PCG 2016/2: Fuel tax credits - practical compliance methods for small claimants
Document type: Final PCG
Status: Current
Date of issue: 22 March 2016
Date of effect: 31 March 2016

1. In meeting their fuel tax credit obligations an entity must: 2. Currently, these requirements can result in significant compliance costs and administrative burdens for small claimants that are disproportionate to their fuel tax credit claims. To alleviate some of these costs and burdens, this Guideline provides some acceptable, practical compliance methods to assist small claimants in meeting their obligations.

Scope: 4. This Guideline applies: 5. The criteria in the paragraph above determine who is a 'small claimant' for the purpose of applying the compliance methods outlined in this Guideline. The Commissioner accepts that, due to unforeseen fluctuations or changes in business activity, an entity may in fact exceed the $10,000 entitlement in the current 12 month period. Some discretion and flexibility will be applied to determine whether the circumstances resulting in an excess over $10,000 are consistent with the reasonable expectation described in the paragraph above. 6. This Guideline does not apply where the disentitlement rules of Subdivision 41-B of the Fuel Tax Act 2006 apply to the taxable fuel and, in particular, to taxable fuel acquired for use in a vehicle with a gross vehicle mass of 4.5 tonnes or less travelling on a public road. What are the accepted methods? 7. The accepted methods set out: 8. A small claimant entity may choose to use any or all of the methods. Method 1: working out litres of taxable fuel acquired in the tax period 9. Method 1 allows a small claimant to work out the number of litres of fuel acquired using the following formula: 10. This method is relevant in the circumstances of commercially available accounting software that only accepts dollar values in respect of fuel acquisitions (for example, MYOB, Xero, Cashflow Manager, QuickBooks) and fuel acquisition records that display dollar amounts and do not display the quantity of fuel dispensed. Method 2: determining the day on which all taxable fuel is taken to be acquired 11. 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. 12. The fuel tax credit rate for all the taxable fuel acquired during the tax period will then be the one rate. 13. If the small claimant entity uses the 'Fuel tax credit calculator' it will be accepted that 1 litre of the total taxable fuel acquired in the tax period was acquired on the first day of the tax period and the remaining taxable fuel was acquired at the end of the tax period. Method 3: records substantiating fuel tax credit entitlements 14. It will be accepted that a small claimant has met their record-keeping requirements to substantiate fuel tax credit entitlements where they can provide documentation of a kind mentioned in the relevant item in the Substantiation Table - accepted records. 15. For entities that have not claimed fuel tax credits in previous years, the entity must reasonably demonstrate that the quantity of taxable fuel for which fuel tax credits are claimed would be used in carrying on their enterprise and is consistent with the pattern of fuel use in subsequent tax periods.





Fuel tax credits - practical compliance methods for small claimants: 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 | Which entities are covered by this Guideline? | Date of effect: 3. For the approaches covered by Method 1 and Method 2, this Guideline applies to tax periods ending on or after 31 March 2016. For the approach covered by Method 3, this Guideline applies to tax periods commencing both before and after the date of issue of this Guideline. | Litres = Total $ / Average GST inclusive price of fuel | Total $ means the total dollar spend on taxable fuel during the relevant tax period. | Commissioner of Taxation 22 March 2016 | Record relied on when claiming a FTC in the tax period | Conditions for use of document | Where an amount for fuel used in the performance of services is deducted from the amount payable for the services. | Where only the dollar amount is displayed on the statement

Legislative references: Fuel Tax Act 2006 Fuel Tax Act 2006 41-5 Fuel Tax Act 2006 Subdiv 41-B