Claiming fuel tax credits
Before you can claim your fuel tax credits on your BAS, you must
For fuel you acquired up to 30 June 2014 for use in heavy vehicles for travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your BAS. From 1 July 2014, you will need to use the rate when you acquired the fuel.
See also
- The Fuel tax credit calculator can help you work out how much you can claim – it is quick and easy to use.
- Check out our tips to get your fuel tax credits right.
Records you must keep
To work out your fuel tax credits accurately and to support your claims, you must keep complete and accurate records.
Now that many fuel tax credit rates are changing regularly, it is even more important to keep good records. You need to show the type and quantity of fuel you acquired and the business activities you use it in, such as whether it was for travelling on a public road or in other eligible activities.
You also need to keep both the following:
- records of when the fuel was acquired and how you use it, because generally this will help you work out the correct fuel tax credit rate for each fuel
- records which support any fair and reasonable method you have applied to work out the amount of fuel used.
You must have business and tax records that show which activities your business is carrying out, and records to support your actual claim.
Records that show your business activities include:
- business expenses that relate to eligible activities
- sales and production records
- lease documents for agricultural land or equipment
- sharefarming contracts
- vehicle and equipment use and maintenance records
- work contracts
- government requirements, such as licences.
Records that support your claims for fuel tax credits include:
- tax invoices for fuel you have acquired, including when it was acquired and the quantity
- bank statements
- records of how you used the fuel and any that was lost, stolen or otherwise disposed of
- records showing how you have worked out your fuel tax credits – the worksheet we send you with your BAS is a useful record to keep.
For heavy diesel vehicles manufactured before 1 January 1996 and used on a public road, your records must show you meet one of the environmental criteria – for example, you service your vehicle according to an approved maintenance schedule.
If you claim less than $300 in fuel tax credits in a year, you do not have to keep records showing you acquired fuel – however, the fuel you acquire must be for use in an eligible business activity.
The records must be in English (or easily translated into English) and you must keep them for five years after you make the claim. You do not need to send your records to us unless we ask you to.
See also:
- Heavy vehicles
- Calculating eligible quantities
- FTD 2006/2 Fuel tax: what records are required to be kept by taxpayers to substantiate a claim for a fuel tax credit?
Tax invoices
From 1 July 2010, the requirements for a document to be a valid tax invoice were relaxed. As a result of the changes, documents will generally only fail to be a tax invoice where key information has not been provided.
A tax invoice should include enough information to enable the following to be determined:
- that the document is intended to be a tax invoice
- date of purchase
- purchaser’s name
- type of fuel
- quantity purchased
- price
- supplier’s name
- supplier's ABN
- GST payable.
If you cannot support your claims with adequate records, you may have to repay all or part of the fuel tax credits you have received. You may also incur penalties.
If the first page of your invoice for non-transport LPG includes the words 'Not to be used, or supplied, for transport use. Penalties apply', you cannot use the fuel for transport use.
Work out what you are entitled to
There are three steps to calculate your fuel tax credits:
- Step 1 – work out the eligible quantity (litres or kilograms) for each fuel type and each business activity.
- Step 2 – check which fuel tax credit rate applies for each taxable fuel used in each of your activities.
- Step 3 – work out the amount of your fuel tax credits in dollars by multiplying the eligible quantity of fuel by the relevant fuel tax credit rate (step 1 × step 2).
The amount of fuel tax credits you can claim depends on what fuel you use, when you acquired it, and how you use the fuel.
There are different rates for different fuels and different activities, so remember to separate your calculations for each fuel type and for each activity that has a different fuel tax credit rate.
You need to use the rate that applied when you acquired the fuel – this may not necessarily be the rate in effect when you use the fuel or claim your fuel tax credits.
Step 1 – work out the eligible quantity
You will need to do a separate calculation for each fuel type and business activity.
Check the quantity of fuel you have acquired (litres or kilograms) and work out how much of that fuel is eligible for fuel tax credits. You must exclude any fuel where:
- it was used in an ineligible activity – for example, in a vehicle of 4.5 tonnes GVM or less travelling on public roads
- the fuel tax credits have already been claimed earlier in the supply chain
- you acquired it, but did not use the fuel because it was lost, stolen or otherwise disposed of.
If you measure LPG in kilograms, or CNG in megajoules, standard conversion rates are provided to help you work out your fuel tax credits. The rates are:
- 1 kg of LPG = 1.885 litres of LPG
- 1 megajoule of CNG = 0.01893 kg of CNG.
There are a number of apportionment methods and measures you can use to work out the eligible quantity of fuel. The common methods are the:
- constructive method – where you add up all the eligible quantities of each fuel type and activity
- deductive method – where you subtract any ineligible fuel, such as fuel you used in small vehicles on a public road, from your total fuel
- percentage use method – where you determine a reliable percentage of eligible fuel usage for a sample period and apply this over a number of tax periods
- estimated use method – where you make a fair and reasonable estimate of the quantity of fuel you acquire for use in a tax period for
- eligible and ineligible activities
- multiple activities that have different fuel tax credit rates.
You can also use a reliable measure as part of an apportionment method, such as:
- odometer readings of kilometres actually travelled
- route distances if a vehicle travels on fixed routes
- kilowatt hours of electricity generated
- hours of operation for the vehicle or equipment
- average hourly fuel consumption of vehicles or equipment.
See Calculating eligible quantities for more information.
Step 2 – check the fuel tax credit rate for each taxable fuel type and activity
The amount of fuel tax credits you can claim depends on the fuel you use, when you acquired it and how you use it in your business.
You need to use the rate that applied when you acquired the fuel – this may not necessarily be the rate in effect when you use the fuel or claim your fuel tax credits.
However, for heavy vehicles travelling on a public road where the fuel is used:
- for travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your BAS
- in auxiliary equipment of the heavy vehicle travelling on a public road, you need to use the rate in effect when the fuel was acquired.
Fuel tax credit rates change regularly – before you lodge your BAS, check the fuel tax credits rates to make sure you are using the right rates.
There are time limits for claiming fuel tax credits – generally, you must claim within four years. The four years commences from the day after you were required to lodge the BAS for the tax period in which the fuel was acquired.
See Fuel tax credits rates for more information.
Step 3 – work out the fuel tax credit amount
To work out the dollar amount of your fuel tax credit entitlements, you must multiply your eligible quantities of fuel for each activity by the relevant fuel tax credit rate for that fuel type and activity (if you have different rates for different activities or use different fuel types).
When you have worked out the dollar amount for each activity and fuel type, add all these figures together to arrive at a total for each tax period, then claim this amount (include whole dollars only) by writing it at label 7D on your BAS..
Next step
See also