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Fuel tax credits are amounts you can claim for the fuel tax included in the price of fuel you acquire and use for your business activities.
You can refer to the ATO’s fuel tax credits eligibility tool to find out if you are eligible to claim. If you are, you'll need to find out the rate you can claim. The rates vary depending on the fuel you use and your business activities.
Your business must be registered for both fuel tax credits and GST before you can claim fuel tax credits. For more information, see the ATO website.
If your business receives fuel tax credits for fuel on machinery, equipment or heavy vehicles, it's easy to record the amount using a journal entry.
The journal entry would involve two accounts:
- A 4-XXXX or 8-XXXX Income account which would be credited. This increases income which amounts to decreasing expense.
- A choice of a 2-XXXX Liability account or 1-XXXX Asset account which would be debited.
If you want to keep your tax credit account grouped with your other tax liability accounts, such as GST collected and paid, choose a liability account. For information on creating accounts, see Setting up accounts.
Need to change your fuel tax credit journal entry? See Changing or deleting a transaction.
Fuel tax credits FAQs
How do I determine the amount of fuel tax credit I'm eligible to claim?
To determine the amount of fuel tax credit you are eligible to claim for a given BAS period, you can perform a Find transaction on the account - located at the bottom of any command centre.
The credit amount would normally be the net change in the account over your specified period.
What BAS fields are used for fuel tax credits?
The following BAS fields are used for fuel tax credits:
- 7C (Fuel tax credit over claim) - This field is used to record fuel tax credits that may have been over-reported in previous periods
- 7D - (Fuel tax credit) - This field is used to claim fuel tax credits
If you prepare your activity statements manually using BASlink, you'll need to activate these fields by selecting the option I Claim Fuel Tax Credits in the BAS Information window.
To automatically complete the fields in BASlink, all you need to do is link the fields to your applicable accounts.
If you prepare your activity statements online, you'll need to manually add values to the 7C and 7D activity statement fields.