Fuel tax credits for business

Transcription

1 Guide for businesses that use fuel Fuel tax credits for business Information about who can receive fuel tax credits and how to claim them NAT

2 OUR COMMITMENT TO YOU We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations. If you follow our information in this publication and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest. If you make an honest mistake in trying to follow our information in this publication and you owe us money as a result, we will not charge you a penalty. However, we will ask you to pay the money, and we may also charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to. If you feel that this publication does not fully cover your circumstances, or you are unsure how it applies to you, you can seek further assistance from us. We regularly revise our publications to take account of any changes to the law, so make sure that you have the latest information. If you are unsure, you can check for more recent information on our website at ato.gov.au or contact us. This publication was current at October AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA, 2013 You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). PUBLISHED BY Australian Taxation Office Canberra October 2013 JS 29526

3 CONTENTS ABOUT THIS GUIDE 2 What s new in this guide? 2 CAN YOUR BUSINESS CLAIM FUEL TAX CREDITS 3 ABOUT FUEL TAX CREDITS 4 Introduction 4 Background of fuel tax credits 4 CLEAN ENERGY AND THE CARBON CHARGE 5 Fuels and activities not affected by the carbon charge 5 Fuels and activities affected by the carbon charge 5 Are you in the opt-in scheme? 5 RATES AND ELIGIBLE FUELS AT A GLANCE 6 01 ELIGIBLE FUELS 8 Liquid fuels 8 Fuel used in aircraft 8 Gaseous fuels 8 Blended fuels 10 Fuels which are not eligible ELIGIBLE ACTIVITIES 11 Activities where the fuel is combusted 11 Activities where the fuel is not combusted 11 Packaging or supplying fuel 11 Road transport 11 Agriculture 14 Fishing 15 Forestry 16 Other off-road activities where the fuel is combusted 17 Non-combustible use 18 Packaging or supplying fuel PUBLIC AND PRIVATE RULINGS 22 You may need a private ruling 22 Self-assessment REGISTERING 23 How to register for fuel tax credits 23 How to cancel your registration 23 Changing tax periods WORKING OUT YOUR FUEL TAX CREDITS 24 Records you must keep 24 Tax invoices 25 Step 1: Work out the eligible quantity 25 Step 2: Check the fuel tax credit rate for each taxable fuel type and activity 26 Step 3: Work out the fuel tax credit amount CLAIMING 27 Claiming fuel tax credits 27 When to claim 27 How to complete your claim 27 How to submit your claim 27 If you pay GST in instalments 28 Income tax and fuel tax credits ADJUSTMENTS AND ERRORS 29 Adjustments 29 Errors 29 Penalties and interest charges 30 CHECKLIST 31 FUEL TAX CREDITS CALCULATION WORKSHEET 32 MORE INFORMATION inside back cover Fuel tax credits for business 1

4 ABOUT THIS GUIDE This guide provides businesses that use fuel with the information you need about fuel tax credits. It will: help you assess if you are eligible give you an introduction to fuel tax credits give more detailed information about eligibility for fuel tax credits show you how to work out which fuel tax credit rates apply to your business activities explain how to register, if you have not already explain what records you must keep show you how to work out how much you can claim describe how to claim your credits. Look for this symbol key information. throughout this guide to find At this symbol, you will also find more information boxes that will show further steps you may need to take, or supplementary information you may want to refer to. We often refer to QC numbers, which can be used to search for publications on our website. For more information about how to access our publications and services, see More information (inside back cover). You can also claim fuel tax credits if you are a: householder using fuel to generate domestic electricity non-profit organisation not registered for goods and services tax (GST) and operating emergency vehicles or vessels. These activities have separate claiming arrangements. WHAT S NEW IN THIS GUIDE? The guide incorporates information about fuel used to power auxiliary equipment of a heavy vehicle and changes that affect fuel tax credits from 1 July Auxiliary equipment of a heavy vehicle Liquid or gaseous fuel you use to power auxiliary equipment such as refrigeration units of a heavy vehicle travelling on a public road is not reduced by the road user charge or the carbon charge. If you did not claim using the correct rate previously, you may be able to correct your previous claims. See Fuel used to power auxiliary equipment on page 12. Changes from 1 July 2013 You may be affected by: changes to some rates due to an increase in carbon charge amounts a rate change for liquid fuels used in heavy vehicles for travelling on public roads increased rates for transport gaseous fuels, other than when used for travelling on public roads changes to rates for non-transport gaseous fuels used in certain activities. In addition, rates for some liquid fuels and domestic aviation fuels have changed for entities that are declared by the Clean Energy Regulator to be designated opt-in persons under the opt-in scheme. For more information about these changes, refer to Fuel tax credits changes from 1 July 2013 (QC 33571). For more information about claiming fuel tax credits if you are a householder or non-profit organisation, refer to Fuel tax credits domestic electricity generation and non-profit emergency vehicles or vessels (QC 35531). 2 Fuel tax credits for business

5 CAN YOUR BUSINESS CLAIM FUEL TAX CREDITS Most businesses can claim fuel tax credits it is just the rate that varies, depending on what fuel you use and how you use it in your business activities. Do you use fuel in your business (eg, in machinery, plant, equipment or vehicles)? NO You are not eligible for fuel tax credits. YES Is your fuel only used in light vehicles of 4.5 tonne GVM or less travelling on a public road? YES You are not eligible for fuel tax credits. NO Do you only use the following fuels in your business? n diesel n petrol n gaseous fuels (LPG, CNG, LNG) n kerosene n heating oil n toluene n fuel oil n industrial solvents. NO Aviation fuels* and some alternative fuels are not eligible for fuel tax credits. YES You may be entitled to claim fuel tax credits for the fuel. The rate you can claim depends on the type of fuel and how it was used. GO TO More information about: n eligible fuels n eligible activities. See links below. * If you have been declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme, you are able to claim fuel tax credits for domestic use of aviation gasoline or aviation kerosene see Are you in the opt-in scheme? on page 5. For more information about: fuels eligible for fuel tax credits, see Eligible fuels on page 8 activities eligible for fuel tax credits, see Eligible activities on page 11. Fuel tax credits for business 3

6 ABOUT FUEL TAX CREDITS INTRODUCTION Fuel tax credits provide you with a credit for the fuel tax (excise or customs duty) included in the price of fuel you use for your business activities in: n machinery n plant n equipment heavy vehicles. You may also be entitled to fuel tax credits for non-transport gaseous fuels that have been subject to the carbon pricing mechanism and used in specified agriculture, fishing or forestry activities. The only fuels that are not eligible are: aviation fuels (aviation gasoline and aviation kerosene) unless you have been declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme fuels you use in light vehicles of 4.5 tonne gross vehicle mass (GVM) or less, travelling on a public road fuel you acquired but did not use because it was lost, stolen or otherwise disposed of some alternative fuels, such as ethanol or biodiesel that have already received another grant or subsidy. You must be registered for both GST and fuel tax credits before you can make a claim. You claim fuel tax credits on your business activity statement (BAS). Depending on your circumstances, you may also need to meet an environmental criterion for heavy diesel vehicles if they were manufactured before 1 January For more information about: activities eligible for fuel tax credits, see Eligible activities on page 11 registering for fuel tax credits, see Registering on page 23 the diesel vehicle environmental criteria, see Environmental criteria for heavy diesel vehicles manufactured before 1 January 1996 on page 13. For more information about: the opt-in scheme, refer to the Clean Energy Regulator website at cleanenergyregulator.gov.au The fuel tax credit rates used in the examples in this guide are valid for the situation described and the reporting period. Rates may vary for the current rates, refer to Fuel tax credit rates and eligible fuels (QC 21459). BACKGROUND OF FUEL TAX CREDITS On 1 July 2006, fuel tax credits were introduced for fuel used in heavy vehicles and in a range of other business activities. Eligibility was expanded on 1 July 2008 to include (at a half rate) taxable fuels used in other business activities, machinery, plant and equipment as part of a gradual implementation. From 1 July 2012, these activities became eligible for the full fuel tax credit rate, but the rate for most is reduced by a carbon charge. From 1 December 2011, excise or customs duty applies to gaseous fuels that is, liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) for transport use in most instances. From this date, fuel tax credits became available for duty paid gaseous fuels acquired, manufactured or imported for use in eligible off-road business activities. Non-transport use of gaseous fuels is eligible in certain circumstances. From 1 July 2012, under clean energy laws a carbon charge generally applies to certain taxable fuels that are combusted. Also, there were changes to non-transport gaseous fuels that affected fuel tax credit rates for certain activities. From 1 July 2013, carbon charge amounts increased and there were other changes to non-transport LPG and LNG that affect fuel tax credit rates for certain activities. 4 Fuel tax credits for business

7 CLEAN ENERGY AND THE CARBON CHARGE A carbon charge applies to certain taxable fuels where the fuel is combusted, by reducing fuel tax credit rates by the relevant carbon charge. It is an amount equal to the price of carbon emissions from the use of liquid or gaseous fuels. The carbon charge amount varies for different fuels, depending on their carbon emissions rate. From 1 July 2013, carbon charge amounts increased, reducing fuel tax rates for some fuels and activities other than those listed below. FUELS AND ACTIVITIES NOT AFFECTED BY THE CARBON CHARGE Fuel tax credit rates are not reduced by a carbon charge for: liquid and transport gaseous fuels used in vehicles with a GVM greater than 4.5 tonne travelling on a public road specified agriculture, fishing or forestry activities activities that do not involve combustion of the fuel for example, fuel used to clean machinery or as a mould release agent liquid fuels used by businesses that have been declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme renewable fuels, such as biodiesel or fuel ethanol. You can claim fuel tax credits at a rate equal to the carbon charge amount if the fuel is: non-transport gaseous fuel used in specified agriculture, fishing or forestry activities domestic aviation fuel (aviation gasoline or aviation kerosene) used by businesses that have been declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme. ARE YOU IN THE OPT-IN SCHEME? Certain large users of liquid fuels can apply to the Clean Energy Regulator to opt in to the carbon pricing mechanism. If the application is accepted, they will be declared a designated opt-in person. From 1 July 2013, a designated opt-in person discharges their carbon liability on their liquid fuel use through the carbon pricing mechanism instead of through the excise and fuel tax credit systems. If you are a designated opt-in person who is registered for fuel tax credits: the fuel tax credit rates for liquid fuels you acquire from 1 July 2013 are no longer reduced by the carbon charge as a result, you can claim cents per litre for liquid fuels you use in eligible off-road activities, such as construction, mining or landscaping you can claim fuel tax credits at a rate equal to the carbon charge amount for domestic aviation fuels (aviation gasoline or aviation kerosene) you acquire from 1 July You can find the fuel tax credit rates for fuels covered under the opt-in scheme at Fuel tax credit rates and eligible fuels (QC21459). For more information about: the opt-in scheme, visit the Clean Energy Regulator website at cleanenergyregulator.gov.au the tax implications of the clean energy legislative package, visit our website at ato.gov.au/ cleanenergyfuture the Clean Energy Future plan, visit cleanenergyfuture.gov.au FUELS AND ACTIVITIES AFFECTED BY THE CARBON CHARGE Fuel tax credit rates for liquid and transport gaseous fuels are reduced by a carbon charge for all other activities. Carbon charge amounts will increase annually, reducing fuel tax credit rates until 30 June The rates will then be adjusted every six months, from 1 July 2015, due to changes in the carbon price. Fuel tax credits for business 5

8 RATES AND ELIGIBLE FUELS AT A GLANCE Fuel tax credit rates are subject to change due to changes in the carbon price, the road user charge and excise duty rates on gaseous fuels. When calculating your credits, make sure you use the correct and most up-to-date rates for your business. For current and previous years rates and rates for blended fuels, refer to Fuel tax credit rates and eligible fuels (QC 21459). Need help working out your fuel tax credits? Use our online tools, which have been improved and are easier and quicker to use: Fuel tax credit eligibility tool (QC 21085) helps you determine which of your activities are eligible and what rates apply. Fuel tax credit calculator (QC 18866) helps you work out how much you can claim. TABLE 1: Fuel tax credit rates for liquid and gaseous fuels from 1 July 2013 All rates are in cents per litre unless otherwise stated. Business use In a heavy vehicle* (including emergency vehicles) for travelling on a public road. Specified off-road activities in: agriculture fishing forestry. Other off-road activities where the fuel is combusted for example: mining marine or rail transport (including emergency vessels) nursing and medical burner applications electricity generation by a commercial generation plant, stationary generator or a portable generator construction manufacturing wholesale/retail property management landscaping. Eligible fuel Liquid fuels for example, diesel or petrol Rate for fuel acquired from 1 July ** Duty paid LPG, LNG or CNG transport 0.0** Liquid fuels for example, diesel or petrol Duty paid LPG transport 7.5 Duty paid LNG or CNG transport cents/kilogram LPG non-transport CNG or LNG non-transport cents/kilogram Petrol *** Diesel and other liquid fuels *** Duty paid LPG transport 3.636*** Duty paid LNG or CNG transport 8.666*** cents/kilogram LPG, LNG or CNG non transport 0.0 Opt-in liquid fuels only for use by a designated opt-in person under the opt-in scheme # 6 Fuel tax credits for business

9 RATES AND ELIGIBLE FUELS AT A GLANCE Business use To power auxiliary equipment of a heavy vehicle* travelling on a public road such as fuel used to power a refrigeration unit or a concrete mixing barrel. Non-combustible uses, such as: fuel you use directly as a mould release fuel you use as an ingredient in the manufacture of products that are not suitable for use as fuel in an internal combustion engine LPG used as a propellant in the manufacture of aerosols. Packaging fuels in containers of 20 litres or less for uses other than in an internal combustion engine. Eligible fuel Liquid fuels for example, diesel or petrol. Rate for fuel acquired from 1 July ^ Duty paid LPG transport 7.5^ Duty paid LNG or CNG transport Liquid fuels for example, diesel or petrol ^ cents/kilogram LPG, LNG or CNG non-transport 0.0 Duty paid LPG transport 7.5 Duty paid LNG or CNG transport Mineral turpentine, white spirit, kerosene and certain other fuels cents/kilogram Supply of fuel for domestic heating. Heating oil and kerosene *** Supplying LPG: by filling cylinders of 210 kg capacity or less for non-transport use in tanks for residential use. In an aircraft for domestic travel only for use by a designated opt-in person under the opt-in scheme. Duty paid LPG transport 3.636*** LPG non-transport 0.0 Aviation kerosene 6.279# Aviation gasoline 5.313# NOTES TO TABLE 1 * A heavy vehicle is greater than 4.5 tonne gross vehicle mass (GVM). Diesel vehicles acquired before 1 July 2006 can equal 4.5 tonne GVM. ** This rate accounts for the road user charge which is subject to change and currently exceeds the rate for gaseous fuels. It applies to fuel used in a heavy vehicle for travelling on a public road. ***The rates for these activities account for the carbon charge, which changes annually until 1 July 2015, then six-monthly thereafter due to changes in the carbon price. ^ This fuel use is not reduced by the road user charge or the carbon charge. # To use this rate, you must be declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme. Fuel tax credits for business 7

10 01 ELIGIBLE FUELS You can claim fuel tax credits for any taxable fuel you acquired, manufactured or imported to use in carrying on your business. Fuel is taxable fuel if excise or customs duty must be paid on it or it is a non-transport gaseous fuel that is covered under the carbon pricing mechanism. Taxable fuels can be: liquid fuels gaseous fuels blended fuels. You cannot claim fuel tax credits for fuel if no excise or customs duty is required to be paid on it, or it is a non-transport gaseous fuel that is not covered under the carbon pricing mechanism. For example, used oil that has only been subject to filtering and de-watering and used as fuel oil in burner applications is not eligible for fuel tax credits because no duty has been paid on it. LIQUID FUELS Liquid fuels (that is, taxable liquid fuels) are: petrol diesel other combustible fossil fuels, such as kerosene mineral turpentine white spirit toluene heating oil some solvents. Fuel ethanol and biodiesel are not included because they have no effective fuel tax and are not fossil fuels. For some business activities, you can only claim for certain taxable fuels. For more information: find your business activity under Eligible activities on pages see Rates and eligible fuels at a glance on page 6. FUEL USED IN AIRCRAFT Aviation fuels are aviation gasoline and aviation kerosene. But there are instances where other liquid fuels, such as petrol or diesel, have been used to power aircraft. Fuel tax credits are only available for domestic aviation fuels aviation gasoline and aviation kerosene if you have been declared by the Clean Energy Regulator to be a designated opt-in person under the opt-in scheme. You can claim fuel tax credits at a rate equal to the carbon charge amount for domestic aviation fuels you acquire from 1 July If you acquire diesel or petrol and use it in an aircraft as part of your business activities, there may be circumstances where you can claim fuel tax credits. If you are unsure if you can claim fuel tax credits for fuel used in your aircraft, phone us on between 8.00am and 6.00pm, Monday to Friday. You may need to apply for a private ruling for more information, see You may need a private ruling on page 22. GASEOUS FUELS If you use gaseous fuels (acquired from 1 December 2011) in eligible business activities, you may be entitled to fuel tax credits. Gaseous fuels are: LPG LNG CNG. Transport gaseous fuels are duty paid and include: LPG or LNG intended for use in an internal combustion engine of a motor vehicle or vessel (boat, etc), either directly or by filling another tank connected to such an engine CNG that is imported or compressed for use as a fuel in a motor vehicle excluding CNG that is compressed at a residential premises using equipment capable of compression at a rate not more than 10 kg of natural gas per hour and not for further sale all gaseous fuels for mixed use (that is, both transport and non-transport use) or where the end use is unknown. From 1 July 2013, fuel tax credit rates for transport gaseous fuels increased due to the annual increase in excise duty for gaseous fuels (until 1 July 2015). Some fuel tax credit rates for these fuels are also reduced by carbon charge amounts which change annually until 30 June 2015, then six-monthly thereafter. 8 Fuel tax credits for business

11 01 ELIGIBle fuels Non-transport gaseous fuels are not duty paid and include: LPG and LNG delivered only for use other than in an internal combustion engine of a motor vehicle or vessel (for example, in residential heating or burner applications) or for use in forklifts. The invoice for non-transport LPG is generally marked with the text Not to be used, or supplied, for transport use. Penalties apply. CNG imported or compressed only for use in forklifts or not for use as a fuel in a motor vehicle. It also includes CNG compressed at a residential premises (including for use in a motor vehicle) using equipment capable of compression at a rate not more than 10 kg of natural gas per hour and not for further sale. From 1 July 2013, if a carbon charge applies to non-transport gaseous fuel, it is applied via the carbon pricing mechanism. Conversion rates If you measure LPG in kilograms or CNG in megajoules, standard conversion rates are provided to help you calculate your fuel tax credit entitlement. The rates are: 1 kg of LPG = litres of LPG 1 megajoule of CNG = kg of CNG. If your measuring equipment measures CNG other than in kilograms, refer to Excise (Mass of CNG) Determination 2012 (No. 1) at comlaw.gov.au for approved methods to convert cubic metres or megajoules to kilograms. You can only use the conversion rate for LPG if you measure the LPG using equipment other than volumetric measurement equipment. Penalties apply if you use or supply non-transport LPG for transport use. EXAMPLE: LPG supplied for non-transport use In August 2013, Universal LPG delivers bulk LPG to Outback Mining. Outback Mining uses the LPG to fuel their electricity generator. Universal LPG has not paid excise duty on the LPG because it is supplied for non-transport use. Instead, Universal LPG settles their carbon liability on that fuel under the carbon pricing mechanism. The invoice from Universal LPG is marked Not to be used, or supplied, for transport use. Penalties apply. Outback Mining is not entitled to claim fuel tax credits for their non-transport use to fuel the generator. EXAMPLE: LPG conversion Paul owns a farm that uses LPG to dry his grain. He acquires his LPG by the kilogram. In December 2013, he acquires 4,000 kg of LPG that has been duty paid at the transport rate for use in his grain dryer. Because Paul is conducting an agricultural activity that is exempt from the carbon charge, he is able to claim the full fuel tax credit of 7.5 cents per litre for the duty paid LPG. So he can claim his fuel tax credits, Paul converts the 4,000 kg of eligible LPG to litres as follows 4,000 kg = 7,540 litres of duty paid LPG. Fuel tax credits for business 9

12 01 ELIGIBle fuels BLENDED FUELS Diesel blends Your fuel tax credit is, in part, based on the effective fuel tax paid on the particular fuel. Generally, no effective fuel tax is paid on biodiesel, but special rules apply to diesel blends containing 20% biodiesel or less. The effective fuel tax paid is calculated as if the fuel you are using is entirely diesel, if both of the following apply: your fuel is a blend of diesel and biodiesel it contains 20% or less biodiesel for example, B20. Petrol blends Your fuel tax credit is, in part, based on the effective fuel tax paid on the particular fuel. Generally, no effective fuel tax is paid on fuel ethanol, but special rules apply to petrol blends containing 10% ethanol or less. The effective fuel tax paid is calculated as if the fuel you are using is entirely petrol, if both of the following apply: your fuel is a blend of petrol and ethanol it contains 10% or less ethanol for example, E10. Other blends For other blends of two or more taxable fuels, the effective fuel tax paid is calculated based on the proportion of each taxable fuel. From 1 July 2012, the amount of fuel tax credit you can claim for blends may be affected by the carbon charge. For more information, see Rates and eligible fuels at a glance on page 6. For more information about fuel blends, refer to Fuel tax credits fuel blends (QC 25200). FUELS WHICH ARE NOT ELIGIBLE Some fuels are not eligible, including: aviation fuels (aviation gasoline and aviation kerosene) unless you are declared by the Clean Energy Regulator as a designated opt-in person under the opt-in scheme fuels you use in light vehicles of 4.5 tonne GVM or less, travelling on a public road for example, a car, small van or taxi fuel you acquired but did not use because it was lost, stolen or otherwise disposed of some alternative fuels, such as ethanol or biodiesel that have already received another grant or subsidy. 10 Fuel tax credits for business

13 ELIGIBLE ACTIVITIES 02 The amount of fuel tax credits you are entitled to claim depends on what fuel you use and what business activity you use it in such as if the fuel was combusted or not. Fuel is combusted when it is burnt or ignited for example, in an internal combustion engine or in a cement kiln. ACTIVITIES WHERE THE FUEL IS COMBUSTED Road transport that is, vehicles with a GVM greater than 4.5 tonne travelling on a public road (diesel vehicles you acquired before 1 July 2006 can equal 4.5 tonne GVM) Specified off-road activities in agriculture fishing forestry Other off-road activities for example mining marine and rail transport nursing and medical services burner applications electricity generation by commercial generator plant, stationary generator or a portable generator construction manufacturing wholesale/retail property management landscaping. Off-road activities include vehicles travelling on private roads. ACTIVITIES WHERE THE FUEL IS NOT COMBUSTED Non-combustible uses include: fuel you use directly in a non-fuel manner for example, as a solvent fuel you use as an input or ingredient in the manufacture of products. PACKAGING OR SUPPLYING FUEL Fuel can be packaged or supplied for a: combustible use, including filling LPG into cylinders of 210 kg capacity or less for supply for non-transport use supplying transport LPG for transfer into tanks for residential use supplying or distributing kerosene or heating oil fuel for domestic home heating non-combustible use, including packaging certain liquid fuels in containers of 20 litres or less. ROAD TRANSPORT For the latest rates for heavy vehicles travelling on a public road, see Rates and eligible fuels at a glance on page 6. For fuel you use: in a heavy vehicle 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 to power auxiliary equipment of a heavy vehicle travelling on a public road, you need to use the rate in effect on the day you acquired the fuel. If your activity is not listed here, such as fuel used in a vehicle on a private road, it may be eligible under another activity with a different fuel tax credit rate. Heavy vehicles are those vehicles that have a GVM greater than 4.5 tonne. Diesel vehicles acquired before 1 July 2006 can equal 4.5 tonne GVM. The GVM of a vehicle is the GVM accepted by the authority that registered the vehicle. Trailers cannot be included in the GVM of a rigid vehicle. For prime movers, the GVM is the gross combination mass that is, the mass of the vehicle and the trailer. You can claim fuel tax credits for taxable fuels you use in a heavy vehicle, including emergency vehicles, travelling on a public road if the vehicle meets all the following conditions: it is used in carrying on a business it has a GVM greater than 4.5 tonne diesel vehicles acquired before 1 July 2006 can equal 4.5 tonne GVM diesel vehicles meet any one of the environmental criteria. Fuel tax credits for business 11

14 02 eligible activities The rate you use when working out your fuel tax credit amounts depends on the fuel used and whether you use it: in a heavy vehicle for travelling on a public road this rate is reduced by the road user charge to power auxiliary equipment of the heavy vehicle travelling on a public road this rate is not reduced by the road user charge or the carbon charge. For more information, refer to Fuel tax credits travel and other activities for heavy vehicles (QC 22974). For the current and previous years rates for a vehicle with a GVM greater than 4.5 tonne travelling on a public road: refer to Fuel tax credit rates and eligible fuels (QC 21459) phone us on between 8.00am and 6.00pm, Monday to Friday. Fuel used for travelling on a public road For heavy vehicles travelling on a public road, the amount of fuel tax credits for fuel used for travelling on the public road is reduced by the road user charge, which is subject to change. Fuel used for travelling includes fuel used for propulsion of the heavy vehicle along the public road, but also includes: stopping or idling in the course of the journey certain vehicle functions for the purpose of travelling, such as lights, brakes, power-steering and windscreen wipers. It does not include fuel used for purposes unrelated to a vehicle s movement on a public road. Transport gaseous fuels that is, LPG, LNG or CNG used in heavy vehicles for travelling on a public road are eligible for fuel tax credits. However, the road user charge currently reduces any fuel tax credits to nil for these fuels where it is used for travelling on a public road. You can convert the road user charge rate to cents per kilogram for LNG and CNG by multiplying it by EXAMPLE: Road user charge Jim s Removalists operates four 5-tonne diesel trucks. All the fuel Jim acquires for the trucks is used for travelling on public roads. In May 2013, Jim s Removalists acquired 10,000 litres of diesel to use in their trucks. The fuel tax credit rate for heavy vehicles in May 2013 was cents per litre that is, cents per litre, minus the road user charge of 25.5 cents per litre. When lodging his monthly BAS for May 2013, Jim s fuel tax credit claim was $1,264. This was worked out by fuel acquired in May ,000 litres cents per litre = $1, On 1 July 2013, the road user charge increased, which meant the fuel tax credit rate for heavy vehicles changed to cents per litre. In July 2013, Jim s Deliveries acquired another 10,000 litres of diesel. When lodging his monthly BAS for July 2013, Jim s fuel tax credit claim was $1,200. This was worked out by fuel acquired in July ,000 litres cents per litre = $1, Fuel used to power auxiliary equipment Liquid or gaseous fuel you use to power auxiliary equipment of a heavy vehicle travelling on a public road is not reduced by the road user charge or the carbon charge. This fuel use is considered to be unrelated to a vehicle s movement along a public road, such as powering: the concrete-mixing barrel of a concrete truck garbage bin lifters and compactors of a garbage truck the refrigeration unit of a vehicle that transports temperature-sensitive goods the hydraulics of a truck used to raise and lower the tray of a tipper truck the air-conditioning of a commercial bus or coach for passenger comfort. The fuel that is used to power the auxiliary equipment may be sourced from a separate fuel tank or from the tank that fuels the main engine. The auxiliary equipment may also take its power from the main engine (known as power take-off ), which in turn increases the fuel used. 12 Fuel tax credits for business

15 02 eligible activities Fuel used in auxiliary equipment does not include fuel you use in mobile equipment, such as forklifts and bobcats. This type of plant or equipment may be eligible under Other off-road activities where the fuel is combusted on page 11. For more information, refer to Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle s travel on a public road that is incidental to the vehicle s main use and the road user charge at law.ato.gov.au Correcting claims for fuel used to power auxiliary equipment of a heavy vehicle Special rules apply if you are correcting previous fuel tax credit claims for fuel used to power auxiliary equipment of a heavy vehicle travelling on a public road, if you either: used the rate for liquid fuels in heavy vehicles for travelling on public roads, which is reduced by the road user charge did not claim for duty paid gaseous fuel because the road user charge exceeded the credit for the fuel used in the auxiliary equipment. For correcting previous claims in a BAS for fuel used to power auxiliary equipment of a heavy vehicle travelling on a public road, refer to Fuel tax credits correction of credits relating to the road user charge for certain fuel uses in heavy vehicles (QC 26770). Environmental criteria for heavy diesel vehicles manufactured before 1 January 1996 If you use a heavy diesel vehicle on a public road and your vehicle is manufactured before 1 January 1996, you must meet one of the environmental criteria to claim fuel tax credits. If you use farm vehicles mainly on an agricultural property to carry on a primary production business, you do not have to meet any of these criteria. To meet the environmental criteria, you only need to answer yes to one of the following questions about your diesel vehicle: Do you service your vehicle in line with a maintenance schedule endorsed by the Transport Secretary? Have you registered your vehicle in an audited maintenance program accredited by the Transport Secretary? Has your vehicle passed the DT80 test that is, the Australian Transport Council s in-service emission standard for diesel vehicles? Is your vehicle retrofitted with an engine manufactured after 1 January 1996 that meets the Australian emissions standards applying after that date? For more information about the environmental criteria for heavy diesel vehicles, refer to: Fuel tax credit for heavy diesel vehicles: Guidelines for satisfying environmental criteria (DOTARS/050054) at infrastructure.gov.au Environmental criteria for fuel tax credits FAQs (QC 24164). There are time limits for claiming fuel tax credits generally, you must claim within four years from the end of the tax period in which the fuel was acquired. Fuel tax credits for business 13

16 02 eligible activities AGRICULTURE These specified agricultural activities are exempt from the carbon charge. Fuel tax credits for non-transport gaseous fuels used in specified agricultural activities are equal to the carbon charge amount. If your activity is not listed here, you may be eligible for a fuel tax credit under another activity with a different fuel tax credit rate, such as Other off-road activities where the fuel is combusted on page 17. For the rates for specified agricultural activities, see Rates and eligible fuels at a glance on page 6. You need to use the rate that applied when you acquired the fuel. You can claim fuel tax credits for taxable fuel you use in an agricultural activity if the purpose of your business is to obtain produce for sale (or it directly supports such a business), including: cultivating or gathering in crops cultivating the soil rearing livestock 1 viticulture, horticulture, pasturage or apiculture transporting livestock 1 other than on a public road 2 for example, moving for agistment hunting and trapping removing waste from an agricultural activity. The following activities are also eligible if they are carried out on an agricultural property: drilling bores building or maintaining firebreaks fencing frost abatement controlling weeds, pests or disease building or maintaining sheds, pens, silos, silage pits, dams, water tanks, troughs, channels, irrigation systems and drainage systems planting and tending trees not intended for felling constructing earthworks, including dams, levee banks, windbreaks, contour banking and levelling or grading land conserving soil and water milking, shearing and mustering stock breeding animals for working the land, such as draught horses breeding animals for livestock activities, such as stockhorses or working dogs baling hay on the agricultural property where the hay was cut 3 service, maintenance and repairing business vehicles or equipment storing or packing produce preventing produce deterioration disposing of waste from an agricultural activity use of the fuel for a residential premises by the farmer for themselves and other residents of the premises for meeting their domestic requirements. The following activities are also eligible for fuel tax credits at the full rate if they are carried out on, or adjacent to, an agricultural property: pumping and supplying water solely for use in agriculture building or maintaining firebreaks fire fighting. EXAMPLE: Agriculture Siena uses a diesel-powered tractor to cart materials around her vineyard. The fuel she uses for this activity is eligible for fuel tax credits at the rate of cents per litre. Siena also uses a petrol-fuelled ride-on mower and whipper snipper to maintain her vineyard. From 1 July 2008, Siena can claim fuel tax credits at cents per litre for the fuel she uses in this equipment. Because Siena uses fuel for an activity exempt from the carbon charge, she is able to claim the full amount of fuel tax credit and continues to use the rate of cents per litre after 1 July For more information and a comprehensive list of agricultural activities: refer to Fuel Tax Ruling FTR 2012/1 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving agriculture as defined in section of the Fuel Tax Act 2006 at law.ato.gov.au phone us on between 8.00am and 6.00pm, Monday to Friday. 1 For the purposes of fuel tax credits, livestock includes any animal raised to produce food, fibres, skins, fur or feathers or for use in farming the land. 2 Transporting livestock on a public road may be eligible under the road transport activity. 3 If the hay is baled on the agricultural property where it was grown, it does not matter who actually performs the baling. 14 Fuel tax credits for business

17 02 eligible activities FISHING These specified fishing activities are exempt from the carbon charge. Fuel tax credits for non-transport gaseous fuels used in specified fishing activities are equal to the carbon charge amount. If your activity is not listed here, you may be eligible for a fuel tax credit under another activity with a different fuel tax credit rate, such as Other off-road activities where the fuel is combusted on page 17. For the rates for specified fishing activities, see Rates and eligible fuels at a glance on page 6. You need to use the rate that applied when you acquired the fuel. If you are undertaking commercial fishing operations, you can claim for taxable fuel (for example, diesel, petrol or gaseous fuels) you use for any of the following activities, if these activities are not connected with sport, recreation or tourism: taking, catching, capturing of fish 4 processing fish on board vessels fish farming constructing ponds and tanks or other structures to contain fish to be farmed, as long as this is done by the fish farmer or a contractor or subcontractor to the farmer pearling operating a dedicated mother vessel in connection with eligible fishing operations sailing a vessel to or from a port for the purpose of refitting or repairing the vessel or its equipment undertaking trials connected with the repair or refit. EXAMPLE: Fishing Boris is a commercial fisherman and he owns five petroldriven vessels for off-shore fishing. From 1 July 2008, Boris can claim fuel tax credits at cents per litre for the petrol he uses in his fishing business. Because Boris uses fuel for an activity exempt from the carbon charge, he is able to claim the full amount of fuel tax credit and he continues to use the rate of cents per litre after 1 July Boris also uses a petrol-driven forklift to load his fish onto trucks for delivery to the local fish markets. From 1 July 2013, Boris can claim fuel tax credits at cents per litre for the petrol he uses in the forklift. The use of the forklift by Boris is not an exempt activity and the carbon charge applies to the fuel used in his forklift. For more information about the eligibility of fishing activities: refer to Fuel Tax Ruling FTR 2012/3 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving fishing operations as defined in section of the Fuel Tax Act 2006 at law.ato.gov.au phone us on between 8.00am and 6.00pm, Monday to Friday. 4 For the purposes of fuel tax credits, fish means freshwater and saltwater fish, and includes crustaceans, molluscs and any other living resource sourced from the sea, seabed, freshwater or the bed below freshwater. Fuel tax credits for business 15

18 02 eligible activities FORESTRY These specified forestry activities are exempt from the carbon charge. Fuel tax credits for non-transport gaseous fuels used in specified forestry activities are equal to the carbon charge amount. If your activity is not listed here, you may be eligible for a fuel tax credit under another activity with a different fuel tax credit rate, such as Other off-road activities where the fuel is combusted on page 17. For the rates for specified forestry activities, see Rates and eligible fuels at a glance on page 6. You need to use the rate that applied when you acquired the fuel. If you are undertaking commercial forestry operations, you can claim for taxable fuel (for example, diesel, petrol or gaseous fuels) you use for any of the following activities: planting or tending trees in a forest or plantation that is intended for felling felling or thinning trees in a forest or plantation transporting, milling or processing trees in the forest or plantation in which they were felled if the transport is not on a public road transporting timber to a sawmill or chip mill that is outside the forest or plantation but inside Australia if the transport is not on a public road milling timber at a sawmill or chip mill outside the forest or plantation constructing and maintaining roads in a forest or plantation, if the roads are integral to eligible forestry activities this does not include quarrying activities or transporting any materials you use for road building. EXAMPLE: Foresty Forest First Pty Ltd has been claiming fuel tax credits at cents per litre for the diesel they acquired prior to 1 July 2012 for use in machinery constructing forestry roads. Because this activity is exempt from the carbon charge, they continue to use the rate of cents per litre after 1 July Forest First Pty Ltd also use diesel in machinery used for slicing timber into veneer. This activity is not a specified forestry activity. From 1 July 2012, this activity is subject to the carbon charge which will change. Forest First Pty Ltd can claim fuel tax credits at cents per litre for diesel they acquire from 1 July 2013 for use in machinery to slice timber. For more information and a comprehensive list of forestry activities: refer to Fuel Tax Ruling FTR 2012/2 Fuel tax: fuel tax credits for taxable fuel acquired or manufactured in, or imported into, Australia for use in carrying on an enterprise involving forestry as defined in section of the Fuel Tax Act 2006 at law.ato.gov.au phone us on between 8.00am and 6.00pm, Monday to Friday. 16 Fuel tax credits for business

19 02 eligible activities OTHER OFF-ROAD ACTIVITIES WHERE THE FUEL IS COMBUSTED Fuel tax credits for these activities are reduced by an amount of carbon charge relevant to the fuel you use. Carbon charge amounts change annually until 30 June 2015, then six monthly thereafter due to changes in the carbon price. For the latest rates for these activities, refer to Rates and eligible fuels at a glance on page 6. You need to use the rate that applied when you acquired the fuel. If your activity is not listed here, you may be eligible for a fuel tax credit under another activity with a different fuel tax credit rate. Examples of these activities The following are examples of off-road activities that is, activities not undertaken on a public road where the fuel is combusted (Note: it is not a complete list): mining marine and rail transport nursing and medical services burner applications electricity generation by commercial generator plant, stationary generator or a portable generator construction manufacturing wholesale/retail property management landscaping dredging panel beating greenhouse heating in cement kilns quarrying in industrial furnaces. EXAMPLE: Quarrying Michael s Sand Supplies Pty Ltd quarries sand to use in landscaping. He claims fuel tax credits for the diesel he uses in his excavators. From 1 July 2012, this activity is subject to the carbon charge. For diesel acquired from 1 July 2012 to 30 June 2013, Michael can claim cents per litre for this activity which is the full fuel tax credit rate of cents minus the carbon charge for diesel. Michael can claim cents per litre for diesel he acquires from 1 July 2013 to 30 June EXAMPLE: Generating electricity Natalie operates a caravan park and supplies electricity for residents to use. From 1 July 2006, she has been claiming fuel tax credits at the rate of cents per litre for the diesel she uses in her stationary generator. From 1 July 2012 to 30 June 2013, Natalie can claim fuel tax credits at the rate of cents per litre for the diesel acquired and used in her generator. Natalie can claim cents per litre for diesel she acquires from 1 July 2013 to 30 June EXAMPLE: Burner use Pauline operates a foundry and uses diesel to run her furnace. The diesel has had excise duty paid on it. From 1 July 2006, Pauline has been claiming fuel tax credits at the rate of cents per litre. For diesel acquired from 1 July 2012 to 30 June 2013, the fuel tax credit rate is reduced to cents per litre. Pauline can claim cents per litre for diesel she acquires from 1 July 2013 to 30 June Fuel tax credits for business 17

20 02 eligible activities EXAMPLE: Construction Aidan s company is contracted to do some earthworks for the local council on sites. He has been claiming fuel tax credits for the petrol he uses in his bobcat and his compactor. For petrol acquired from 1 July 2012 to 30 June 2013, Aidan can claim cents per litre for this activity. Aidan can claim cents per litre for the petrol he acquires from 1 July 2013 to 30 June EXAMPLE: Manufacturing Wesley operates a diesel forklift to move materials and products around his steel fabrication workshop. He has been claiming fuel tax credits for the diesel he uses in his forklift. For diesel acquired from 1 July 2013 to 30 June 2014, Wesley can claim cents per litre for this activity. EXAMPLE: Landscaping Anne-Maree owns a landscaping franchise. She has been claiming fuel tax credits for the petrol she uses in her brush-cutter and in her ride-on lawnmower. For petrol acquired from 1 July 2013 to 30 June 2014, Anne-Maree can claim cents per litre for this activity. EXAMPLE: Property management Kylie has a property management business and maintains a number of rental properties. She has been claiming fuel tax credits for the petrol she uses in her lawnmower, blower-vac and other equipment. For petrol acquired from 1 July 2013 to 30 June 2014, Kylie can claim cents per litre for this activity. NON-COMBUSTIBLE USE Fuel tax credit rates for these non-combustible activities are not reduced by the carbon charge. For the latest rates for non-combustible activities, refer to Rates and eligible fuels at a glance on page 6. You need to use the rate that applied when you acquired the fuel. If your activity is not listed here, or you use fuel in an activity where the fuel is combusted that is, in an internal combustion engine or burnt you may be eligible under another activity with a different rate. You can claim fuel tax credits for taxable fuel you use for a non-combustible use in your business for example, diesel, heating oil, kerosene, fuel oil, toluene, mineral turpentine, white spirit, duty paid LPG, LNG or CNG. Non-combustible use means using fuel in a way that does not ignite or burn the fuel for example: fuel you use directly in a non-fuel manner that is, it is not combusted fuel you use as an input or ingredient in the manufacture of products that are not intended for combustion. Fuel tax credits for non-transport gaseous fuel used in a non-combustible activity such as LPG used as a propellant in the manufacture of aerosols depend on when the fuel was acquired. If you acquired the fuel: in the period 1 July 2012 to 30 June 2013 you can claim fuel tax credits at a rate equal to the carbon charge amount from 1 July 2013 you cannot claim fuel tax credits for the fuel as no excise duty has been paid on the fuel from this date. However, if the non-combustible activity is a specified agriculture, fishing and forestry activity, you are entitled to a fuel tax credit at a rate equal to the carbon charge amount. 18 Fuel tax credits for business