Do you operate a sideloader or a vehicle that uses fuel to
power a refrigeration unit or other equipment? You may be entitled
to more fuel tax credits than you think.
Fuel tax credits and road user charges
The 'fuel tax credit' (FTC) is generally 38.9 cents per
litre. However, to the extent that you acquire, manufacture or
import taxable fuel to use in a heavy vehicle, for travelling on a
public road, your FTC is reduced by the 'road user charge'
(RUC) (26.14 cents per litre). The result of the RUC applying is
that you are only entitled to a partial FTC of 12.76 cents per
litre in respect of that fuel.
In Linfox Australia Pty Ltd v Commissioner of Taxation
 AATA 517 the Administrative Appeals Tribunal considered the
meaning of 'fuel to use, in a vehicle, for travelling on a
The case restricted the meaning of the phrase, and under the
more restrictive interpretation, less fuel may be subject to the
RUC, resulting in greater entitlements to fuel tax credits.
Meaning of 'fuel to use, in a vehicle, for travelling on a
Linfox used refrigerated trailers to transport perishable goods
that were required to be kept at specified temperatures. The fuel
used to power the refrigeration units was kept in a separate tank
to the fuel that was supplied to the engine of the vehicle. The
Tribunal held that despite the fact that the trailer carrying the
refrigeration unit was travelling on the road, the fuel used to
power it was not used 'for travelling on a public
The Commissioner acknowledged in his Decision Impact Statement
that the Tribunal's reasoning revised the position for fuel
used to power auxiliary equipment not connected with travelling on
the public road. The Commissioner's position is as follows.
This revision will impact the heavy
trucking, cement manufacturing, and coach and bus industries ...
Specifically, fuel used to operate any apparatus or piece of
machinery on a vehicle that is not for the purpose of travelling is
no longer considered to be 'fuel used in a vehicle, for
travelling'. Some examples of machinery of this nature are the
hydraulic arm lift of a garbage collection vehicle, the mixing bowl
of a cement truck, the refrigeration unit on a perishables
transportation truck and air-conditioning units of commercial buses
This analysis would extend to sideloaders and other heavy
vehicles using fuel to power equipment not used for travelling. The
Commissioner's position suggests that he will accept the RUC
does not apply to the fuel used to power and operate the
sideloader's lifting arms since the arms are auxiliary
What happens if all of the fuel is in the same tank?
The Commissioner acknowledges that the RUC is only imposed to
the extent that the fuel is used for travelling on a public road.
This is the case regardless of whether the fuel is kept in
different tanks, like in Linfox, or in the same tank.
Where fuel is kept in the same tank, a 'fair and
reasonable' apportionment must be made.
Beware: time limits
There are strict time limits on claiming unclaimed FTC. You
cannot claim a FTC after four years from the day on which you were
required to give the Commissioner a tax return to which the FTC is
Need help agreeing an apportionment with the ATO?
Our team can help negotiate an apportionment that the ATO will
consider 'fair and reasonable' in the circumstances.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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