All petrol sold in New Zealand has an excise duty tax applied to it. This tax is for the creation and maintenance of the country’s roading infrastructure. If a business operates petrol powered vehicles or machinery off-road, then they are eligible to have the excise duty refunded.

Excise duty, as at January 2020, is $0.83 per litre including GST ($0.73 per litre GST exclusive) and the excise duty also applies to off-road use of LPG and CNG. Excise duty does not apply to diesel which is instead subject to road user charges based on mileage.

Road user charges can also be refunded when vehicles are used off-road (see www.nzta. govt.nz for details), but there is additional compliance required to calculate the onroad versus off-road use.

Farmers are entitled to claim a rebate on petrol used in the following types of vehicles or machinery: 

• Farm bikes, quads and side by sides
• Petrol tractors
• Chainsaws
• Brush cutters
• Stationary motors and generators
• Specially licensed vehicles or utes used on farm, but sometimes used for short distance travelling between farms

The key point is that the eligibility to claim excise duty refunds is that it is an on-road versus off-road test. It is not the business use versus private use test that we use for income tax or GST. At $0.83 a litre (GST inclusive) the petrol rebate is worth claiming. Based on a $2.15/litre for 91 octane petrol, the refund equates to 39% of the fuel price.

Farm bikes, particularly quads and side by sides, use a lot of petrol. The latest Honda side by sides have 30 litre petrol tanks, while Can-Am models have 40 litre tanks. This equates to a fuel excise claim (GST inclusive) of $24.90 for the Honda and $33.20 for the Can-Am every time they are filled up. Many farmers easily use several thousand litres a year, and this increases with more staff using bigger farm bikes or side by sides.

A $0.83 per litre rebate over 2,000 litres generates a $1,660 rebate – this is not a bad reward for minimal paperwork and quarterly claims.