Home: Telematics Glossary: What Are Fuel Tax Credits?

What are Fuel Tax Credits?

What are Fuel Tax Credits?

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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Fuel Tax Credits (FTC)

Credits that a business or organisation can claim as a rebate to recover some or all the amount of excise paid on fuel acquisitions. Any taxable fuel purchased, imported or manufactured for business purposes is eligible for FTC (with the exception for fuel used in aircraft or light vehicles travelling on public roads).

Fuel Tax Rebate

The full or partial refund given back to a business or individual for the excise paid on taxable fuel that they have claimed through the FTC process.

ATO Class Ruling

A type 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) Class Ruling for maximising heavy vehicle FTC claims on an ongoing basis (see Class Ruling 2017/42).

Auxiliary Equipment “Safe Harbour” Percentages

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

Manual Entry

The process of inputting information into a computer or other electronic device by a person rather than automated through software. FTC Manager allows fuel tax credit claims to be completed without the need of manual entry by a business or individual.

Retrospective FTC Review

A review of all aspects of a business’ fuel usage and FTC claims over a four-year retrospective period as allowed with accordance with the FTC legislation.

Heavy Vehicles

Any vehicle with a Gross Vehicle Mass (GVM) that is more than 4.5 tonnes is considered a heavy vehicle for FTC purposes.

Light Vehicles

Any vehicle with a Gross Vehicle Mass (GVM) of 4.5 tonnes or less is considered a light vehicle for FTC purposes.

Off-road FTC Rate

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 40.3 cents per litre.

Road Transport (On-road) FTC Rate

The rate of FTC entitlement for the use of fuel in heavy vehicles for travelling on public roads. Is calculated by subtracting the RUC from the full rate of excise payable on the fuel. The current rate of entitlement is 14.5 cents per litre.

Auxiliary Equipment

Equipment or mechanisms within heavy vehicles that are unrelated to the vehicles’ travel on public roads. 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

On road travel 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.

“Off-road” Travel

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.

Public Roads

Public roads for FTC purposes are those that are:

  • opened, declared or dedicated as a public road 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.

State Roads

State Roads for FTC purposes are those that are:

  • a road constructed or maintained under a statutory regime by a public authority that is not an authority responsible for the provision of road transport infrastructure, in circumstances where the statutory regime provides that public use of, or access to, the road is subordinate to the primary objects of the statutory regime;
  • a forestry road; or
  • a road that has not been dedicated as a public road over privately-owned land.

Business Activity Statement (BAS)

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

Road User Charge (RUC)

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 at 1 July 2017, the RUC was set at 25.8 cents per litre.

FTC Manager

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.

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Centreline Geotunnel

A method used by FTC Manager to determine when vehicles are travelling on and off public roads. The centreline geotunnel is created 60 metres either side of the centreline of the road (i.e. 120m geotunnel) and everything within the tunnel is considered “on-road” for FTC purposes. This allows FTC Manager to have a conservative starting point for calculations as the vast majority of Australia’s road network is under 50 metres wide.

Geofences or Map Road Adjustments

A method used by FTC Manager to determine when vehicles are travelling on and off public roads. Geofences can be set as either on-road or off-road areas and override the centreline geotunnel method to provide a more accurate and precise calculation of on- and off-road travel distances.

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