Guide to completing the motor fuel generic return

This guide helps motor fuel tax collectors and registered consumers complete the motor fuel generic return (FCO return) in eTaxBC.

Find additional motor fuel tax and carbon tax information on our website at gov.bc.ca/fuelandcarbontax

Find additional eTaxBC information in our eTaxBC help guide including browser requirements. 

In this guide:

• General instructions
• Accountable fuels
  • Diesel and related products
  • Gasoline and related products
• Completing the FCO return 
  • 1 Opening Untaxed Inventory 
  • 2 Refined or Manufactured within Jurisdiction
  • 3 Imports from Out-of-Jurisdiction FTD-1 and FTG-1 
  • 4 Acquisitions within Jurisdiction FTD-2 and  FTG-2
  • 5 Rebrands FTD-2.5 and FTG 2.5 
  • 6 Closing Untaxed Inventory
  • 7 Total Accountable Volumes
  • 8 Exports Out-of-Jurisdiction FTD-3 and FTG-3
  • 9 Dispositions FTD-4 and FTG-4
  • 10 Exempt Sales FTD-5 and  FTG-5
  • 11 Volume Adjustments FTD-6 and FTG-6
  • 12 Total Taxable Volumes
  • 13 Total Tax Before Adjustments
  • 14 Adjustments and Tax Credits FTD-7 and FTG-7
  • 16 Commissions FTD-8 and FTG-8
  • 17 Net Tax Payable
• Amend a return
• Other related tax returns

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General instructions

Collectors pay security to the ministry equal to the amount of tax that would've been collected if they sold the fuel to an end purchaser. Collectors receive and retain the security paid to them by deputy collectors and retail dealers, and they collect and retain taxes they collect from end purchasers, up to the amount of the security they paid on the fuel.

Collectors and registered consumers file the motor fuel collector return (FCO) using eTaxBC. Once you logon to eTaxBC, select the Fuel Col. FCO account type. Find the period and select File Return.

The volumes you report on your FCO return must be consistent with any supporting documents provided. If applicable, reported volumes must also match reported information on carbon tax returns and returns submitted to other jurisdictions. For example, the volume of exempt fuel sales to eligible First Nations purchasers on your FCO return must match the volume of exempt sales to eligible First Nations purchasers on your carbon tax return.

If we identify inconsistent information, such as summary information not matching supporting documents, we'll attempt to contact you. If we're unable to resolve the inconsistency before month end, we'll process the tax return based on the best information available, which is usually the transactional information. We may issue an assessment for any amounts owing due to the error. We may also investigate significant changes or differences between reporting periods. In addition to contacting you by telephone or email, we may also schedule a site visit or field audit to examine the accuracy of your records and supporting documents.

Accountable fuels

Accountable fuels are any refined or manufactured fuel products available at a refinery, terminal, bulk plant or other storage location in the province for sale or resale during the reporting period. As a general rule, you must report any fuel that can be used in an internal combustion engine even if sold for a non-taxable purpose.

Accountable fuel volumes reported must be:

• Based on ownership and not possession
• Net volumes, which means temperature corrected to 15 degrees Celsius (contact us if this is not possible)
• Reported in litres and rounded to the nearest whole number (for example, 1.49 becomes 1.0 and 1.50 becomes 2.0)
• More than zero (do not report negative volumes with the exception of FTD-2.5 and FTG-2.5 Rebrands, and FTD-7 and FTG-7 Tax Adjustments) 
• Documented if there is a volume loss (shrinkage can only be determined and used in a calculation of untaxed inventory if a physical dipping occurs) 

Below are examples of accountable fuels and how to report them.

Note: Natural gas including Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) are not accountable fuels and not reported on this return. These fuels are exempt from motor fuel tax at the time of sale, and are exempt if used in a motor vehicle. However, you must self-assess if you use the fuel in a stationary combustion engine. 

If you manufacture fuel in, or bring fuel into, B.C. for your own use, you must self-assess and pay motor fuel tax and/or carbon tax on that fuel. For more information, see Bulletin MFT-CT 006, Self-Assessing Motor Fuel and Carbon Tax (PDF, 187KB).

Diesel and related products

Gasoline and related products

If you're uncertain of how to report fuel, please contact us.

Completing the FCO return

Registered consumers

You report fuel used for a taxable purpose directly on line 12 Total Taxable Volumes on the FTD-Tax Summary and FTG-Tax Summary. You're not required to complete any of the schedules for example, FTD-1, FTG-1 etc. or provide attachments and you're not eligible to receive commission.

Collectors

You report fuel activity by entering the summarized volumes in the schedules for example FTD-1, FTG-1 etc. The FCO return will automatically populate the volumes from the schedules to the FTD-Tax Summary and FTG-Tax Summary.

Exceptions: Line 1, 2 and 6 do not have schedules so you must enter the volumes directly on the FTD-Tax Summary and FTG-Tax Summary. Line 7, 13 and 17 are totals that will automatically calculate for you.

Additional supporting documents

In addition to what you report on your FCO return, collectors may be required to attach supporting documents to the FCO return.

If you're required to provide individual sale or purchase transaction level details as supporting documents, it must be itemized in a spreadsheet format (Excel is preferred) with the following details:

• Invoice number
• Seller, purchaser or customer name
• Jurisdiction and city where ownership changed
• Carrier name
• Product
• Volume
• Tax rate

If you're required to provide other supporting documents (for example, police reports or insurance claims), you may provide them in a PDF format. You do not have to provide invoices or bills of lading when you submit your return, but you must keep this information in case we ask for it.

Note: If you're providing multiple supporting documents, you may combine and attach them as one file for ease of filing the FCO return. The FCO return will not allow you to complete your return filing until the required documents have been properly attached. 

Below, by each line of the tax summary pages, we provide more detailed instructions on how to complete the FCO return and if any supporting documents must be attached when filing the return.

1 Opening Untaxed Inventory

Report your opening untaxed inventory directly on the FTD-Tax Summary and FTG-Tax Summary. Opening inventory volumes must equal the closing inventories from your last reporting period.  

2 Refined or Manufactured within Jurisdiction

Report the total volume of fuel refined or manufactured within B.C. directly on the FTD-Tax Summary and FTG-Tax Summary. Use this line only if you're a collector with a refinery or manufacturing facility (for example, biodiesel) physically located in B.C.

If the fuel you refine or manufacture is to be relabelled or coloured before being sold, you must first report it on this line and then report it on the FTD-2.5 and FTG-2.5 Rebrands (for example, line 2 of the FTD-Tax Summary; Refined 10,000 litres of Diesel, FTD-2.5. Rebrands; -10,000 litres Diesel, +10,000 litres Coloured Diesel).

3 Imports from Out-of-Jurisdiction FTD-1 and FTG-1

Report a summary of the total volume of fuel you refined or manufactured in other jurisdictions, or you owned in other jurisdictions and then imported (for example, by pipeline, railcar, truck, ship or vessel) into B.C. This includes fuel that's sold or transferred to you at, on or as it crosses the border into B.C.

The only exception to reporting imported fuel is if the fuel was imported by a ship from outside of Canada and you sold fuel in prescribed volumes (for example, more than 5 million litres for a liquid fuel) before the fuel was released by the Canada Border Services Agency, or after it was released by the Canada Border Services Agency but before or at the time the fuel was removed from the ship or barge on which it entered B.C. In these situations, the businesses in B.C. who purchased the fuel for resale are the vendors and must be appointed as collectors for that fuel and must report the import of that fuel. For more information, see Bulletin MFT-CT 001, Fuel Sellers (PDF, 241KB). You cannot rebrand or relabel fuel or any interface or transmix that you created during the import process, and the imported fuel you report should match tax returns submitted to other jurisdictions (for example, 100 litres of clear diesel you reported to BC as imported from Alberta, matches the 100 litres of clear diesel you reported to Alberta as exported to B.C.).

In all cases, identify the jurisdiction (province or state, or country if outside North America) where the type of fuel was exported from.

You must include additional supporting documents (sale or purchase transaction level details) as an attachment to the FCO return.

4 Acquisitions within Jurisdiction FTD-2 and FTG-2

Report a summary of the total volume of fuel you purchased or acquired in B.C.

You must report a fuel purchase in the month it was purchased (when ownership was transferred) even if you do not receive an invoice or pay for the fuel until the following month. 

Acquisitions occur when there has been a change of ownership of identifiable inventory. Include fuel that's traded or swapped with another fuel seller, and fuel that has not yet been invoiced by a fuel supplier.

Note: All fuel purchased in B.C. should be tax paid and reported on Volume Adjustments FTD-6 and FTG-6 (reason code 04 Tax Paid Purchases in B.C.) to ensure that this fuel is not taxed twice. The only exceptions to reporting on the Volume Adjustments FTD-6 and FTG-6 are sales between refiner collectors, and purchases you make within B.C. where the fuel is subsequently exported for resale outside of the province by you or a common carrier. A contract with the common carrier for the removal of the fuel must be entered into at the time the fuel is purchased by you within B.C. In both cases, the fuel is purchased tax-exempt. 

You must include additional supporting documents (sale or purchase transaction level details) as an attachment to the FCO return.

5 Rebrands FTD-2.5 and FTG-2.5

Report a summary of the total volume of fuel you relabelled (for example, clear diesel to locomotive) and fuel you coloured and reclassified as another fuel type (for example, clear diesel to coloured diesel or coloured heating oil). 

The net result must always be zero (for example, 100 litres clear diesel rebranded to 100 litres coloured diesel is recorded as -100 litres Diesel, and +100 litres Coloured Diesel).

Do not include the mixing of fuel as a rebrand if the fuel type does not change. For example, the mixing of regular and premium grades of clear gasoline to create a clear mid-grade gasoline is not rebranding as the type of fuel remains clear gasoline.

You cannot rebrand from a lower taxed fuel to a higher taxed fuel. For example, you cannot relabel locomotive fuel to clear diesel, or relabel heating oil to coloured diesel. The only exceptions to this are blending small quantities of other fuels as additives. For example, jet fuel blended with clear diesel to sell as winter diesel, or butane blended with gasoline to sell as higher-octane gasoline.

If you rebrand fuel, you must keep records as we may request additional supporting documents at a later date.

6 Closing Untaxed Inventory

Report the closing untaxed inventory directly on the FTD-Tax Summary and FTG-Tax Summary.

Enter the total volume of untaxed inventory at the end of the reporting period of all fuel products within B.C. and include fuel in transit that you own, or are deemed to own, as inventory for resale. This includes any slop and transmix that you still own.

Note: If you have a negative closing value, it's likely you have missed a fuel purchase or import. 

We generally consider you to own fuel at the end of your reporting period, if:

• You have entered into an agreement to buy fuel and the agreement provides that you own the fuel immediately after midnight at the end of a reporting period, even though you have not received delivery of the fuel at that time, and
• You have not entered into an agreement with another person that provides that the other person owns the fuel at that time

You may only report fuel as untaxed if you're a collector that has manufactured or imported fuel into B.C. and not sold it within the reporting period. Do not include any fuel purchased in B.C. as untaxed inventory as it should all be tax paid. The only exceptions to this are untaxed sales between refiner collectors, and purchases you make within B.C. where the fuel is subsequently exported for resale outside of the province by your fuel supplier or a common carrier but not exported within the reporting period. You determine the closing inventory by using the general accounting principle: opening inventory + purchases - sales = closing inventory.

The formula for determining untaxed closing inventory includes rebranded fuel and information from both your motor fuel and carbon tax collector returns (FCO and CTA).

Untaxed closing inventory = untaxed opening inventory + refined or manufactured fuel + imported fuels + rebranded fuels - B.C. sales - exports + security paid sales (FCO line 6 = FCO line 1 + FCO line 2 + FCO line 3 - CTA line 1 - FCO line 8 + CTA line 6) 

Closing inventory volumes must equal the opening untaxed inventories for your next reporting period. If not, your return will not be processed.

7 Total Accountable Volumes

The FTD-Tax Summary and FTG-Tax Summary will automatically calculate the sum of the volumes reported on lines 1 through line 5, minus the volume reported on line 6 (line 7 Total Accountable Volume equals the total of lines 1 + 2 + 3 + 4 + 5 - 6).

8 Exports Out-of-Jurisdiction FTD-3 and FTG-3

Report a summary of the total volume of fuel you own which is exported by pipeline, truck, rail, ship or any vessel from B.C. for resale in another jurisdiction (your ownership of the fuel changes after the fuel is removed from B.C.). Include intra-company exports and exports made directly to a consumer (sometimes called migratory sales). Include fuel purchased within B.C. with tax paid and exported by you, and fuel purchased tax-exempt and removed by your fuel supplier or a common carrier where the contract with the common carrier was entered into at the time you purchased the fuel.

This summary does not include fuel you sell or transfer to a customer at, on or as it crosses the border leaving B.C, as these are considered sales in B.C. (not exports). In addition, this does not include tax-exempt fuel you sold within B.C. that was subsequently exported for resale outside of the province by you, someone acting on your behalf, or a common carrier, for your customer.

If you sell fuel to a customer in B.C., you must charge tax even if they intend to export the fuel. The only exceptions to this are sales between refiner collectors, sales to customers who have written authorization from the Director of the Motor Fuel Tax Act to purchase a type of fuel exempt of tax, and sales within B.C. for resale outside of B.C. where the fuel is subsequently exported by you, a person acting on your behalf, or a common carrier where the contract with the common carrier was entered into at the time you sold the fuel. In these situations, the sales should be reported as a disposition to fuel sellers for export on FTD-4 and FTG-4 Dispositions, not as Exports Out-of Jurisdiction or Exempt Sales.

You cannot rebrand or relabel fuel during the export process, and the exported fuel must match tax returns filed in other jurisdictions (for example, 100 litres of clear diesel you reported to B.C. as exported to Alberta, must match the 100 litres of clear diesel you reported to Alberta as imported from B.C.).

In all cases, you must identify the jurisdiction (province or state, or country if outside North America) where the fuel was exported and then sold.

You must include additional supporting documents (sale or purchase transaction level details) as an attachment to the FCO return.

9 Dispositions FTD-4 and FTG-4

Report a summary of the total volume of fuel you sold exempt of tax within B.C. to: 

• Other refiner collectors
• Registered consumers (international air and interjurisdictional rail), or
• Other fuel sellers for export where the conditions for exemption have been met

Include fuel volumes traded or swapped between refiner collectors and fuel sold to a registered consumer, or to another fuel seller for export and resale outside the province even if the fuel has yet to be invoiced to the customer.

If you're a refiner collector, report all volumes of fuel sold exempt of tax to other refiner collectors who are also refiner collectors for that same type or subcategory of fuel. The delivery or supply of fuel must originate and terminate within B.C. For example, a company who is a refiner collector for clear diesel may sell clear diesel to another collector in B.C. without paying security to us, if that collector is also a refiner collector for clear diesel. 

Report all volumes of fuel you sold exempt of tax to registered consumers. Registered consumers are eligible to purchase certain fuels exempt of tax and self-assess based on taxable use in B.C. The delivery or supply of the fuel must originate and terminate within B.C. There are only two types of registered consumers:

• Interjurisdictional Rail – for locomotive fuel
• International Air – for jet fuel

Report all volumes of fuel you sold exempt to other fuel sellers for export when the fuel sold is removed by: 

• You (the collector selling the fuel)
• A person acting on your behalf, or 
• A common carrier if the contract with the common carrier for the removal of the fuel is entered into at the time the fuel is sold within B.C.

You must include additional supporting documents (sale or purchase transaction level details) as an attachment to the FCO return.

Note: For each transaction, you must indicate what exemption applies: refiner collectors, registered consumers or sales for export.

10 Exempt Sales FTD-5 and FTG‑5

Report a summary of the total volumes of fuel you sold exempt of tax within B.C. using the exempt reason codes provided below.

Do not include exempt sales reported on FTD-4 and FTG-4 Dispositions above. 

Note: The federal, provincial and municipal governments are not exempt and must pay motor fuel tax.

You must include additional supporting documents (sale or purchase transaction level details) as an attachment to the FCO return. For each transaction, you must indicate what exemption applies.

Exempt reason codes

11 Volume Adjustments FTD-6 and FTG-6

Report a summary of the volume adjustments for each fuel type. Include fuel losses at terminals located within the reporting jurisdiction. Report adjustments that can only be reported by volume (litres) to:

• Reduce the amount of tax owing (entered as a positive value), or 
• Increase the amount of tax owing (entered as a negative value) 

You may be required to retain or include additional supporting documents as an attachment to the FCO return as explained below by each exempt reason code.

Exempt reason codes

Note: Adjustments will be reversed if you do not provide an acceptable reason or if you do not attach the required supporting documents. Use line 14 for adjustments that can only be reported as a monetary value. 

12 Total Taxable Volumes

Collectors

The FTD-Tax Summary and FTG-Tax Summary will automatically calculate the total taxable volumes for each fuel type by deducting the sum of lines 8 through to 11 from line 7 (line 12 Total Taxable Volume equals line 7 less the sum of lines 8 + 9 +10 +11). 

This line should be zero (0) for any column or fuel type having a zero-tax rate, such as Heating Oil, Non-Taxable Diesel, Non-Taxable Gasoline, Kerosene and Bunker Fuel. Report sales of these fuels on the FTD-5 and FTG-5 Exempt Sales (reason code 06 Other). 

Registered consumers

Report the volume of fuel used for a taxable purpose. This is the only part of the FCO return that you complete.

13 Total Tax Before Adjustments

The FTD-Tax Summary and FTG-Tax Summary will automatically calculate the tax for each fuel type by multiplying line 12 Total Taxable Volumes by the current applicable tax rate for each fuel.

14 Adjustments and Tax Credits FTD-7 and FTG-7

Report a summary of tax adjustments and tax credits for each fuel type that can only be shown and deducted as a monetary adjustment. Dollar values must be in Canadian currency and to two decimal places.

Enter tax adjustments to reduce tax owing as a positive value, and tax adjustments to increase the tax owing as a negative value. 

You may be required to retain or include additional supporting documents as an attachment to the FCO return as explained below by each adjustment reason code.

You must provide acceptable supporting documentation and a satisfactory explanation for a volume adjustment, or the adjustment will be reversed. Report adjustments and tax credits by completing the following schedules.

Adjustment and tax credit reason codes

Note: Adjustments and tax credits will be reversed if you do not provide an acceptable reason or if you do not attach the required supporting documents. Adjustments that can only be shown by volume (litres) must be reported on the FTD-6 and FTG-6 Volume Adjustments.

16 Commission FTD-8 and FTG-8

Commission will automatically calculate for each fuel type you sell for the first time in B.C. after manufacture or import into B.C. for which you'll be paying security to B.C.

Commission for FTD-8 and FTG-8 is calculated separately. If your Total Taxable Volume in FTG-8 is negative, you're not paying any security to B.C. for your gasoline sales and you're not entitled to a gasoline commission. However, you may still be entitled to a commission for your diesel sales if your Total Taxable Volume in FTD-8 is positive.

The commission is based on $0.00022 per litre and the maximum commission is $10,000 per fiscal year. Commission totals are based each year on return periods from April (for March sales activity) to the following March (for February sales activity). 

If you're a registered consumer, you're not eligible to claim any commission.  

If you're a collector, you're not eligible to claim commission on fuel:

• Purchased in B.C. security-in
• Sold exempt of tax (for example, heating oil or bunker fuel)
• Sold to exempt purchasers (for example, to an eligible First Nations individual or resold outside B.C.)
• That you used (manufactured or imported and did not sell)

Commission is disallowed if:

• Your return or payment is late or underpaid
• You did not submit all required tax returns or attachments

If you used fuel (manufactured or imported and did not sell), you must complete the Less: Own Consumption line.

17 Net Tax Payable 

The FTD-Tax Summary and FTG-Tax Summary will automatically calculate the tax payable for each fuel product by deducting line 14 and line 16 from line 13 (line 17 Net Tax Payable equals line 13 -14 -16).

Amend a return

If you identify an error (for example, transposed numbers) in your FCO return for a prior reporting period, you must file an amendment or revised return for that period. You must report true values, not the net value of the change (for example, if you reported 1 million litres of diesel, but you should have reported 4 million, your amended return must state 4 million not the net increase of 3 million).

• For an error in a sales invoice to your customer, you should reverse and rebill your customer, and you must amend the original return to reflect revised amounts (volumes and/or dollars). You cannot reverse and rebill fuel sales in order to provide a tax refund to another fuel seller or customer.
• For a minor adjustment (for example, a calculation error between the attachment and the schedule for one fuel type) we can make the correction for you if you provide us with written instructions. Your instructions must be specific to the fuel types and sections of the return you're amending, and include “check values” (for example, the revised taxable volumes for diesel, revised diesel security due, revised total amount of security due) to make sure the adjustments we make agree with the adjustments you requested.
• For errors that cover multiple years or periods, please email us at FuelTax@gov.bc.ca to determine if we can reduce the number of amended returns that need to be submitted.

Generally, if you file late or file an amended return that results in an underpayment for that period, you'll be assessed interest and your commission disallowed unless there is sufficient credit on that account. If you file a second late or amended return within a 12-month period that results in an underpayment for that period, you may be assessed a 10% penalty plus interest unless there is sufficient credit on that account.

Other related tax returns

In addition to the FCO return, you may be required to file the following tax returns:

• South Coast BC Transportation Tax Return (FSC) – if you sell clear diesel or clear gasoline within the Vancouver area
• BC Transit Tax Return (Victoria) (FBT) – if you sell clear diesel or clear gasoline within the Victoria area
• Carbon Collector Tax Return (CTA)

These returns are available online using eTaxBC. For more information, see Bulletin MFT-CT 001, Fuel Sellers (PDF, 241KB).