Fuel tax credits give businesses a credit for the fuel excise included in the price of taxable fuel used in eligible business activities, such as heavy vehicles, plant, machinery and auxiliary equipment. Eligible businesses claim them through their Business Activity Statement (BAS). For transport, construction, civil, mining and agriculture operators they can be a significant cash entitlement, so getting the calculation and records right matters.
What are fuel tax credits?
Fuel tax credits refund the fuel excise built into the price of fuel you buy, for fuel used in running your business. In Australia you claim the credit on your BAS. How much you can claim depends on the fuel, how it's used, and the fuel tax credit rate that applies for the period.
Who can claim fuel tax credits?
You can generally claim if your business is registered for GST and registered for fuel tax credits, and you use taxable fuel in eligible activities. Eligibility depends on the fuel type, how the fuel is used, and whether the activity is on or off public roads.
Which fuels and activities are eligible?
In broad terms, fuel tax credits can apply to fuel used in:
- Heavy vehicles over 4.5 tonnes gross vehicle mass travelling on public roads
- Plant, equipment and machinery
- Auxiliary equipment, for example a crane, pump or mixer drum
- Vehicles and activities on private roads and off public roads
Two important boundaries:
- Fuel used in light vehicles of 4.5 tonnes or less travelling on public roads is not eligible.
- Fuel used by heavy vehicles travelling on public roads is reduced by the road user charge, so it attracts a lower credit than fuel used off public roads or to power auxiliary equipment.
Eligibility depends on fuel type, how the fuel is used, and the applicable ATO rules for the period.
How do you claim fuel tax credits?
You report your fuel tax credit amount at label 7D on your BAS. In simple terms:
Fuel tax credit = eligible litres × the fuel tax credit rate for that fuel, use and period.
Rates change through the year, so confirm the current rate using the ATO's fuel tax credit calculator or rate tables when you prepare each BAS. Working out the eligible litres, the split between on-road, off-road and auxiliary use, is the part that takes the most care, and is where accurate records or GPS data help.
What are the time limits and record requirements?
- You generally have four years to claim a fuel tax credit, from the due date of the BAS in which you could first have claimed it. After that the entitlement expires.
- You must keep the records that support a claim for five years, generally from when the record was prepared or obtained, or from when the transaction was completed, whichever is later.
Your records should show the fuel was acquired for business use, the quantity used in eligible activities, and how your calculation method was applied. See record keeping best practices for more.
Where Nuonic fits
Nuonic turns your fuel and GPS data into clear on-road, off-road and auxiliary allocations and calculation-ready reporting, with every figure traceable to source for audit. See how Nuonic calculates FTC.
ATO references
Important
This article is general information, not tax advice. For legal or tax decisions, confirm requirements against current ATO publications or speak with a qualified advisor.