Two excise statutes, and you file under one of them
Beer answers to the Excise Act: a brewer's licence from the CRA before the first commercial batch, duty payable the moment beer is packaged, and a monthly duty return (Form K50B) prepared from the packaging log. The federal structure favours you while you are small — reduced duty rates apply to the first 75,000 hectolitres brewed in Canada each year, climbing through volume bands — and every rate resets each April 1 with the annual adjustment, which deserves a diary note because last year's rate keeps getting typed into spreadsheets until May.
Spirits answer to the Excise Act, 2001, and it is a stricter law. A spirits licence covers production, duty is measured per litre of absolute ethyl alcohol, and there is no volume-banded relief on the way up. The mercy is timing: duty is not payable while whisky sits in barrel as bulk spirits, and packaged bottles can wait inside a licensed excise warehouse, duty deferred, until they ship out to the duty-paid market. One modern footnote helps both sides of the house: beer at 0.5% alcohol or less carries no federal excise duty, which changes the math on a non-alcoholic line.
Ontario's layer, and where the LCBO fits
Beer poured in your taproom or sold from your on-site store carries Ontario beer taxes — a basic tax, a volume tax and an environmental tax on non-refillable containers — which you calculate and remit yourself, at reduced basic rates if you qualify as a microbrewer under the province's production threshold. A distillery's on-site store remits the parallel Ontario spirits taxes on every bottle that crosses the counter.
Sales into the LCBO work differently: the province takes its share through the LCBO's markup, priced into what the LCBO pays you rather than through a return you file. And beer tax on a guest keg was settled by the brewery that made it, not by the taproom pouring it. The same case of cans creates different remittance work depending on the door it left by, which is why channel and origin coding in the books is a tax control, not a bookkeeping preference.
HST stacks on top of the duty
HST applies at 13% to the duty-included price of every pint, flight, growler and bottle, and to the taproom's food and merchandise beside them. The credit side is where breweries surprise the CRA's pattern-matching: a build-out year full of tanks, glycol and canning equipment produces input tax credits far larger than the tax collected, and legitimate refund returns draw desk reviews. The file that closes a review quickly is the one where every large credit ties to an equipment invoice in the corporation's name; if one escalates anyway, CRA Audit & Review Support takes over the correspondence. During a heavy build we often elect monthly HST filing so refunds arrive while the equipment invoices are still being paid.
Five filings, one physical fact
Every return in the stack restates the same underlying quantity — litres brewed, packaged and sold — so we prepare them from a single reconciled volume base rather than as five separate projects.
| Filing | Levied by | Built from |
|---|---|---|
| Excise duty return | CRA, monthly | Litres packaged, net of documented destructions |
| Beer or spirits taxes | Ontario Ministry of Finance | Taproom and on-site store sales, at microbrewer rates where you qualify |
| HST return | CRA | 13% collected across every channel, less credits on cans, grain and tanks |
| T2 corporate return | CRA, annually | Statements whose cost of sales moved through raw, in-tank and packaged stages |
| T4s and source deductions | CRA | Brewers, packaging staff and tipped taproom servers |
A reviewer's opening question at any level is the cross-check: does the packaged volume behind the duty return support the sales in the HST return, and do both support the revenue on the T2? Prepared from one base, the stack answers yes before the question is asked.
A T2 that knows it is a manufacturer
Brewing and distilling are manufacturing, and the T2 should read that way: equipment in the manufacturing and processing classes, inventory carried at raw, in-tank and finished stages, and Ontario's combined small-business rate of roughly 12.2% on the first $500,000 of active profit. Our Corporate Tax Filing engagement prepares it alongside the excise and HST work, and the owners' personal returns are filed with it so salary and dividends land as one plan rather than two surprises. Fees are quoted in writing after a free 15-minute discovery call — most of our brewery clients sit within delivery distance of our Mississauga office, but the filing stack travels anywhere in Ontario.
Source: CRA — Excise Duty Rates.
