Refunds – Sales Written Off as Bad Debts

If your business has extended credit to a customer and the account, or portion of the account, is uncollectable and later written off as a "bad debt", you may be entitled to a refund of the tax that was paid.

A refund should be claimed only if a tax credit cannot be obtained from the fuel supplier. The refund claim must clearly indicate the reason for the claim and the amount being claimed. The claim must be accompanied by supporting documentation.

When claiming reimbursement for tax remitted on accounts being written off as bad debts, please provide a summary of the following information to be submitted with your tax return or application for refund:

	names and addresses of purchasers whose accounts have been written off
	the full amount of each sale and the tax involved
	the payment received, if any, on each sale
	the date each sale took place

For your convenience, here is an example of a summary template.

Also, you must attach and sign a statement certifying that:

	either no payment or only partial payment was received on the account
	the amount of tax claimed for reimbursement has actually been written off as a bad debt and, in your opinion, is not collectable
	in the event of a bad-debt account being paid in whole or in part in the future, you will remit the tax due on the amount that you subsequently received on the account.

As of May 1, 2007, refunds must be claimed within four years of the bad debt being written off your books.

You can apply for a refund by writing to:

Consumer Taxation Branch
Refunds Section
PO BOX 9628 STN PROV GOVT
VICTORIA BC  V8W 9N6

If any or all of the amount written off as a "bad debt" is later paid, you are responsible for repaying the tax on the amount you received.

For more information, please see Bulletin GEN 001, Refund of Tax Remitted on Sales Written Off as "Bad Debts".