Update on fuel tax entitlements

ATO adds guidance and clarifies explanations regarding fuel taxes

The Australian Taxation Office (ATO) has updated or added to its guidance on fuel tax credit entitlements on a number of points related to recent high-profile industry issues.

These are for the handling of fuel used to power auxiliary equipment, such as bin lifting equipment, for fuel used in idling and truck cabin air conditioning, and for toll roads.

The practical compliance guideline, Fuel tax credits - apportioning taxable fuel used in a heavy vehicle with auxiliary equipment PCG 2016/11, replaces PSLA 2013/4 (GA).

"There are percentages you can apply so you won't need to do complex calculations or sample testing when you work out your claims," the ATO says. 

The ATO has released a new fuel tax determination, Fuel tax: fuel tax credits - fuel used for idling and cabin air-conditioning of a vehicle on a public road FTD 2016/1.

This explains that the fuel tax credit rate is reduced by the road user charge for fuel used in a heavy vehicle for idling on a public road and powering the air-conditioning unit of a main cabin when travelling on a public road.

The ATO has also clarified the explanation of a 'public road' in fuel tax ruling, Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge FTR 2008/1.

As far as it is concerned, a public road "is a road available for use by members of the public".

"For fuel used in heavy vehicles travelling on toll roads, bus lanes and busways, use the 'heavy vehicle for travelling on public roads' rate," the ATO says.

"You can continue to use the ‘all other business uses’ rate for fuel used for travelling on forestry, mining access and agricultural property roads as these are examples of roads that are not considered ‘public’.

"If you have not used the correct rate when calculating your fuel tax credits you will need to amend your BAS."

However, that position is to be tested if financial services firm Deloitte goes through with a challenge flagged in June.

The full update can be found here.

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