposes of paragraphs (1) and (2), if the provision of a commercial marine service involves two or more ships, the trips of each ship must be considered separately in the calculation of trips under those subsections.

Effective July 1, 2008, BC Reg. 125/2008 prescribes the conditions where the director may issue a registered marine service certificate under Section 21 of the Act.

A person may be eligible for a registered marine service certificate if:

  • They own or operate a commercial marine service that provides marine transportation of passengers, goods or both to members of the public for a fee on ships owned or operated by the person, and
  • At least 50 per cent of all the trips of all their ships that begin or end in British Columbia are trips that do not involve carrying passengers or goods loaded at one location in British Columbia, to the same or another location in the province for unloading.

A person may also be eligible for a registered marine service certificate if:

  • They own or operate a commercial marine service that provides marine services, other than the marine transportation of passengers, goods, or both to members of the public, for a fee using ships owned or operated by the person, and
  • At least 50 per cent of all the trips of all their ships that begin or end in British Columbia also include a stop at a port outside of British Columbia.

Regulation 7 – Subcategories Of Types Of Fuel

CTR - REG. 7/Int.

References: Section 1 “registered air services certificate”, “registered consumer certificate”, “registered marine services certificate”, Section 22; Section 84(3)(i); Regulation 1 “diesel fuel”, “heating oil”, “industrial oil”, “locomotive diesel fuel”;

Interpretation (Issued: 2011/11)

Effective January 1, 2010, B.C. Reg. 294/2009 added the following subcategory of a type of fuel to Regulation 7:

(d) industrial oil.

Effective July 1, 2008, Section 22 allows the director to limit the application of a collector's appointment, a registered consumer certificate or a registered air services certificate or registered marine services certificate to a subcategory of a type of fuel. Regulation 7, added by B.C. Reg. 125/2008, lists those types of fuel:

(a) Diesel fuel,

(b) heating oil, and

(c) Locomotive diesel fuel.

For example, an interjurisdictional rail service may hold a registered consumer certificate for locomotive diesel fuel.

Regulation 7.1 – Cancellation Of Certificates

CTR - REG. 7.1/Int.

References: Section 1 “registration certificate”, “retail dealer”; Section 84(3)(i)

Interpretation (Issued: 2011/11)

Effective July 1, 2010, B.C. Reg. 106/2010 added Regulation 7.1 which requires the director to cancel every registration certificate that authorizes a retail dealer to sell propane, effective July 1, 2010.

The addition was consequential to the propane being included in security scheme under the Act. See Notice 2010-004 – Notice to Propane Sellers – Carbon Tax for more information.

Section 8 – Collectors

Ctr - Sec. 8/Int.

References:

Act: Section 1 “collector”; Section 28; Section 30; Section 84

Interpretation (Issued: 2011/11; Revised: 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 amended MFTR subsections 8(1), 8(3), 8(4) and 8(5) for greater clarity. Subsections (3) and (4) reference tax collected or security payable on sales for the quarterly and annual reporting periods.

Effective September 2, 2009, B.C. Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under MFTR subsection 8(4) from August 15th to July 15th. Therefore, returns that are remitted on an annual basis are now due on July 15th.

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added MFTR section 8 to prescribe the due dates for collectors to deliver returns and remit the tax collected or pay the security payable under the Act.

Section 9 – Deputy Collectors And Retail Dealers

Ctr - Sec. 9/Int.

References:

Act: Section 1 “deputy collector”, “retail dealer”; Section 26; Section 84; Motor Fuel Tax Regulation 2.04

Interpretation (Issued: 2011/11; Revised: 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 repealed and replaced MFTR section 9 to permit for annual and quarterly tax remittances for deputy collectors and retail dealers in respect of tax collected under subsection 26(4) of the Act. Under section 9, on or before the 15th of the month following the end of a reporting period, a deputy collector or retail dealer must deliver a return and remit with the return the tax collected.

Subsection 26(4) states that a retail dealer or deputy collector who does not remit the tax collected in accordance with subsections 26(2) or 26(3) must remit tax collected to the director at the prescribed time and in the prescribed manner. MFTR section 9 sets out these conditions.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 9 to prescribe the due dates for deputy collectors and retail dealers to deliver returns and remit the tax collected or security payable under the Act.

Section 10 – Retail Dealers Of Natural Gas

Ctr - Sec. 10/Int.

References:

Act: Section 1 “retail dealer”; Section 28; Section 84

Interpretation (Issued: 2011/11; Revised: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 amended MTFR section 10 for greater clarity. Subsections (3) and (4) reference tax collected on sales of natural gas for the quarterly and annual reporting periods. Subsection (5) added a nil return requirement to reflect current administrative practice.

Effective September 2, 2009, B.C. Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under MFTR subsection 10(4) from August 15th to July 15th. Therefore, returns that are remitted on an annual basis are now due on July 15th.

Effective July 1, 2008, B.C. Reg. 125/2008 added MFTR subsection 10 to prescribe the manner in which returns and tax are required to be remitted for retail dealers of natural gas. Dealers of natural gas are not within the security scheme and therefore have different requirements for remitting taxes.

Note: this regulation applied to retailers of marketable natural gas and propane prior to January 1, 2010, and retailers of natural gas and propane from January 1, 2010 to June 30, 2010. Amendments were made by B.C. Reg. 294/2009 and 106/2010.

Section 10.1 - Amounts Collected As If Tax

Ctr - Sec.10.1/Int.

References:

Act: Section 1 "tax"; Section 35.1

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg.180/2016 added CTR section 10.1. The section prescribes the due dates for a person to deliver returns and to remit an amount collected as if it were tax under subsection 28(3) [remittance to government] of the Act.

Section 10.2 - Fuel Sold To Retail Dealers By Persons Other Than Collectors Or Deputy Collectors

Ctr - Sec.10.2/Int.

References:

Act: Section 1 "collector", "deputy collector", "retail dealer", "tax"; Section 28

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg.180/2016 added CTR section 10.2. The section prescribes a due date of on or before the 15th of the month for a person to deliver a return and to remit money received in respect of tax payable on fuel under subsection 28(4) of the Act in the previous month.

Section 10.3 - Amounts Received As Security Or As If Security

Ctr - Sec.10.3/Int.

References:

Act: Section 1 "collector", "deputy collector", "retail dealer", "tax"; Section 28

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg.180/2016 added CTA section 10.3. The section prescribes the due dates for a person to deliver returns and to remit an amount under subsection 28(5) of the Act. Subsection 28(5) of the Act provides that a person who sells fuel and receives security or an amount as if it were security that exceeds the amount of security they paid, must remit the excess amount to government.

Section 11 – Fuel Used By Registered Consumers

Ctr - Sec. 11/Int.

References:

Act: Section 1 “ registered consumer”; Section 26; Section 84

CTR: Section 1 “interjurisdictional air service”

Interpretation (Issued: 2011/11; Revised: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 repealed and replaced CTR section 11 for greater clarity. The section prescribes the due dates for registered consumers to deliver returns and to remit an amount of tax payable on fuel that is used by the person under subsection 8.1(1) [imposition of tax on fuel used for new purpose] or section 11 [imposition of tax on use of fuel] of the Act.

Effective September 2, 2009, B.C. Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under CTR subsection 11(4) from August 15th to July 15th. Therefore, returns that are remitted on an annual basis are now due on July 15th.

Effective July 1, 2008, B.C. Reg. 125/2008 added CTR subsection 11 to prescribe the requirements for delivering returns and paying taxes by registered consumers.

Section 12 – Fuel Purchased, Transferred, Brought Or Sent Into British Columbia By Registered Air Services And Registered Marine Services

Ctr - Sec. 12/Int.

References:

Act: Section 1 “registered air service”, “registered marine service”; Section 8; Section 9; Section 10; Section 11; Section 84

Interpretation (Issued: 2011/11; Revised: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 repealed and replaced CTR section 12 for greater clarity. Section 12 prescribes due dates for registered air services and registered marine services to deliver returns and to remit an amount of tax payable on fuel that is purchased, transferred, bought or sent into BC. Tax is self-assessed based on the amount of fuel used or the amount that is determined will not be used (e.g., spillage) in the previous reporting period.

Effective September 2, 2009, BC Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under CTR subsection 12(5) from August 15th to July 15th. Therefore, returns that are remitted on an annual basis are now due on July 15th.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 12 to set out the requirements for delivering returns and paying taxes by registered air services and registered marine services.

Section 12.1 - Fuel Used By Registered Air Services And Registered Marine Services

Ctr - Sec.12.1/Int.

References:

Act: Section 1 "registered air service", "registered marine service"; Section 8; Section 9; Section 10; Section 11; Section 84

Interpretation (Issued: 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 repealed CTR section 12 and added CTR section 12.1 for greater clarity. Section 12.1 prescribes due dates for registered air services and registered marine services to deliver returns and to remit an amount of tax payable on fuel that is used in BC. The content was previously found under CTR subsection 12(2).

Section 13 – Payment Of Tax

Ctr - Sec. 13/Int.

References:

Act: Section 1.1, Section 8.1; Section 84(3)(d)

Interpretation (Issued: 2011/11; Revised 2017/05)

Effective August 1, 2016, B.C. Reg. 180/2016 repealed and replaced CTR section 13 for greater clarity. The section prescribes the due dates for persons to deliver returns and pay the amount of tax payable under subsection 8(6) [imposition of tax on purchase of fuel] for fuel imported by ship under certain circumstances as outlined under section 1.1 of the Act.

Effective September 2, 2009, B.C. Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under CTR subsection 13(6) from August 28 to July 28. Therefore, returns that are remitted on an annual basis are now due on July 28.

Effective July 1, 2008, B.C. Reg. 125/2008 added CTR section 13 to prescribe the time and manner in which tax must be paid:

Section 13.1 - Fuel Used For New Purpose

Ctr - Sec.13.1/Int.

References:

Act: Section 8.1; Section 84(3)(d)

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 added CTR section 13.1 for greater clarity. The section prescribes the due dates for persons to deliver returns and pay the amount of tax payable under subsection 8.1(1) [imposition of tax on fuel used for new purpose] of the Act. The content of this provision was previously found under CTR subsection 13(0.2).

Section 13.2 - Fuel Transferred, Brought Or Sent Into British Columbia

Ctr - Sec.13.2/Int.

References:

Act: Section 9; Section 10; Section 84(3)(d)

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 added CTR section 13.2 for greater clarity. The section prescribes the due dates for persons to deliver returns and pay the amount of tax payable on fuel that the person transferred, brought or sent into BC. Tax is self-assessed based on the amount of fuel used or the amount that is determined will not be used (e.g., spillage) in the previous reporting period.

The contents of this provision were previously found under CTR subsection 13(1).

Section 13.3 - Fuel Used In British Coloumbia

Ctr - Sec.13.3/Int.

References:

Act: Section 11; Section 12.1; Section 84(3)(d)

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 added CTR section 13.3 for greater clarity. The section prescribes the due dates for persons to deliver returns and pay the amount of tax payable under section 11 [imposition of tax on use of fuel] of the Act. The contents of the provision were previously found under CTR subsection 13(2).

Section 13.4 - Combustibles Burned Within British Columbia

Ctr - Sec.13.4/Int.

References:

Act: Section 12; Section 84(3)(d)

Interpretation (Issued: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 added CTR section 13.4 for greater clarity. The section prescribes the due dates for persons to deliver returns and pay the amount of tax payable under section 12 [imposition of tax on combustible] of the Act. The contents of the provision were previously found under CTR subsection 13(2).

Regulation 14 – Payment Of Refund Of Security

CTR - REG. 14/Int.

References: Section 1 “retail dealer”, “vendor”, “wholesale dealer”; Section 37; Motor Fuel Tax Regulation 2.03

Interpretation (Issued: 2011/11)

Subsection 37(4) provides that if a vendor, wholesale dealer or retail dealer receives a refund of security and subsequently receives security or collects tax on the fuel, the vendor, wholesale dealer or retail dealer must pay the amount received to the government.

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 14 to prescribe the time and manner in which this security or tax must be paid. The security or tax must be paid to the government on or before the 15th day of the month following the month that the vendor, wholesale dealer or retail dealer received or collected an amount under Subsection 37(4).

For example, if tax was subsequently received in June, the vendor would be required to pay the amount by July 15.

Regulation 15 – Exemption For Fuel In Types Of Containers

CTR - REG. 15/Int.

References: Section 84(3)(m); Regulation 22

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 15 to provide that fuel contained in a sealed, prepackaged container that holds not more than four litres is exempt from carbon tax. These products are not taxed because it would be impractical and immaterial to impose tax.

Note: under Regulation 22, sales of fuel in a sealed, prepackaged container that holds not more than four litres are exempt from security.

Regulation 16 – Exemption – Feedstock

CTR - REG. 16/Int.

Reference: Section 11

Interpretation (Issued: 2011/11, Revised: 2014/08)

Effective January 1, 2014, B.C. Reg. 246/2013 amended Regulation 16 by replacing "tax under section" with "tax imposed under section." The change was made to make clarify the wording and make the language consist with that used in the Provincial Sales Tax Act.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 16 to provide that fuel that is not combusted when used as a raw material in an industrial process either

(a) to produce or upgrade another fuel, or

(b) to manufacture another substance

is exempt from tax under Section 11 of the Act.

Generally, the Act taxes emissions which most often result from combustion. If fuel is not combusted when used as a raw material, for example, natural gas is used to make fertilizer or fuel is used to make plastic, then there are no greenhouse gas emissions resulting from that use of fuel. Therefore, the fuel use is not taxed.

Regulation 17 – Exemption For Non-Energy Uses Of Fuel

CTR - REG. 17/Int.

References: Section 1 “natural gas”; Section 84(3)(l); Regulation 16; Regulation 26

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 amended Regulation 17 by replacing "tax under section" with "tax imposed under section." The change was made to clarify the wording and make the language consist with that used in the Provincial Sales Tax Act.

Effective January 1, 2010, B.C. Reg. 294/2009 amended Regulation 17 by removing the word “marketable” from “marketable natural gas” as the distinction between raw and marketable natural gas was eliminated. As a result, all natural gas is treated the same regardless of where it is used or sold.

Effective September 2, 2009, B.C. Reg. 200/2009 added paragraph (1)(g) to Regulation 17 to also provide an exemption for fuel that was not combusted when used for the following non-energy use:

(g) As anti-freeze in a natural gas pipeline.

Additionally, Subsections (2) and (3) were amended to include petroleum coke in the list of items for which an exemption under these subsections may apply.

Effective February 1, 2009, B.C. Reg. 13/2009 repealed and replaced the calculations for exemptions under Subsections (2) and (3) when coke, high heat value coal, low heat value coal or combination of these items was combusted as a reductant in the production of lead or zinc.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 26 to provide an exemption from taxes payable on fuel that was not combusted when used for the following non-energy uses:

(a) As a raw material to manufacture anodes for use in an electrolytic process for smelting aluminum;

(b) As a reagent to separate out coal or ores of metal in an industrial floatation process;

(c) In pipeline pigging;

(d) In down-hole operations at a well site;

(e) To remove natural gas liquids or impurities in the processing of marketable* natural gas;

(f) As a refrigerant in a closed system in the processing of marketable* natural gas.

*See amendment above effective January 1, 2010.

Generally, the Act taxes emissions which most often result from combustion. Since there are generally no emissions from non-energy uses of fuel, fuel is not taxed. While Regulation 16 exempts fuel used as feedstock, Regulation 17 exempts fuel used in various non energy uses.

Subsections (2) and (3) provide formulas for calculating the amount the exemption when coke, high heat value coal, low heat value coal, petroleum coke (effective September 2, 2009) or a combination of these items was combusted as a reductant in the production of lead or zinc.

See CTA/REG. 26/Int. regarding refunds for non-energy uses of fuel.

Regulation 18 – Exemption – Interjurisdictional Passenger And Cargo Flights

CTR - REG. 18/Int.

References: Section 84(3)(m); Regulation 1 “flight”, “interjurisdictional air service”; Regulation 4; Regulation 5; Regulation 27

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 amended Regulation 18 by replacing "tax under section" with "tax imposed under section." The change was made to clarify the wording and make the language consist with that used in the Provincial Sales Tax Act.

Retroactive July 1, 2008, BC Reg. 258/2008 amended Regulation 18 to clarify in which circumstances fuel used for an interjurisdictional passenger and cargo flight is exempt from tax under Section 11. Paragraph (2) was also repealed.

Fuel used in an interjurisdictional passenger and cargo flight is exempt from tax if the flight:

  • Is operated by a commercial air service,
  • Is provided to members of the public for a fee,
  • Transports passengers, goods or both, and
  • Begins or ends outside British Columbia.

A commercial air service must have a license issued by the Canadian Transportation Agency, and if required by Transport Canada, an operating certificate for the type of aircraft used in the flight.

Effective July 1, 2008, BC Reg. 125/2008 prescribed the circumstances in which fuel used for an interjurisdictional passenger and cargo flight is exempt from tax under Section 11 of the Act.

  • The flight must have been offered by a commercial air service to members of the public for a fee. (e.g. a passenger purchases a ticket, a shipping company contracts with a company to transport goods, etc);
  • The flight must have transport passengers, goods or both on a scheduled or chartered basis;
  • The flight must have begun or ended outside of British Columbia. For example, a flight begins in Vancouver and ends in Hong Kong; and
  • The commercial air service must have been authorized by the Canadian Transportation Agency and Transport Canada.

Regulation 18(2) prescribed the circumstances in which tax on fuel is exempt under Section 14(2)(f) of the Act for a registered consumer.

Subject to Regulation 4, the director may issue a registered consumer certificate to an interjurisdictional air service.

Regulation 18.1 – Exemption – Interjurisdictional Air Services Flights

CTR - REG. 18.1/Int.

References: Section 11; Section 84(3)(m); Regulation 1 “flight”, “interjurisdictional air service”; Regulation 4; Regulation 5; Regulation 27.1

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 amended Regulation 18.1 by replacing "tax under section" with "tax imposed under section." The change was made to make clarify the wording and make the language consist with that used in the Provincial Sales Tax Act.

Retroactive July 1, 2008, BC Reg. 258/2008 added Regulation 18.1 to clarify in which circumstances fuel used in an interjurisdictional air service flight is exempt from tax under Section 11 of Act.

Fuel used in an interjusidictional air service flight is exempt from tax if the flight:

  • Is operated by a commercial air service,
  • Is provided to members of the public for a fee,
  • Provides an air service other than the transportation of passengers, goods or both (e.g. aerial surveying, photography, spraying and flight schools), and
  • Begins or ends outside British Columbia.

The commercial air service must have a license issued by the Canadian Transportation Agency, and if required by Transport Canada, an operating certificate for the type of aircraft used in the flight.

Regulation 19 – Exemption – Cruise Ships

CTR - REG. 19/Int.

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 19 to provide that fuel for use in the operation of a cruise ship for a cruise that

(a) is offered to members of the public for a fee, and

(b) has a scheduled port of call outside of British Columbia,

is exempt from tax under the Act.

Regulation 20 – Exemption – Not Coasting Trade

CTR - REG. 20/Int.

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 20 to provide that fuel for use in the operation of a ship, other than a cruise ship, that

(a) is prohibited from coasting trade under the Coasting Trade Act (Canada), and

(b) does not engage in coasting trade, within the meaning of the Coasting Trade Act (Canada),

is exempt from carbon tax.

“Coasting trade” as used in the federal Coasting Trade Act effectively means cargo carried between two ports in British Columbia. Cargo ships that are prohibited from coasting trade under the federal Act are international and exempt from the carbon tax.

In Budget 2008, it was announced that fuel used for trips between two ports in BC would be subject to the carbon tax. Consultation with industry determined that would require the registration of approximately 3,500 ships, the overwhelming majority of which (in excess of 95%) would be entirely exempt from the tax because they do not travel between two ports in BC. This would have imposed a very significant compliance burden on industry and administrative burden on government.

For this reason the decision was taken to rely on the federal Coasting Trade Act to distinguish between exempt international shipping and taxable domestic shipping.

Regulation 20.1 - Exemption Farmers

CTR - REG. 20.1/Int.

References: Section 14

Interpretation (Issued: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 added Regulation 20.1. Regulation 20.1 sets out the prescribed types of fuel and purposes for the purposes of section 14(2)(g) . Regulation 20.1 is intended to be read together with section 14 to establish the full conditions for exemption under section 14.

Subsection (1) provides a series of definitions for the purposes of subsection (2). The definitions of "farm," "farm truck," "highway," "motor vehicle" and "tractor" mirror the same definitions in the Motor Fuel Tax Act. The definition of "industrial machine" lists the various types of equipment.

Subsection (2) prescribes the eligible purposes for section 14(2)(g) of the Act. Those purposes are:

  1. operating a ship (for example in the case of an aquaculture farm);
  2. operating a tractor when used off highway;
  3. operating an industrial machine when used off highway;
  4. operating a stationary engine or portable engine;
  5. operating a tractor when used on a highway by or on behalf of a farmer for the purposes of the farmer's farm;
  6. operating a farm truck being used by a farmer or other person in the operation of the farm;
  7. operating a motor vehicle that is not licensed to operated on a highway when used off highway;
  8. operating a tractor, an industrial machine or a motor vehicle referred to in #7, when proceeding to or returning from a location where the use of the fuel in the vehicle is otherwise authorized under 2. 3. or 7.

Subsection (3) sets the prescribed class of a type of fuel or of a subcategory of a type of fuel. The prescribed class of a type fuel is gasoline that is coloured in accordance with the Motor Fuel Tax Act and its regulations. The prescribed subcategory of a type of fuel is diesel fuel that is coloured in accordance with the Motor Fuel Tax Act and its regulations.

Subsection (4) adds an additional condition to the exemption. In addition to the other conditions, the exemption only applies if the:

  1. retail dealer delivers the fuel to a storage receptacle located on the farmer's farm;
  2. fuel is purchased on account from a bulk agent, or
  3. fuel is purchased through a cardlock system.

In cases where a person is not eligible for a point of sale exemption due only to subsection (4), the person is eligible to apply for a refund under section 39.1 of the Act.

Regulation 20.2 - Persons Selling To Farmers

CTR - REG. 20.2/Int.

References: Section 14, Regulation 20.1

Interpretation (Issued: 2014/08)

Effective January 1, 2014, B.C. Reg. 246/2013 added Regulation 20.2. The regulation requires that a retail dealer who sells fuel to a person who claims the famer's exemption under section 14(2)(g), must ensure the sale meets the requirements under section 20.1(4). The provision is intended to mirror Regulation 15.5 in the Motor Fuel Tax Act Regulation.

Regulation 21 – Exemption For Visiting Forces

CTR - REG. 21/Int.

References: Section 84(3)(m); Motor Fuel Tax Regulation 51

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 21 to provide that visiting military forces, as defined by Section 2 of the Visiting Forces Act (Canada) are exempt from the carbon tax as a result of Canada's obligations under international agreements and treaties.

Regulation 22 – Security Exemption

CTR - REG. 22/Int.

References: Section 84(3)(m); Regulation 15

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 22 to provide that no security is paid on a sealed, pre-packaged container that holds not more than four litres of fuel. This is because sales of such products are exempt from tax under Regulation 15.

Regulation 22.1 - Definitions

CTR - REG.22.1/Biomethane Contract/Int.

Biomethane Contract

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds a definition for "biomethane contract" to the regulations. The definition is added for the purposes of the biomethane credit program and establishes the type of contracts that qualify for the biomethane credit.

Amongst other conditions, the contract must be a written contract. The Ministry interprets this to mean that the contract must at least be partially written. For example, the offer and acceptance are often oral, but the remaining elements of the contract is written in the terms approved by the British Columbia Utilities Commission.

CTR - REG.22.1/Notional Biomethane Content/Int.

Notional Biomethane Content

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds a definition for "notional biomethane content" to the regulations. The definition is added for the purposes of the biomethane credit program and establishes that notional biomethane is either:

  1. the amount of biomethane that is deemed by the biomethane contract to be supplied under the contract; or
  2. the percentage of qualifying fuel that is deemed by the biomethane contract to be biomethane.

This applies regardless of the actual amount of biomethane, if any, supplied.

CTR - REG.22.1/Qualifying Fuel/Int.

Qualifying Fuel

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg 112/2011 adds a definition for "qualifying fuel" to the regulations. The definition is added for the purposes of the biomethane credit program and establishes that qualifying fuel is natural gas or a blend of natural gas and biomethane if the proportions of the natural gas and biomethane in the blend cannot be determined.

CTR - REG.22.1/Qualifying Purchaser/Int.

Qualifying Purchaser

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg 112/2011 adds a definition for "qualifying purchaser" to the regulations. The definition is added for the purposes of the biomethane credit program and establishes that qualifying purchaser is a purchaser to whom a biomethane credit must be provide under Regulation 22.2(1).

CTR - REG.22.1/Qualifying Retail Dealer/Int.

Qualifying Retail Dealer

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds a definition for qualifying retail dealer to the regulations. The definition is added for the purposes of the biomethane credit program and establishes that a qualifying retail dealer is a retail dealer of natural gas who purchases or manufactures biomethane and blends the biomethane with natural gas for sale in British Columbia.

Regulation 22.2 - Provision Of Biomethane Credit

CTR - REG.22.2 /Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg.112/2011 adds Regulation 22.2.

This provision sets out the circumstances in which a retail dealer must provide the biomethane credit for the purposes of section 14.1 of the Act.

One such condition is that the purchaser is required under the Act to pay tax in respect of the sale at the time of purchase. The intent of this condition is to make certain purchasers ineligible for the biomethane credit. Specifically, self assessors under the Act such as registered consumers and those who are exempt from the tax such as First Nations persons.

Regulation 22.3 - Biomethane Credit Amount

CTR - REG.22.3/Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.2, Regulation 22.4, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds Regulation 22.3.

Regulation 22.3 sets out the amount of the biomethane credit a qualifying retail dealer must provide.

Regulation 22.4 - Refund Amount

CTR - REG.22.4/Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.2, Regulation 22.3, Regulation 22.5, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds Regulation 22.4.

Regulation 22.4 sets out how a retail dealer's refund for providing the biomethane credit is calculated. The refund is capped at no more than the amount of tax that would be due on the total amount of biomethane the retail dealer blended with natural gas.

Regulation 22.5 - Application For Refund

CTR - REG.22.5/Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.6, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds Regulation 22.5.

Regulation 22.5 requires that a qualifying retail dealer submit a separate refund application for each reporting period.

Regulation 22.6 - Records Respecting Provision Of Biomethane Credit

CTR - REG.22.6/Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.7

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg 112/2011 adds Regulation 22.6.

Regulation 22.6 sets out the records that a qualifying retail dealer must keep. Essentially, the retail dealer must keep all records related to the biomethane credit.

Regulation 22.7 - Invoice If A Biomethane Credit Provided

CTR - REG.22.7/Int.

Reference: Section 1 "biomethane credit," Section 1 "biomethane," Section 13.1, Section 14.1, Section 14.2, Section 14.3, Regulation 22.1, Regulation 22.2, Regulation 22.3, Regulation 22.4, Regulation 22.5, Regulation 22.6

Interpretation (Issued: 2012/03)

Effective February 16, 2011, B.C. Reg. 112/2011 adds Regulation 22.7.

Regulation 22.7 sets out what a retail dealer must include on their invoices. While most of the enumerated items are things that any retail dealer of natural gas would typically include on an invoice, the key requirement is that the retail dealer must set out on the invoice, as a separate item, the amount of the biomethane credit.

Regulation 23 – Refund Claims

CTR - REG. 23/Int.

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, repealed this regulation. The substance of the regulation is covered by section 41 of the Act.

Section 24 - Refund Or Deduction For Bad Debts

CTR - REG. 24/Int.

References: Section 38; Regulation 32; Motor Fuel Tax Regulation 3.1

Interpretation (Issued: 2011/11; Revised: 2016/01)

Effective June 9, 2015, by B.C. Reg. 315/2015, CTR section 24 is repealed and replaced by the current section. The new section contains formulae to be used with section 38 of the Act. Subsection 24(1) provides a formula for calculating the "specified amount" that may be deducted under subsection 38(3) or refunded under subsection 38(5) of the Act. Subsection 24(3) provides a formula for calculating the amount to be added to the remittance of a collector or a retail dealer, in accordance with subsection 38(6) of the Act, in the event that the seller recovers all or a portion of the bad debt. Subsection 24(4) provides a formula for calculating the amount to be repaid to government, in accordance with subsection 38(7) of the Act, if a seller (other than a collector or a retail dealer) recovers all or a portion of the bad debt.

The new section is consistent with similar provisions in other consumption tax regulations.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 24 to provide the formula and details for the proportional refund for bad debts authorized by Section 38 of the Act.

Regulation 25 – Refund – Feedstock

CTR - REG. 25/Int.

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 amended Regulation 25. The words "an amount has been paid as tax" were replaced with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 25 to require the director to provide a refund if an amount has been paid as tax on fuel that was not combusted, provided that the fuel was used as a raw material in an industrial process, either

(a) to produce or upgrade another fuel, or

(b) to manufacture another substance.

Regulation 26 – Refund - Non-Energy Uses Of Fuel

CTR - REG. 26/Int.

References: Section 1 “natural gas”; Section 84(3)(l); Regulation 17

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, amended Regulation 26. Subsection (1) was amended by replacing the words "an amount has been paid as tax" with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Subsections (2) and (3) were also amended to update the language.

Effective January 1, 2010, B.C. Reg. 294/2009 amended Regulation 26 by removing the word “marketable” from “marketable natural gas” as the distinction between raw and marketable natural gas was eliminated. As a result, all natural gas is treated the same regardless of where it is used or sold.

Effective September 2, 2009, B.C. Reg. 200/2009 added paragraph (1)(g) to Regulation 26 to also require the director to provide a refund of taxes paid on fuel that was not combusted when used for the following non-energy use:

(g) As anti-freeze in a natural gas pipeline.

Additionally, Subsections (2) and (3) were amended to include petroleum coke in the list of items for which a refund under these subsections may apply.

Effective February 1, 2009, B.C. Reg. 13/2009 repealed and replaced the calculations for refunds payable under Subsections (2) and (3) when coke, high heat value coal, low heat value coal or combination of these items was combusted as a reductant in the production of lead or zinc.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 26 to require the director to provide a refund of taxes paid on fuel that was not combusted when used for the following non-energy uses:

(a) As a raw material to manufacture anodes for use in an electrolytic process for smelting aluminum;

(b) As a reagent to separate out coal or ores of metal in an industrial floatation process;

(c) In pipeline pigging;

(d) In down-hole operations at a well site;

(e) To remove natural gas liquids or impurities in the processing of marketable* natural gas;

(f) As a refrigerant in a closed system in the processing of marketable* natural gas.

*See amendment above effective January 1, 2010.

Subsections (2) and (3) provide formulas for calculating the amount of a separate refund to paid when coke, high heat value coal, low heat value coal, petroleum coke (effective September 2, 2009) or a combination of these items was combusted as a reductant in the production of lead or zinc.

See CTA/REG. 17/Int. regarding exemptions for non-energy uses of fuel.

Regulation 27 – Refund – Interjurisdictional Passenger And Cargo Flights

CTR - REG. 27/Int.

References: Section 84; Regulation 1 “flight”, “interjurisdictional air service”; Regulation 4; Regulation 5; Regulation 18

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, amended Regulation 27 by replacing the words "an amount has been paid as tax" with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Retroactive July 1, 2008, BC Reg. 258/2009 amended Regulation 27 to remove the requirement that a flight had to be authorized by the Canadian Transportation Agency and Transport Canada. Paragraph (b) was also added to require a commercial air service to hold a license issued by the Canadian Transportation Agency and to hold, if required by Transport Canada, an operating certificate issued by Transport Canada for the type of aircraft use for the flight.

Effective July 1, 2008, BC Reg. 125/2008 prescribed the circumstances in which a refund will be provided under Section 39 of the Act for an amount paid as tax on fuel used in interjurisdictional passenger and cargo flights.

Regulation 27 provides that the director must provide a refund if an amount has been paid as tax on fuel that was used in a flight that:

(a) Was offered by a commercial air service

(b) Was provided to members of the public for a fee,

(c) Transported passengers, goods or both,

(d) Began or ended outside British Columbia, and

Additionally, the commercial air service referred to in paragraph 27(a)(i) holds a licence issued by the Canadian Transportation Agency and holds, if required by Transport Canada, an operating certificate issued by Transport Canada for the type of aircraft used for the flight.

Regulation 27.1 – Refund – Interjurisdictional Air Service Flights

CTR - REG. 27.1/Int.

References: Section 84; Regulation 1 “flight”, “interjurisdictional air service”; Regulation 4; Regulation 5; Regulation 18.1

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, amended Regulation 27.1 by replacing the words "an amount has been paid as tax" with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Retroactive July 1, 2008, BC Reg. 258/2009 adds Regulation 27.1, prescribing the circumstances in which a refund will be provided under Section 39 of the Act for an amount of tax paid on fuel used in interjurisdictional air service flights. Persons who used fuel to provide interjurisdictional air services, other than to transport passengers and goods or both, to members of the public for a fee (e.g. flight schools) may claim a refund of the tax paid.

The director must provide a refund if an amount has been paid as tax on fuel that was used in a flight that:

(i) Was operated by a commercial air service,

(ii) Was provided to members of the public for a fee,

(iii) Provided an air service other than the transportation of passengers, goods or both, and

(iv) Began or ended outside British Columbia, and that beginning or ending outside British Columbia was integral to the provision of the air service.

Additionally, the commercial air service referred to in paragraph 27.1(a)(i) must hold a licence issued by the Canadian Transportation Agency and, if required by Transport Canada, an operating certificate issued by Transport Canada for the type of aircraft used for the flight.

Regulation 28 – Refund – Interjurisdictional Marine Travel Or Transportation

CTR - REG. 28/Int.

References: Section 39; Section 84; Regulation 1 “interjurisdictional leg”, “intraprovincial leg”, "marine trip"

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, amended Regulation 28(1) and (2) by replacing the words "an amount has been paid as tax" with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Effective February 22, 2012, B.C. Reg. 24/2102 amended Regulation 28 to clarify that refunds of carbon tax are only provided for fuel used interjurisdictionally.

Retroactive July 1, 2008, BC Reg. 258/2008 repealed and replaced Regulation 28 to remove the reference to ” on a schedule or chartered basis” and clarified that marine travel and transportation must to be provided to the members of the public for a fee.

Effective July 1, 2008, BC Reg. 125/2008 prescribes the circumstances in which a refund will be provided under Section 39 of the Act for an amount paid as tax on fuel used in a ship for interjurisdictional marine travel or transport.

Regulation 28(1) sets out the conditions in which a refund may be paid for a marine trip that did not include an intraprovincial leg.

Regulation 28(2) sets out the conditions in which a refund may be paid for a marine trip that does include an intraprovincial leg.

Regulation 29 – Refund – Commercial Marine Services

CTR - REG. 29/Int.

References: Regulation 1 “interjurisdictional leg”, “intraprovincial leg”; "marine trip"; Regulation 6

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, amended Regulation 29 by replacing the words "an amount has been paid as tax" with "a person has paid tax." In addition, the words "must, on application, pay to the applicant" were replaced with the words "must pay the person."

Effective February 22, 2012, B.C. Reg. 24/2102 amended Regulation 29 to clarify that refunds of carbon tax are only provided for fuel used interjurisdictionally.

On March 31, 2011, the British Columbia Supreme Court ruled that an interjurisdictional leg may include connecting points within British Columbia under certain conditions (Island Tug & Barge Ltd. v. British Columbia 2011 BCSC 396).

Where a marine service consists of the towing of a barge on which goods are transported from outside of British Columbia to a port within the province or from a port within British Columbia to a port outside the province, a refund of carbon tax will be provided for fuel used on any portion of the trip, regardless of any stops in BC prior to unloading the goods, provided that goods to be unloaded within British Columbia are not loaded onto the barge at any of those stops.

Retroactive July 1, 2008, BC Reg. 258/2009 amended Regulation 29 to clarify that a trip must have included an interjurisdictional leg that was integral to the provision of the marine services. In addition, the trip must have been made in the course of providing marine services using a ship, other than the marine transport of passengers, goods or both, to members of the public for a fee.

Effective July 1, 2008, BC Reg. 125/2008 prescribes the conditions in which the director must pay a refund for an amount paid on an interjurisdictional leg.

Regulation 29.1 - Refund - Farmers

CTR - REG. 29.1/Int.

References: Section 39.1

Interpretation (Issued: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013, added Regulation 29.1. The regulation prescribes the conditions set out in section 39.1. Subsection (1) prescribes gasoline that is coloured in accordance with the Motor Fuel Tax Act and its regulations as a class of a type fuel. Diesel fuel that is coloured in accordance with the Motor Fuel Tax Act and its regulations is prescribed as a class of a subcategory of a type of fuel.

Subsection (2) prescribes a list of purposes for section 39.1(b). The refund mirrors the section 14 exemption with respect to eligible purposes. The eligible purposes are:

  1. operating a ship (for example, in the case of an aquaculture farm);
  2. operating a tractor when used off highway;
  3. operating an industrial machine when used off highway;
  4. operating a stationary engine or portable engine;
  5. operating a tractor when used on a highway by or on behalf of a farmer for the purposes of the farmer's farm;
  6. operating a farm truck being used by a farmer or other person in the operation of the farm;
  7. operating a motor vehicle that is not licensed to operate on a highway when used off highway;
  8. operating a tractor, an industrial machine or a motor vehicle referred to in #7, when proceeding to or returning from a location where the use of the fuel in the vehicle is otherwise authorized under 2, 3 or 7.

Regulation 29.2 - Refund - Farmers

CTR - REG. 29.2/Int.

References: Section 39.1

Interpretation (Issued: 2014/08)

Effective January 1, 2014, B.C. Reg. 11/2014, added Regulation 29.2.

Regulation 29.2 prescribes types of fuel for section 39.1 and a purpose for section 39.1(b) of the Act. Regulation 29.2 prescribes the purpose of operating a farm truck being used internationally by a farmer or other person in the operation of the farm.

Regulation 30 – Records Of Vendors, Wholesale Dealers And Retail Dealers

CTR - REG. 30/Int.

References: Section 1 “retail dealer”, “vendor', “wholesale dealer”; Section 84(3)(a); Motor Fuel Tax Regulation 5

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 30 to require vendors, wholesale dealers and retail dealers to keep records of inventories, as well as records of each fuel they imported, manufactured, purchased, and sold.

The records must be kept at the person's principal office or principal place of business in British Columbia.

Regulation 31 – Records Of Taxpayers

CTR - REG. 31/Int.

References: Section 84(3)(a); Motor Fuel Tax Regulation 5.01

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 31 to require a taxpayer who is required to file returns for the payment of tax under the Act to keep, at their principal office or principal place of business in British Columbia, records that substantiate certain information provided on the person's tax returns. The purpose of this section is to ensure that a taxpayer has records available for audit purposes.

Regulation 32 – Retention Of Records

CTR - REG. 32/Int.

References: Section 56; Section 57; Section 84(3)(a); Motor Fuel Tax Regulation 5.02

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 32 to require a person to retain records in British Columbia for the purposes of the Act or Regulations for a period of five years from the date the record is created.

If a person who is required to retain records makes a written application to the director for permission to destroy a record, the director may authorize the requested destruction prior to the expiry of the five year retention period.

If a record might be necessary for the purposes of an appeal under Section 56 or 57, the person required to keep the records must retain the record after the expiry of the five year retention period until the appeals have been exhausted.

This section is a standard administrative provision in taxation statutes.

Regulation 33 – Records Of Registered Air And Marine Services And Interjurisdictional Air Services

CTR - REG. 33/Int.

References: Section 1 “registered air service”, “registered marine service”; Section 84(3)(a); Regulation 1 “interjurisdictional air service”; Regulation 31; Regulation 32

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 33 to provide an exception to the requirement under Regulations 31 and 32 that records must be retained in British Columbia. This was enacted as many registered air and marine service and interjurisdictional air service are off shore companies. This provision allows them to continue to retain their records outside of British Columbia.

Regulation 34 – Invoices

CTR - REG. 34/Int.

References: Section 1.1; Section 1 “registered air service”, “ registered consumer”, “registered marine service”, “vendor”, “wholesale dealer”; Section 14(2); Motor Fuel Tax Regulation 5.03 and 5. 1

Interpretation (Issued: 2011/11, Revised: 2014/08)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 34 to outline when an invoice must be provided and what information it must include, for the following reasons: transparency, consistency, and to allow the Ministry to track and monitor types of fuel sold for audit purposes.

Effective January 1, 2014, B.C. Reg. 246/2013, added subsection (0.1). The new subsection adds a definition for "qualifying fuel." "Qualifying fuel" means fuel that is in a type of fuel or of a subcategory of a type of fuel prescribed under section 20.1(3). The new definition applies to Regulation 34 and 35.

Under subsection (1), a person who sells fuel to another person from a bulk storage facility, cardlock or terminal rack must provide an invoice to the person buying the fuel at the time of sale or within a reasonable time after the time of sale.

Effective May 1, 2012, B.C. Reg. 142/2012 added a new subsection (1.1). The provision requires that if a person sells fuel to which section 1.1(2)(a) to (c) applies, then they must provide the buyer an invoice at the time of sale.

Under subsection (2), a vendor or wholesale dealer, other than a person referred to in subsection (1), who sells fuel to a person for resale must provide an invoice to the person buying the fuel at the time of sale.

Under subsection (3), a person, other than a person referred to in subsection (1), who sells fuel to a registered consumer, registered air service or registered marine service must provide an invoice to the registered consumer, registered air service or registered marine service buying the fuel at the time of sale.

Effective January 1, 2014, B.C. Reg. 246/2013, added subsection (3.1). Under the subsection a retail dealer who sells qualifying fuel to a farmer must provide an invoice to the farmer and on the invoice, specify whether tax was included in the sale (in addition to information required under (5)).

Under subsection (4), a person who sells fuel must, if requested to do so by the person to whom the fuel is sold, provide that person with an invoice.

Under subsection (4.1), subsection 4 does not apply to a person selling fuel who is otherwise required under the Regulations to provide an invoice to the person making the request.

Under subsection (5), an invoice provided under Regulation 34 must specify:

(a) The date of the sale,

(b) The name and address of the person selling the fuel,

(c) The name and address of the person to whom the fuel is sold,

(d) The quantity of each type or subcategory of a type of fuel sold, and

(e) The rate of tax for each type or subcategory of a type of fuel sold.

Regulation 35 – Information In Sales Documents

CTR - REG. 35/Int.

References: Section 1 “registered air service certificate”, “registered consumer certificate”, “registered marine service certificate”, “registration certificate”, “retail dealer; Section 84(3)(a)

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 35 to set out the requirements of a retail dealer at the time of making a sale where they are not required to collect tax from a purchaser, because the purchaser is not liable to pay tax on the purchase.

Effective January 1, 2014, B.C. Reg. 246/2013 amended subsection (1). The the application of subsection (1) does not apply to retail dealers referred to in subsection (1.1).

Paragraph 35(1)(a) sets out the information that must be provided (if applicable) on the invoice, purchase order, receipt or similar document to indicate why the purchaser was exempt from paying tax:

(i) The number of the purchaser's registered consumer certificate;

(ii) The number of the purchaser's registered air service certificate;

(iii) The number of the purchaser's registered marine service certificate;

(iv) The number of the purchaser's Certificate of Indian Status issued by the Department of Indian and Northern Affairs.

Alternatively, the retail dealer must obtain a completed Certificate of Exemption from the person purchasing the fuel (paragraph 35(1)(b)).

Effective January 1, 2014, B.C. Reg. 246/2013 added subsection (1.1). The subsection sets out the information a retail dealer must collect when they sell qualifying fuel to a farmer claiming an exemption. The retail dealer must collect the farmer's BC Farmer Identity Card or a completed FIN 458.

Effective January 1, 2014, B.C. Reg. 246/2013 amended subsection (2). The words "a completed Certificate of Exemption in a form established by the director" were replaced with "a declaration in a form acceptable to the director."

Subsection 35(2) applies to holders of registration certificates and sets out the requirements for a seller to document a sale of natural gas or propane where they are not required to collect tax, because the buyer is not a purchaser. The seller must, at the time of sale:

(a) Include the number of the buyer's registration certificate on the invoice, purchase order, receipt or similar document for the sale of fuel, or

(b) Obtain from the person buying the fuel a declaration.

Effective January 1, 2014, B.C. Reg. 246/2013 added subsection (3). The subsection requires that the retail dealer retain the documentation required under the section to substantiate the non-collection of tax.

Regulation 36 – Calculation Of Interest

CTR - REG. 36/Int.

References: Section 84(3)(q); Motor Fuel Tax Regulation 5.2

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 36 which provides that interest payable under the Act must be compounded monthly, and calculated on the number of days since the last compounding of interest. If no compounding has yet occurred, interest must be calculated from the date that interest is payable under the Act.

This section is a standard administrative provision in taxation statutes.

Regulation 37 – Calculation Of Interest If Assessment Exceeds Refund

CTR - REG. 37/Int.

References: Section 84(3)(q); Motor Fuel Tax Regulation 5.3

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulations 37 and 38 to allow for the netting of interest on refunds against interest on audit assessments. Regulation 37 applies if an assessment exceeds the refund.

For example, a business has a refund claim of $110 and the interest rate on the $110 owed to the business by the government is 3.5 percent. The business has an audit assessment of $120 for the same time period and the interest rate on the $120 owed to the government by the business is 8.5 percent. Instead of allowing the different interest rates to apply, the interest amounts are netted (set-off) and interest is charged to the business on the remaining amount ($10) at the appropriate rate (8.5 percent).

This section is a standard administrative provision in taxation statutes.

Regulation 38 – Calculation Of Interest If Refund Exceeds Assessment

CTR - REG. 38/Int.

References: Section 84(3)(q); Motor Fuel Tax Regulation 5.4

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulations 37 and 38 to allow for the netting of interest on refunds against interest on audit assessments. Regulation 38 applies if a refund exceeds the assessment.

For example, a business has a refund claim of $110 and the interest rate on the $110 owed to the business by the government is 3.5 percent. The business has an audit assessment of $100 for the same time period and the interest rate on the $100 owed to the government by the business is 8.5 percent. Instead of allowing the different interest rates to apply, the interest amounts are netted (set-off) and interest is charged to the business on the remaining amount ($10) at the appropriate rate (3.5 percent).

This section is a standard administrative provision in taxation statutes.

Regulation 39 – Deposit For IFTA Commercial Vehicle

CTR - REG. 39/Int.

References: Section 84; Regulation 2 “IFTA commercial vehicle”; Motor Fuel Tax Regulation 40

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 39 to provide that if a person is required to pay a deposit under Regulation 40 of the Motor Fuel Act Regulation (Security from retail dealer) in respect of an IFTA commercial vehicle, they must at the same time pay a deposit on account of tax payable under the Carbon Tax Act.

Subsections (2) to (5) of Regulation 39 set out the formulas for calculating the deposit.

Regulation 40 – Refund Of IFTA Commercial Vehicle Deposit

CTR - REG. 40/Int.

References: Section 84; Regulation 2 “IFTA commercial vehicle”; Regulation 40; Motor Fuel Tax Regulation 40.1

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 40 to provide the following formula for calculating a refund of a deposit paid under Regulation 39:

Refund = (D + TP) - (R x AD)

Where

D = is the amount of the deposit paid

TP = is the amount of tax paid by the person for light fuel oil that was purchased in British Columbia during the trip for use in the vehicle

R = the rate set out in the Table to Regulation 39 to calculate the deposit paid.

AD = is the actual distance traveled by the vehicle in British Columbia.

The refund cannot exceed the amount paid for the deposit.

Regulation 40.1 – Additional Refund For IFTA Commercial Vehicle

CTR - REG. 40.1/Int.

References: Section 11; Section 84(3)(s); Regulation 39; Regulation 40; Motor Fuel Tax Regulation 40.2

Interpretation (Issued: 2011/11, Revised: 2014/02)

Effective January 1, 2014, B.C. Reg. 246/2013 repealed and replaced Regulation 40.1. The regulation requires that the director provide a refund if satisfied that a person paid a deposit under Regulation 39 for a trip and the amount of the deposit less any refund paid under Regulation 40 for trip exceeds the tax payable under section 11 of the Act. The director must pay a refund equal to the amount of the excess.

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 40.1 to require the director to provide a refund of a deposit paid under Regulation 39 if that amount exceeded the tax payable under Section 11, after first deducting any refund paid under Regulation 40.

Regulation 41 – Remittance Of Tax By IFTA Commercial Vehicle

CTR - REG. 41/Int.

References: Section 11; Section 84(3)(s); Regulation 39; Regulation 40; Motor Fuel Tax Regulation 40.3

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 and B.C. Reg. 168/2008 added Regulation 41 to provide the formula for paying tax under Section 11.

The tax payable is calculated as follows:

TP: Q x R - D

Where

TP = tax payable

Q = the quantity of light fuel oil used in British Columbia in the IFTA commercial vehicle during the trip

R = the tax rate for light fuel oil set out in the column of the Table in Schedule 1 of the Act, that applies for the period of time in which the fuel is used in British Columbia

D = the sum of the deposit paid under Regulation 39 plus the amount of tax paid by the person for light fuel oil that was purchased in British Columbia during the trip for use in the vehicle minus a refund, if any, paid under Regulation 40 for the trip.

Regulation 41.1 – Definitions

CTR - REG. 41.1/Int.

References: Section 84(3)(g), (i) and (t); Motor Fuel Tax Regulation 51.6

Interpretation (Issued: 2011/11)

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.1 to provide the following definitions for Part 8.1 of the Regulations regarding the Exempt Fuel Retailers Program.

An “exempt fuel retailer” is defined as a person who holds an exempt fuel retailer permit. An exempt fuel retailer is permitted to purchase certain types and subcategories of types of fuel at specified percentages exempt of tax, and sells fuel exempt of tax to Status Indians or Indian Bands.

An “exempt fuel retailer permit” is defined as a permit issued under Part 8.1 of the Regulations. These permits are issued under Regulation 41.2.

An “exempt percentage” is defined as the percentage set by the director under Regulation 41.3. This is the percentage that an exempt fuel retailer is eligible to purchase exempt of tax, based on the percentage of tax-exempt sales they normally make to qualifying purchasers.

A “qualifying purchaser” is defined as a purchaser who is exempt from tax either

(a) Under section 87 of the Indian Act (Canada), or

(b) By virtue of an agreement between the government and a First Nation relating to former reserve land.

A “reserve” is defined as having the same meaning as in the Indian Act (Canada), and includes land classified as designated reserve land.

A “specified fuel” is defined as a type or subcategory of a type of fuel specified in an exempt fuel retailer permit.

Regulation 41.2 – Exempt Fuel Retailer Permit

CTR - REG. 41.2/Int.

References: Section 84(3)(i) and 84(3)(t); Regulation 41.1; Motor Fuel Tax Regulation 51.7

Interpretation (Issued: 2011/11)

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.2 to set out the requirements for obtaining an Exempt Fuel Retailer Permit.

Under Regulation 41.2(1), when the director receives the application form and the director and applicant enter into an agreement, as per Regulation 41.2(3), the director may issue an Exempt Fuel Retailer Permit for sales of fuel on reserve land or former reserve land. The permit is issued for a type or subcategory of a type of fuel.

Under Regulation 41.2(2), a retail dealer must apply for an Exempt Fuel Retailer Permit for a specific location where they intend to sell the fuel.

Under Regulation 41.2(3), the applicant and director must enter into an agreement that sets out duties to be performed by the retail dealer.

Under Regulation 41.2(4), an exempt fuel retailer must display the Exempt Fuel Retailer Permit prominently where they sell fuel.

Regulation 41.3 – Exempt Percentage Of Fuel Purchases

CTR - REG. 41.3/Int.

References: Section 32; Section 84(3)(i) and 84(3)(t); Regulation 41.1; Motor Fuel Tax Regulation 51.7

Interpretation (Issued: 2011/11)

Effective September 2, 2009, B.C. Reg. 200/2009 replaced the phrase “without providing notice” under Regulation 41.3(4) with “without advance notice”.

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.3 to provide the director with the authority to set and change the exempt percentage for the purposes of the Exempt Fuel Retailer Permit Program.

Under Regulation 41.3(1), the director may set a percentage of a type or subcategory of a type of fuel that maybe purchased for resale by an exempt fuel retailer without paying security.

Under Regulation 41.3(2), different percentages may be set for different fuels, subcategories of fuels, or retailers.

Under Regulation 41.3(3) and 41.3(4), the director may change the percentage of specified fuel:

(a) with 30 days notice;

(b) without notice if the retailer fails comply with the Act, Regulations or terms or conditions of the permit or agreement; or

(c) without notice, at the request of the exempt fuel retailer, if satisfied the change is appropriate. For example, if the exempt fuel retailer indicates that the amount of sales to qualifying purchasers has increased, the fuel percentage could be increased.

Regulation 41.4 – Collection And Payment Of Security

CTR - REG. 41.4/Int.

References: Section 30; Section 32; Section 84(3)(i) and 84(3)(t); Regulation 41.1; Motor Fuel Tax Regulation 51.8

Interpretation (Issued: 2011/11)

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.4 to provide exceptions from the requirement to pay security for certain purchases made by exempt fuel retailers.

Under Regulation 41.4(1), a collector or deputy collector must not collect security on an exempt percentage of sales to exempt fuel retailers.

Under Regulation 41.4(2), a collector who sells specified fuel to an exempt retail dealer is exempt from paying security in respect of the exempt percentage of that fuel.

Under Regulation 41.4(3), the director must refund a deputy collector for security paid on fuel sold to an exempt fuel retailer. The amount of the refund is the difference between the amount of security the deputy collector paid and the amount of security or tax the deputy collector received. For example, a deputy collector paid $1500 in security to the director, and only collected $1300 in tax from sales. The refund would be $200.

Section 41.5 – Returns

Ctr - Sec. 41.5/Int.

References:

Act: Section 84(3)(i) and 84(3)(t)

CTR: Section 41.1; Section 41.6

Interpretation (Issued: 2011/11; Revised: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 amended CTR subsections 41.5(3) and (4) for greater clarity, specifically mentioning fuel purchased and sold in the reporting period. The amendment added subsection 41.5(4.1) to provide the director with the discretion to allow an exempt fuel retailer to submit supporting documentation on or before the last day of the month following the end of a reporting period instead of on or before the15th of the month.

Effective September 2, 2009, B.C. Reg. 200/2009 amended the due date of returns that are remitted on an annual basis under CTR subsection 41.5(4) from August 15 to July 15. Therefore, returns that are remitted on an annual basis are now due on July 15.

Effective January 1, 2009, B.C. Reg. 312/2008 added CTR subsection 41.5 to provide that an exempt fuel retailer that has a monthly filing frequency is required to complete and send in a Tax Return – Exempt Fuel Retailer form (FIN 412) no later than the 15th day of the month in which they sold fuel to eligible Indians and Indian Bands. They are also required to document exempt sales using a Schedule of Sales of Tax Exempt Fuels to First Nations form (FIN 412/2). For example, if they sold fuel on July 1, 2009, they are required to submit the return by August 15, 2009.

Regulation 41.6 – Suspension And Cancellation Of Exempt Fuel Retailer Permit

CTR - REG. 41.6/Int.

References: Section 84(3)(i) and 84(3)(t); Regulation 41.1; Motor Fuel Tax Regulation 51.9

Interpretation (Issued: 2011/11)

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.6 to set out circumstances and requirements under which the director may suspend and/or cancel an exempt fuel retailer permit.

Suspension

Regulation 41.6(1) sets out the circumstances in which the director may suspend an exempt fuel retailer permit.

Regulation 41.6(2) sets out the requirements for the director to provide notice.

Cancellation

Regulation 41.6(3) sets out the circumstances in which the director may cancel an exempt fuel retailer permit.

Regulation 41.6(4) states the director must cancel a permit if the land to which the permit is attached ceases to be reserve land.

Regulation 41.6(5) states that before cancelling a permit, the director must give notice and provide the opportunity to show why the permit should not be cancelled.

Regulation 41.6(6) states that cancellation takes effect on the later of the date that the notice is delivered or the date stated in the notice. For example, if the notice is delivered on July 2 and the date stated in the notice is July 1, then the cancellation takes effect on July 2.

Under Regulation 41.6(7), even if the permit is suspended or cancelled, the retail dealer must still pay the taxes owing.

Regulation 41.7 – Automatic Suspension And Cancellation

CTR - REG. 41.7/Int.

References: Section 84(3)(i) and 84(3)(t); Regulation 41.1; Motor Fuel Tax Regulation 51.91

Interpretation (Issued: 2011/11)

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.7 to state that if an exempt fuel retailer permit is suspended or cancelled under the Motor Fuel Tax Act, then it is automatically suspended or cancelled without notice under the Carbon Tax Regulation.

Regulation 41.8 – Appeals

CTR - REG. 41.8/Int.

References: Section 57; Section 58; Section 84(3)(i) and 84(3)(t); Regulation 41.1; Regulation 41.3; Motor Fuel Tax Regulation 51.92

Interpretation (Issued: 2011/11)

Effective September 2, 2009, B.C. Reg. 259/2009 added paragraph (1)(c) and subsections (1.1) and (1.2) to Regulation 41.8 to:

  • Provide authority to appeal the setting or changing of the percentage of specified fuel under Regulation 41.3, or a refusal to change that percentage, and
  • To clarify that appeals made under Regulation 41.8 must also be served on the minister within 90 days of the date of the director's notice of decision.

Effective January 1, 2009, B.C. Reg. 312/2008 added Regulation 41.8 to set out provisions for appealing a refusal to issue an exempt fuel retailer permit or the cancellation of a permit.

Note: a decision to cancel a permit because the permit was obtained for land that has ceased to be reserve land cannot be appealed.

Sections 57 (Appeal to court) and 58 (Pending appeal not to affect tax collection) also apply to Regulation 41.8. Therefore, an appeal of a decision concerning an exempt fuel retailer permit can be appealed to the Supreme Court, and an appeal of a decision does not affect the date of payment of tax, interest or penalties or any liability under the Act.

Regulation 42 – Inventory Allowance

CTR - REG. 42/Int.

References: Section 35; Section 84(3)(f)

Interpretation (Issued: 2011/11)

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 42 to allow the director to provide an inventory allowance and sets out the amounts of the allowance in certain circumstances.

Businesses are entitled to an allowance of $250 each time they are required to calculate and report their inventory under Section 35, provided the business has the capacity to store at least 1,000 litres of fuel.

Regulation 44 – Tax On Blends Or Mixtures

CTR - REG. 44/Int.

References: Section 13; Section 84

Interpretation (Issued: 2011/11)

Effective January 1, 2010, BC Reg. 294/2009 added the following fuels under Regulation 44(1): gas liquids, pentanes plus, gasoline and light fuel oil to the list of prescribed fuels. In addition the word “raw” was removed from “raw natural gas”. As a result, all natural gas is treated the same regardless of where it is used or sold.

Effective July 1, 2008, B.C. Reg. 125/2008 added Regulation 44(1) which states that subsection 13(1) of the Act does not apply to the following fuels: aviation fuel, jet fuel, raw natural gas, refinery gas, or marketable natural gas.

Subsection 13(1) of the Act states that if a taxable fuel or combustible is mixed with another substance, then the amount of tax payable is determined by multiplying the applicable tax rate by the volume of the blend of mixture that is a taxable fuel or combustible.

Subsection 44(2) provides that if a blend or mixture includes a fuel prescribed in Regulation 44(1), for the purposes Section 13(1), the prescribed fuel is treated as if it were not a mixture or blend. This means these prescribed fuels, which are ordinarily made with a blend of fuel (e.g. jet fuel) are not taxed based on their components. Such fuels are taxed at the rate set out in Schedule 1.

The legislation recognizes that some Schedule 1 fuels are themselves blends, and Regulation 44 provides an exception to the blends rule when these prescribed fuels are blended with other Schedule 1 fuels.

Regulation 45 – Form Prescribed

CTR - REG. 45/Int.

References: Section 64; Section 84; Motor Fuel Tax Regulation 5.5

Interpretation (Issued: 2011/11)

Effective July 1, 2008, subsection 64(2) allows the director to register a certificate of lien in the prescribed form. B.C. Reg. 125/2008 added Regulation 45 to prescribe that the form set out in the Schedule to the Regulations is to be used as a Certificate of Lien.

Regulation 45.1 - Fuel Imported By Ship

CTR - REG. 45.1/Int.

References: Section 1.1

Interpretation (Issued: 2014/08)

Effective May 1, 2012, B.C. Reg. 142/2012 added Regulation 45.1. The new regulation prescribes the amount of fuel for the purposes of section 1.1 as follows:

Class of Fuel / Prescribed Amount
Item Column 1
Class of Fuel
Column 2
Prescribed Amount
1 fuels that are liquids at standard reference conditions 5 million litres
2 fuels that are gases at standard reference conditions 30 million litres
3 fuels that are solids 25,000 tonnes

Section 46 - Offences

CTR - REG. 46/Int.

References:

Act: Section 84

CTR: Section 8; Section 9; Section 10; Section 11; Section 12; Section 13; Section 13.1; Section 13.2; Section 13.3; Section 13.4; Section 14; Section 20.2; Section 22.6; Section 22.7; Section 30; Section 31; Section 32; Section 34; Section 35; Section 41.5

Interpretation (Issued: 2011/11; Revised: 2017/09)

Effective August 1, 2016, B.C. Reg. 180/2016 amended section 46 by removing sections 8, 9, 10, 11, 12, 13 from paragraph 46(a) and adding sections 8, 9, 10, 10.1, 10.2, 10.3, 11, 12, 12.1, 13, 13.1, 13.2, 13.3, 13.4 as a result of renumbering and reorganizing the tax remittance provisions in the regulations.

Effective May 25, 2015, B.C. Reg. 315/2015 amended subsection 46(b) by replacing references to months with references to days (e.g. 90 days replaces 3 months). This amendment was made along with similar amendments in the Motor Fuel Tax Regulation and Tobacco Tax Act Regulation to clarify the minimum and maximum length of imprisonment upon conviction for an offence.

Effective January 1, 2014, B.C. Reg. 241/2013 amended section 46 to add a reference to section 20.2 [Persons selling fuel to farmers].

Effective February 16, 2011, B.C. Reg. 112/2011 amended section 46 to add references to sections 22.6 [Records respecting provision of biomethane credit] and 22.7 [Invoice if a biomethane credit provided].

Effective July 1, 2008, B.C. Reg. 125/2008 added section 46 which provides the fine amounts