Farmers can claim fuel tax credits for fuel used in the business, at the full off-road rate for tractors, harvesters, pumps and machinery working the property. You claim through your BAS, which means you need an ABN and GST registration. Rates are indexed twice a year, so always check the ATO’s current rate table before lodging.
Fuel is one of the biggest line items on any farm, and a slice of every litre is tax you may be entitled to claim back. Here’s how fuel tax credits work for primary producers, what the off-road rate covers, and the on-road ute trap that catches people out.
What are Fuel Tax Credits?
Fuel Tax Credits (FTC) provide a credit for the fuel tax you’ve already paid when the fuel is used in eligible business activities such as agriculture, forestry, fishing or construction.
They apply to both petrol and diesel, and the rate depends on how the fuel is used. In short. If your fuel isn’t being used for normal road travel, you can usually claim back part (or all) of the tax paid.
Example: A Queensland grain farmer uses petrol and diesel to power tractors, harvesters, irrigation pumps and generators.
These off-road uses are fully eligible for Fuel Tax Credits, helping reduce overall operating costs.
Why the system exists
The government recognises that businesses like farms, construction and transport use fuel in ways that don’t always involve public roads. Because that fuel doesn’t contribute to road wear, it shouldn’t be taxed as if it does.
Fuel Tax Credits refund that road-use component of the excise, ensuring a fairer system for Australian primary producers.
Who is eligible?
You may be eligible to claim Fuel Tax Credits if you use petrol or diesel for:
- Farming, forestry or fishing operations
- Agricultural machinery such as tractors, harvesters or quad bikes
- Irrigation pumps, generators or stationary engines
- Heavy vehicles (over 4.5 tonnes GVM) used on or off public roads
- Other off-road plant or machinery such as loaders or excavators
Example: John, a dairy farmer in Victoria, uses diesel and petrol for both irrigation equipment and heavy machinery.
By registering for Fuel Tax Credits, he becomes eligible to claim credits through his BAS, saving thousands each year.
Managing fuel tax claims is easier when your business expenses are tracked automatically. Thriday helps farmers and contractors automatically categorise business fuel expenses, saving hours at tax time.
How much can you claim?
The FTC rate varies depending on fuel type and use, and is updated quarterly by the ATO.
| Fuel use | Eligible? | Rate |
|---|---|---|
| Off-road farm equipment (tractors, pumps, generators, harvesters) | Eligible | Full FTC rate |
| Heavy vehicles operating off public roads | Eligible | Full FTC rate |
| Heavy vehicles on public roads (over 4.5t GVM) | Eligible | Reduced FTC rate |
| Light vehicles on public roads | Not eligible | Normal fuel tax applies |
How to register for Fuel Tax Credits
You’ll need to register for Fuel Tax Credits before you can claim them. Here’s how:
- Visit fueltaxassist.com.au to get started.
- Our team will help you register for Fuel Tax Credits with the ATO under your ABN.
- Once registered, you (or your accountant/bookkeeper) can include FTC claims in your Business Activity Statement (BAS).
Note: Fuel Tax Assist helps with registration only. We don’t calculate or lodge claims on your behalf.
Common Questions
Can hobby farmers claim Fuel Tax Credits?
No, only businesses carrying out genuine farming, forestry or fishing operations are eligible.
Do I need an ABN?
Yes. You must have an active ABN to register for Fuel Tax Credits.
How often can I claim?
Most businesses claim quarterly via their BAS, though monthly claims are also possible.
What records do I need?
You’ll need tax invoices, fuel receipts, usage logs and equipment records to support your claim if audited by the ATO.
Key benefits for farmers
- Reduce costs: Claim back thousands in fuel tax each year.
- Fairness: Avoid paying road-use tax on off-road and agricultural fuel.
- Broad eligibility: Covers both petrol and diesel used in farming machinery.
- Cash-flow improvement: Credits offset GST or other tax obligations.
Fuel Tax Assist: we make registration easy
At Fuel Tax Assist, we help Australian farmers and rural businesses register for Fuel Tax Credits quickly and correctly. We:
- Manage your ATO registration from start to finish
- Ensure you’re set up correctly to claim through your BAS
- Keep your registration compliant with ATO requirements.
Quick answers
Do fuel tax credits cover petrol as well as diesel?
Yes, both petrol and diesel (and some blends) are eligible when used in business activities. The old “diesel rebate” name persists, but the scheme is fuel tax credits and it isn’t diesel-only.
Can I claim for the farm ute on public roads?
Generally no, fuel used in vehicles of 4.5 tonnes GVM or under travelling on public roads attracts no credit. The same ute working off-road on the property does qualify, which is why apportioning between on-road and off-road use matters.
How far back can I claim fuel tax credits I missed?
Generally up to four years from the end of the BAS period in which the fuel was acquired. If you’ve been under-claiming, common with mixed on-farm/off-farm use, a catch-up claim is often worth real money.
Related guides: Do I need an ABN as a sole trader? · How to apply for an ABN online · Talk to us about GST registration
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