Fuel tax credits – what is it and how can I claim for it

When ever you purchase fuel – part of the cost to you is the taxes – excise or customs duty levied on that fuel.

Fuel Tax Credits give businesses a credit for the fuel tax that is included in the fuel used in machinery, plant & equipment, heavy vehicles, and light vehicles travelling off public roads or on private roads.

You can register for it and once you do it will be extra labels on your business activity statement.

To see the guide on the Australian Taxation Office website consult: Fuel tax credits – business.

What can I claim on?

  • heavy vehicles
  • light vehicles travelling off public roads or on private roads.
  • equipment
  • plant
  • machinery

The rate itself gets changed a few times a year – so be careful to check the ATO website so you are claiming the correct rate for the correct period. You can see that here: Rates – business.

The rates are different for different kinds of fuels.

  • Liquid fuels like petrol or diesel.
  • Blended fuels like B5, B20
  • Liquefied petroleum gas (LPG)
  • Liquefied natural gas (LNG)
  • compressed natural gas (CNG)
  • B100

But on top of that, the rate is different depending on what you are using the fuel for. For example (at the moment); it’s 16.9 cents per litre for a heavy vehicle travelling on a public road. But it’s 43.3 cents per litre for most other business uses (like powering auxiliary equipment). So make sure you are using the right rate, for the right fuel for the relevant use.

The other thing you should be aware of is that what you are using the fuel for affects if you can claim. But that has changed over time. For example, you can claim for fuel used to power passenger air-conditioning on buses and coaches. But not if it was from before November 2019.

So how much you actually get is dependent on when you purchased the fuel, what kind of fuel it is and what you are actually using the fuel for and (possibly) the dates you used the fuel.

Fuel tax credits rates are changed all the time – so you need to double check the rates every time you do your business activity statement (BAS).

You can’t claim it for light vehicles of 4.5 tonnes gross vehicle mass (GVM) or less, that are used on public roads.

Calculating quantities and eligibility and actually claiming – can be hard work and there are four ways to do it. Picking which one can be tricky because the right one for you really depends on your industry and circumstances. I would recommend consulting with your tax agent or accountant for help.

There is a there is a guide on the ATO website: Calculating eligible fuel quantities.

As a general rule, If you claim less than $10,000 in fuel tax credits per year, the easiest and safest way to get your claims right is to use the simplified methods outlined in the guide above.

Just in passing, you can claim for fuel used for purposes other than in an internal combustion engine. For example as a burner fuel, as a solvent, if its an ingredient in something else and some other circumstances too. You can read about this here: Fuel not used in an internal combustion engine.

There are separate arrangements for bunker fuel and commercial shipping in general. You can read about this here: Bunker fuel and commercial shipping.

Just so you know, private individuals can also (in some circumstances) claim for this too. For further information go here: Fuel tax credits – non-business.

Can we keep it simple? (please!)

Go to: Fuel tax credits calculation worksheet. For a (fairly) straight forward guide to calculating claims.

You will make mistakes when you claim. An easy way to tell you that it must happen often is that the there is a special page on the ATO website just for that: Making adjustments and correcting errors.

My advice would be to consult with your tax agent or accountant and get them to register you and set everything up for you.

If you would like some advice on all of this, please call us on

1300 268 800