Fuel tax credits

What are fuel tax credits?

Fuel tax credits can be claimed by businesses for the fuel tax (excise or customs duty) included in the price of fuel used in most of their business activities.

Fuel tax credits can be claimed for any taxable fuel that you purchase, manufacture or import, as long as you use it in your business. 

Taxable fuels can include liquid fuels, including fuel blends and gaseous fuels.

What business activities can I claim fuel tax credits for?

Fuel tax credits provide you with a credit for the fuel tax included in the price of fuel you use for your business activities.

You're able to claim tax fuel credits for business activities in:

  • machinery
  • plant
  • equipment
  • heavy vehicles.

Your business needs to be eligible to make a claim. This means you must be registered for Goods & Services Tax (GST) and fuel tax credits before you can make a claim.

You claim fuel tax credits on your business activity statement (BAS).

Fuel tax credits are also business income and need to be in your tax return at 'Assessable Government industry payments.'

Heavy vehicles used mainly off public roads

The ATO has created a list of heavy vehicles considered to be used off public roads (for example, a tractor or backhoe).

From the March 2016 BAS onwards, if your vehicle type is on this list, you can claim all fuel used for the vehicle at the 'all other business uses' rate, even if you sometimes drive the vehicle on a public road.

To view the list, go to the Heavy vehicles page on the ATO website.

How much credit can I claim?

The amount of fuel tax credits you can claim depends on the type of fuel you use and what business activity you use it in.

When determining your eligibility and making a claim, consider:

  • when you acquired the fuel
  • the type of fuel you use
  • the business activity you're using the fuel for.

Fuel tax credit rate

The fuel tax credit rate is adjusted every year in February and August in line with the consumer price index, so you should check the rates each time you do your Business activity statement (BAS).

It's possible to have more than one rate in a BAS period.

If you claim less than $10,000 in fuel tax credits each year, there is a different way to calculate your rates. See below for details on claims of less than $10,000.

To check the fuel tax credit rates, head to the Australian Taxation Office (ATO) website.

Calculating your fuel tax credits

  • To see if your business is eligible to claim for fuel tax credits, try the Australian Taxation Office (ATO) Fuel tax credit eligibility tool.
  • Get your claim right - use the ATO Fuel tax credit calculator to work out your fuel tax credits.
  • If you're a small business owner, download the ATO app to calculate the fuel tax credit entitlements you can claim on your business activity statement. You can also download or update the ATO app from Google Play, the Windows Phone Store, or the Apple App Store.
  • Be sure to check the rates online before completing your BAS.
  • View some past webinars on fuel tax credits - the webinars will provide you with information about the fuel tax credit rates changes from 1 July 2014, give you tips to avoid common errors and let you know the types of tools and support on offer to help you with your claims.
  • If you're still unsure, get in touch with the ATO on 13 28 66.

Claims of less than $10,000

From the March 2016 BAS onwards, if you claim less than $10,000 in fuel tax credits each year, you can use these simplified methods to calculate your fuel tax credits:

  • When fuel tax credit rates change in a Business Activity Statement (BAS) period, you can now simply use the rate that applies at the end of that BAS period.
  • To work out the total litres of fuel for your claim, you can use the total cost of the fuel you purchased in the BAS period, and divide it by the average price of the fuel for that period.

You can also use a range of documents other than your fuel receipts (such as a bank statement) to support your fuel tax credit claims for all your past and future BAS.

To find out more about the simpler ways to record and calculate your fuel tax credits, visit the Simplified fuel tax credits page on the ATO website.

How do I claim fuel tax credits?

To claim fuel tax credits, make sure:

  • Your business is eligible
    This includes being registered for Goods & Services Tax (GST). Use the Australian Taxation Office's (ATO) Fuel tax credit eligibility tool to find out if you're eligible.
  • You get your claim right
    You can use the ATO Fuel tax credit calculator or the ATO app to work out your fuel tax credits.
  • You claim on your BAS
    You claim fuel tax credits on your BAS in the same way as you claim GST credits.
  • You claim within the time limits
    Generally, you must claim your credits 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.

What to do...

Register for taxes at the same time

The Business registration service Beta helps you register for fuel tax credits and other taxes on the same form. Even though it’s a Beta service, the registrations you apply for are real.

Who can apply?

The Business registration service is currently available for:

  • New businesses starting as a sole trader, partnership, company, trust or joint venture who can apply for tax registrations with an ABN, business name or company registration. In the future, it'll also be available to superannuation funds.
  • Existing businesses with an ABN, who can apply for tax registrations or an AUSkey login.

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