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What are Fuel Tax Credits?

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Fuel Tax Credits provide businesses with a credit for the fuel tax (excise or customs duty) that's included in the price of fuel used in machinery, plant & equipment, heavy vehicles, and light vehicles travelling off public roads or on private roads.

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Operating equipment comes with substantial costs, and one of the largest expenses is fuel. If you have fuel costs for equipment, fuel tax credits rebated by the Australian Tax Office could help you recoup a sizable portion of your expenses.

What Are Fuel Tax Credits?

Fuel tax credits provide businesses that operate fuel-powered equipment in Australia a rebate on some of the excise and/or customs duty taxes that they pay for fuel. The credit is claimed through the Australian Tax Office (ATO), by submitting your BAS (Business Activity Statements).

What Businesses Can Claim the Australian Fuel Tax Rebate?

Australia’s fuel tax rebate may be available to any business that use fuel in business operations. What type of asset and where it’s used determines eligibility:

  • Operating machinery (e.g. generators, excavators, tractors, backhoes, etc.)
  • Heavy vehicles travelling on public roads or private property, idling off public roads, and/or operating auxiliary equipment (e.g. air conditioning, refrigeration, tipping/pumping equipment, etc.)
  • Light vehicles travelling on private property and/or idling off public roads

Fuel used in light vehicles driven on public roads, in heavy vehicles that don’t meet emissions standards, and in aviation equipment are all excluded from the FTC rebate.

Businesses that claim the FTC rebate should also be aware that a rebate can’t be claimed for fuel that has previously been claimed, has been stolen or is used for private purposes (regardless of equipment type).

What is the Fuel Tax Credit Rate?

The fuel tax credit rates are broken down according to the type of fuel used, where equipment is driven, and when the fuel was acquired. The ATO also recalculates the rates every six months (so they may be slightly different than those listed here). At the time of writing (December 2022), the rates are:

Eligible Fuel Type Unit of Measure Heavy Vehicles on Public Roads Off-Road Rate
Petrol, diesel, some other liquified fuels cents per litre 18.8 46
Blended fuels B5, B20, E10 cents per litre 18.8 46
Blended fuel E85 cents per litre 0.0 19.735
Liquified petroleum gas (LPG) cents per litre 0.0 15
Liquified natural gas (LNG), compressed natural gas (CNG) cents per kilogram 0.0 31.5
B100 fuel cents per litre 0.0 10.7

"Off-Road Rate" includes heavy and light vehicles off public roads, operational machinery, and auxiliary equipment.

How Can Businesses Calculate the Fuel Tax Credit?

The different rates make manual calculation of the fuel tax credit tedious, and the math only becomes more detailed when trying to account for the proportion of fuel used by vehicles on and off public roads.

Typically, most businesses use the same standard percent calculation each period for each vehicle to approximate on and off-road fuel usage, which may not be the most accurate method. This can lead to missed FTC entitlement that would otherwise be claimable.

How can you accurately track on-and-off-road usage of your vehicles and equipment? By installing telematics to track vehicle movements second-by-second, FTC Manager maps on-and-off-road usage automatically and provides you with precise reporting and all the information you need to submit an accurate FTC claim.

Some businesses submit their FTC claims using the lowest rate, merely because this is the simplest calculation. If your business is currently calculating the rebate with the lowest rate because it’s the easiest and safest method, you could be missing substantial reimbursement. Investing in software that integrates with a FTC calculator may more than pay for itself.

What Qualifies as Off-Road Operation for FTC?

A public road is defined by the ATO as “any road that is available for use, or generally accessible as of right, by members of the public”. It follows then that off-road locations for the purpose of calculating FTC are all other areas that the general public doesn’t have the right to access. Some examples of areas that are considered off-road include:

  • Mining sites and quarries
  • Agricultural properties and processing facilities
  • Loading docks and ports
  • Construction sites
  • Roads and infrastructure under construction
  • Forestry and logging sites
  • Council refuse sites
  • Private depots, warehouses, and other private property

How Can Businesses File Retrospective Off-Road FTC Rebate Claims?

Businesses that have not been claiming their full allowed FTC rebate may be able to file a retrospective fuel tax credit claim. Claims can be made for up to the past four years.

Retrospective FTC claims are typically filed by businesses that didn't receive the full rebate that they were entitled to, whether it was for on-or-off-road use. Businesses that have never received an FTC rebate might file a retrospective claim if they previously met qualification criteria, but this is less common.

To file an accurate retrospective off-road FTC claim, businesses must know the type of fuel used, quantity, and portion of on-and-off-road activity. This should be known for each type of equipment the off-road FTC is being claimed for.

Many businesses cannot compile accurate fuel records from the past four years. If complete records are not available, businesses may be able to establish a pattern using telematics software to form the basis of a retrospective FTC claim.

How Can Businesses Get Help Tracking Fuel Usage for the Fuel Tax Credit?

Whether your business needs to track fuel usage for this year’s fuel tax credit claim or a retrospective claim, our FTC Management software can help you monitor both equipment usage and fuel usage. We will make sure you know exactly what fuel was consumed for on-road and off-road activity, so you have the data necessary to claim the full fuel tax credit your business should receive. That's the FTC Manager difference.

Frequently Asked Questions

Answers to the most common questions about Fuel Tax Credits

This is the full or partial refund, claimed through the FTC process, given back to a business for the excise paid on taxable fuel.

Types of public ruling that explains the relevant provisions of tax law that applies to a specific class of participants for a particular scheme. FTC Manager is the first and most comprehensive solution with an ATO (Australian Taxation Office) Product Ruling for maximising heavy vehicle FTC claims on an ongoing basis (see Class Ruling 2017/42).

Percentages which the Commissioner of Taxation accepts as a fair and reasonable apportionment of fuel used in the auxiliary equipment of heavy road transport vehicles. Refer to Practical Compliance Guideline 2016/11 (PCG 2016/11).

The rate of FTC entitlement for the use of fuel other than for travel on public roads (including for use in auxiliary equipment of heavy road transport vehicles). The Off-road FTC Rate is equal to the amount of excise paid on the fuel and is currently 46.0 cents per litre as of December 2022.

The rate of FTC entitlement for the use of fuel in heavy vehicles for travelling on public roads. This rate is calculated by subtracting the RUC from the full rate of excise payable on the fuel. The current rate of entitlement is 18.8 cents per litre as of December 2022.

Equipment or mechanisms on heavy vehicles that are unrelated to the vehicles’ travel or propulsion. Auxiliary equipment can be powered by its own motor using fuel from the vehicle’s main fuel tank, from a separate fuel tank, or via a Power Take-off Unit which draws power from the vehicle’s main engine. Examples include concrete agitators, refrigerated trucks/trailers, garbage trucks, tip trucks etc.

On road travel (or “road transport” activities) is classified as any vehicle travel on a public road. Ordinarily this includes all national highways, state and territory highways and main roads and local streets which are constructed, managed and maintained by state and territory governments.

When vehicles travel on roads and areas which are not classified as public roads, these can include mine site access roads, forestry roads, privately constructed and maintained roads, farm sites, mine sites and other privately-owned land. Please note: travel on unsealed roads is NOT automatically off-road travel.

Any road that is available for use, or generally accessible as of right, by members of the public.

Public roads for FTC purposes are those that are:

  • opened, declared or dedicated as a public road under a statute;
  • vested in a Government authority having statutory responsibility for the control and management of public road infrastructure; or
  • dedicated as a public road at common law [FTR 2008/1, para 44]

A form submitted by Australian businesses to the Australian Taxation Office (ATO) that reports on taxation obligations including fuel tax.

The Road User Charge (RUC) is an amount determined by the National Transport Commission to recover heavy vehicles’ share of costs of providing and maintaining the public road network. It is subtracted from the full rate of excise to determine the “road transport” rate of FTC entitlement which applies to the portion of fuel used in heavy vehicles for travel on public roads. As of December 2022, the RUC was set at 27.2 cents per litre.

A solution developed by Teletrac Navman that allows users to track and record their fuel use to maximise their Fuel Tax Credit rebate. It works with a high-definition GPS telematics device fitted to your vehicles that collects data via a cellular network and automatically and accurately calculates FTC entitlements for fuel used in off-road travel, off-road idle and auxiliary fuel use. Find out more here.