• Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/27/2013

Australia - Opportunities for business taxpayers with fuel tax credit 

August 27:  Taxpayers need to determine that their systems have been changed to reflect the new fuel tax credit rates. With limited exceptions, the new rates are lower than the pre-June 2013 rates because of increases in the road user charge and carbon price.

Business taxpayers also need to examine whether their calculations properly reflect their fuel tax credit entitlements. Many taxpayers claim fuel tax credits in the period when they use the fuel—rather than when they purchase the fuel.

What can be easily overlooked with a use-based method is when taxpayers calculate the fuel tax credit using the rate that existed at the time of purchase—and not when the fuel is used.

Shifting to a purchase-based method may assist in resolving this issue and result in a cash-flow benefit; however, there can be disadvantages and complexities with such a method, particularly if fuel is used for a variety of purposes.

Read an August 2013 report prepared by the KPMG member firm in Australia: Fuel tax credit rate changes: Are you short-changing yourself?

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