News and Insights

British Columbia Revises Two Bulletins Related to Motor Fuel Tax Refunds

Tax Development Feb 04, 2013

British Columbia Bulletin MFT 002, “Motor Fuel Tax Refunds for Purchasers” and Bulletin MFT 009, “International Air Cargo – Fuel Tax Refund” were revised in January 2013, with updated information on the available refunds of Motor Fuel Tax.

Purchasers of motor fuel are required to pay Motor Fuel Tax (“MFT”) on fuel purchased in British Columbia (“BC”), unless an exemption exists under the Motor Fuel Tax Act.  Bulletin MFT 002 outlines the scenarios and types of purchasers eligible for a refund of the MFT.  Applicable scenarios include:

  • MFT paid in error;
  • MFT overpaid;
  • MFT paid, but person now qualifies for a refund; and
  • MFT paid, but use of the fuel now qualifies for a refund.

The following persons and use of fuel may qualify for a refund:

  • persons with disabilities;
  • used in private passenger diesel vehicles;
  • used in logging and mining industries;
  • used in the oil and gas industry;
  • used for international cargo flights;
  • Motive Fuel User Permit for International Fuel Tax Agreement Commercial Vehicles;
  • farmers;
  • used in stationary engines;
  • Status Indians and Indian Bands;
  • Nisga’a government bodies;
  • Tsawwassen First Nation government bodies; and
  • visiting forces or members of the Diplomatic and Consular Corps.

A prescribed application form must be submitted, together with supporting documentation, within four years of the date that the tax was paid.

BC Bulletin MFT 002

The second revised bulletin relates specifically to the refund of MFT available to purchasers who use  jet fuel for international air cargo flights.  The bulletin explains the differences in eligibility for the refund before and after April 1, 2012.  Eligibility criteria that remain the same include the following:

  • the company must have held a licence issued by the Canadian Transportation Agency for the period of the claim and, if required by Transport Canada, an operating certificate authorizing the operation of an international commercial air services or cargo freight air service for the aircraft using the jet fuel that was purchased; and
  • the aircraft must have carried either paid cargo only or paid cargo and fare-paying passengers on a scheduled or chartered international flight.

Effective April 1, 2012, the criteria was expanded in two ways.  Firstly, international air services that offer flights to members of the public for a fee are included in the type of flights eligible for a refund of the MFT on the jet fuel used.  Secondly, the definition of an international flight was changed from a flight that begins in BC and ends outside North America (North America meaning Canada and the continental United States, including Alaska, but not Hawaii), or vice versa, to a flight that begins in BC and ends outside Canada, or vice versa.

BC Bulletin MFT 009