Australia

Details

  • Service: Tax, Indirect Tax
  • Type: Regulatory update
  • Date: 20/08/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Keith Polkinghorne

Keith Polkinghorne
Partner, Tax

+61 7 3233 3157

kpolkinghorn@kpmg.com.au

Fuel tax credit rate changes: Are you short-changing yourself? 

by Keith Polkinghorne, Indirect Tax Specialist

As we are fast approaching the deadline to lodge the July 2013 business activity statement, many clients will have already made the necessary system changes to reflect the new fuel tax credit (FTC) rates. With limited exceptions, these new rates will be lower than the pre-June 2013 rates due to increases in the road user charge and carbon price.

However, are your calculations really reflective of your FTC entitlements? Our experience is that most clients claim FTCs in the period when they use the fuel rather than when they purchase the fuel. What can get easily overlooked with a use-based method is the need to ensure that FTCs are calculated using the rate that existed at the time of purchase and not when the fuel is used - this is obviously an issue for fuel which remains on hand as at 30 June and which is used in the new financial year.

 

Failing to adequately cater for rate changes can result in you missing out on FTCs to which you are entitled. While shifting to a purchase-based method may assist in resolving this issue and result in a cash-flow benefit, there are disadvantages and complexities with such a method, particularly if you use fuel for a variety of purposes.

 

We would be happy to help any clients seeking strategies to maximise their FTC claims.

 

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