Practical Compliance Guideline

PCG 2019/2

Fuel tax credits - practical compliance methods for farmers in disaster affected areas

Table of Contents Paragraph
What this Guideline is about
Date of effect
Which entities are covered by this Guideline?
What are the accepted methods?
Method 1 - working out litres of taxable fuel acquired in the tax period
Method 2 - determining the day on which all taxable fuel is taken to be acquired
Appendix 1
Tax periods and postcodes applicable
Affected ANZSIC codes

Relying on this Guideline

This Practical Compliance Guideline sets out a practical administration approach to assist taxpayers in complying with relevant tax laws. Provided you follow this Guideline in good faith, the Commissioner will administer the law in accordance with this approach.

What this Guideline is about

1. In meeting their fuel tax credit obligations an entity must:

·
calculate the number of litres of taxable fuel they acquired in the tax period, and
·
identify the rate of the fuel tax credit in force on the day the taxable fuel was acquired.

2. These requirements can result in an additional compliance burden for entities in the agricultural industry when affected by natural disasters. To alleviate some of the burden, this Guideline provides some acceptable, practical compliance methods to assist these claimants in meeting their obligations.

Date of effect

3. This Guideline applies to tax periods for which an activity statement lodgment and payment deferral has been granted due to a natural disaster.

Which entities are covered by this Guideline?

4. This Guideline applies to an entity that has:

(a)
Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC) codes representing that entity's business operations in a postcode for which an activity statement lodgment and payment deferral has been granted due to a natural disaster (refer to Appendix 1 of this Guideline), and
(b)
an entitlement to fuel tax credits for taxable fuels acquired for use in carrying on an enterprise under section 41 5 of the Fuel Tax Act 2006 (FTA).

5. The criteria in paragraph 4(a) of this Guideline determines who is an 'affected claimant' for the purposes of applying the compliance methods outlined in this Guideline.

6. This Guideline does not apply where the disentitlement rules of Subdivision 41 B of the FTA apply to the taxable fuels and, in particular, to taxable fuel acquired for use:

·
in a vehicle with a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road, or
·
where the environmental criteria have not been met in a diesel vehicle used on a public road with a GVM greater than 4.5 tonnes that is not used primarily on an agricultural property in carrying on a primary production business.

What are the accepted methods?

7. The accepted methods set out:

·
how an entity can work out litres of taxable fuel acquired in the tax period, or
·
The day on which all taxable fuel is taken to be acquired in the tax period.

8. An affected claimant entity may choose to use one or both of these methods.

Method 1 - working out litres of taxable fuel acquired in the tax period

9. This method allows an affected claimant entity to work out the number of litres of fuel acquired using the following formula:

Litres acquired in the tax period = Total $ / Average GST-inclusive price of fuel


Total $ means the total dollar spend on taxable fuel during the tax period.

Average GST-inclusive price of fuel for the tax period is the average fuel price for the relevant fuel type in your area of operation as shown on the Australian Institute of Petroleum (State and National prices) website (aip.com.au/pricing/pump-prices)

Method 2 - determining the day on which all taxable fuel is taken to be acquired in the tax period

10. Where there is a change in the rate of fuel tax credit in a tax period because of indexation, it will be accepted that all the fuel was acquired on the last day of the tax period.

11. The fuel tax credit rate for all the taxable fuel acquired during the tax period in Appendix 1 of this Guideline will then be the one rate.[1]

Commissioner of Taxation
22 March 2019

Appendix 1

Tax periods and postcodes applicable

12. For all taxable fuel acquired for use in carrying on your enterprise in an affected postcode during the tax periods, see the lodgment and payment deferral information for natural disasters.

13. The affected claimant entities are involved in cultivation or gathering in of horticulture, grains and crops and also the breeding and rearing of livestock and other farm animals. The affected ANZSIC codes are Subdivision A - 01 Agriculture (codes 011 to 019) listed below.

Code Description
011 Nursery and Floriculture Production
012 Mushroom and Vegetable Growing
013 Fruit and Tree Nut Growing
014 Sheep, Beef Cattle and Grain Farming
015 Other Crop Growing, for example sugar cane, cotton
016 Dairy Cattle Farming
017 Poultry Farming
018 Deer Farming
019 Other Livestock Farming, for example horse, pig, beekeeping

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

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).


If the affected claimant entity uses the Fuel tax credit calculator simply total the eligible litres for the period and use the rate that is current on the last day of the activity statement period to work out the claim.

Not previously issued as a draft

ATO references: File 1-HDLK39I
ISSN: 2209-1297

Business Line:  ITX

Legislative References:
FTA 2006
FTA 2006 41-5
FTA 2006 SDiv 41-B
FTA 2006 Div 65

Other References:
aip.com.au/pricing/pump prices
Fuel tax credit calculator