Fuel tax credit changes in July

From 1 July 2013, businesses may be affected by rate changes to fuel tax credits as a result of increased carbon charge amounts or changes to fuel used in heavy vehicle travel.

Currently, fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the price of fuel used for business activities such as machinery, plant, equipment or heavy vehicles. Tax credits can only be claimed for liquid fuels (diesel, petrol) and gaseous fuels (LPG).

According to the ATO, the changes mean that fuel tax credit rates for non-transport gaseous fuels used in agriculture, fishing or forestry sectors will increase as the rate is equivalent to the carbon charge amount. Carbon charge amounts will increase annually, reducing fuel tax credit rates until 30 June 2015 whereupon the rate will be adjusted every six months.

The tax credit rates for transport gaseous fuels used in heavy vehicles will also increase due to an annual rise in excise duty. Transport gaseous fuel used in other eligible non-transport business activities are also entitled to fuel tax credit claims.
 For heavy vehicles using fuel for travelling on a public road, the tax credit rate will be reduced by the road user charge. Credits for transport gaseous fuels will be reduced to nil.

For more information, visit the ATO website.

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