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Tax definition
Pursuant to the Yukon Fuel Oil Tax Act Regulations, motor carriers with a fuel capacity greater than 230 litres must pay fuel consumption tax. Fuel tax may be filed quarterly or by prepaid single trip permit.
If applying as a permanent fuel oil user, application may be made to the Department of Finance for a permanent fuel oil user permit on F.O.T. Application 3. The application must be accompanied by a bond of no less than $300 (cash or surety). Bonds are refundable on voluntary cancellation and interest is paid on cash bonds at December 31 of each year. Once the application and bond are received, the Department of Finance issues a permit number to the individual or company. Then, when one of the company’s registered unit reaches a Yukon weigh station, the driver gives the permit number to the weigh station operator and the driver is in turn given fuel emblems (stickers) for the vent windows. This identifies the carrier as a permanent permit holder and the carrier will not be required to purchase single trip permits. Fuel emblems are valid from April 1 to March 31 of the following year. Permanent Fuel Oil User Permits must be cancelled by written notice to the Department of Finance.
Where a carrier does not hold a permanent permit, the carrier will be required by the weigh station operator to purchase a single trip permit.
Taxable vehicles
All carriers operating vehicles in the Yukon Territory must register each vehicle regardless of fuel type used. There are no exceptions for vehicles in different weight groups.
Fuel tax rates
The Yukon government imposes a fuel tax rate of $.072 per litre on diesel fuel, and $.062 per litre for gasoline purchases.The Canadian federal government charges both a sales and an excise tax on each litre of diesel and gasoline fuel purchased. The tax rates charged by the Canadian federal government in the territory, are the same as in the lower provinces.
Source documents required
Trip report requirements
All fuel oil user permit holders, must maintain records to substantiate information reported on the quarterly fuel tax returns. Records must include kilometres and/or miles travelled in the Yukon and all other provinces, territories, or states, plus receipts or invoices for all fuel purchased in the Yukon and any other jurisdictions. Fuel receipt invoices are required to backup all purchases as noted on the individual driver’s trip sheet.
Fuel receipt requirements
As part of each individual vehicle trip record, all listed fuel purchases must be backed up by a fuel purchase invoice. Each receipt should show both the seller’s and the purchaser’s name and address, the date of sale, the type and number of litres purchased, and the purchase price of the fuel with the amount of tax paid shown separately. Also, the invoice should show which vehicle the fuel was pumped into, either by listing the vehicle’s fleet number, licence number, or ID number.
While it is not necessary to send in the original fuel receipts with the tax returns (photocopies are sufficient), the originals must be retained by carrier for audit purposes.
Record retention requirements
All registered fuel user permit holders must retain all operating records for a period of 7 years from the date the return was filed. Records should include all information to substantiate information as listed on the quarterly fuel tax returns.
Reporting procedures
Forms used
Upon issuance of a fuel user permit, each permit holder will receive a yearly supply of the required tax report forms — F.O.T.C. Quarterly Return of Fuel Oil Users Imported into Yukon in the Fuel System of a Vehicle, and F.O.T. Schedule C-1. All vehicles that travelled in the Yukon must be reported, with all kilometres listed on the Schedule C-1 by unit and by jurisdiction. A separate return is required for each fuel type being reported.
Filing period
Every holder of a valid and subsisting fuel oil user permit must file a quarterly tax return together with Schedule C-1 and copies of fuel purchase invoices. Refunds are to be received by the Department of Finance on or before the 25th of the month following the end of the quarter (e.g., first quarter returns are due April 25). Should a permit holder fail to file returns on due dates as required by the Fuel Tax Act, or fail to pay any tax liability he has incurred, the Commissioner may assess a penalty equal to 10% of the amount due, and may assess interest on the amount due at 10% per annum.
Kilometres per litre computation
When filing the quarterly Yukon fuel tax return, all information pertaining to fuel or distances must be reported in litres or kilometres. The standard conversion factors used are as follows:
| 1 Imperial Gallon | = 4.54609 Litres (L) |
| 1 U.S. Gallon | = 3.785 Litres (L) |
| 1 Mile | = 1.6093 Kilometres (km) |
To determine the average kilometres per litre for tax reporting purposes, the carrier must divide the total litres of fuel purchased in all jurisdictions into the total kilometres travelled in all jurisdictions, using totals only on those vehicles registered in the Yukon (carried to four decimal places).
Tax refunds or credits
All registered permit holders are allowed to accumulate credits on their quarterly tax returns, until the end of December. Carriers with a credit balance at the end of the year may apply for a refund. Applications for refund pursuant to the Tax Act, may not be made until December 31 each year, or until the refundable credit reaches 5,000 litres, whichever is the earlier. Refunds processed are subject to audit and may be adjusted at time of application, or in accordance with the audit.
How to pay taxes
Payment of any tax liability due, must be made in Canadian funds, and can be made either by company cheque or a bank/postal money order.