Fuel tax credits for business

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 that:

• is not eligible because it was used in an ineligible activity - for example, in a vehicle of 4.5 tonne GVM or less travelling on a public road
• is not eligible because it is a gaseous fuel that was duty paid at the lower non-transport rate for LPG and LNG, and exempt non-transport CNG or where the fuel tax credits have already been claimed earlier in the supply chain
• you acquired but did not use 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 credit entitlement. The rates are: 1 kilogram of LPG = 1.885 litres of LPG 1 megajoule of CNG = 0.01893 kilograms 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.

For more information about working out eligible quantities of fuel and the various calculation methods and measures, refer to Fuel tax credits - keeping records and calculating eligible quantities (NAT 15230).

Sections within Working out your fuel tax credits

• Records you must keep
• Tax invoices
• Step 1: Work out the eligible quantity
• Step 2: Check the fuel tax credit rate for each taxable fuel type and activity
• Step 3: Work out the fuel tax credit amount