Guide to completing the motor fuel generic return

Last updated on September 17, 2024

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 Motor fuel tax and tax web page.

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

In this guide:


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.

 

Example 1 - Any fuel (for example, diesel fuel or gasoline) that has not had a collector’s specific additives mixed in, even though it might not be considered marketable from the collector’s perspective 

Report under the most applicable fuel type column (for example, diesel fuel or gasoline).

 

Example 2 - Any specific additives that will be mixed into a fuel (for example, diesel fuel or gasoline) so that it becomes marketable from the collector’s perspective

Report the import or acquisition of the specific additives under Other Non-Taxable column. If it was blended with fuel during the reporting period, then report the movement of the additive volume to the applicable fuel type column it was blended with on the Rebrands FTD-2.5 and FTG-2.5, for example -100 litres of Non-Taxable fuel type column, +100 litres Diesel.

 

Example 3 - Any fuel sold for any use other than for an internal combustion engine (for example, diesel sold as a feedstock for the manufacture of explosives or diesel sold as a lubricant) 

If you sell a substance that's chemically identical to gasoline (for example, solvent) or diesel (for example, lubricant), motor fuel tax does not apply if you market or sell the substance for a use other than for an internal combustion engine. Report under the applicable fuel type column (for example, gasoline or diesel), do not relabel to the Other Non-Taxable column.

You may sell these substances exempt from motor fuel tax, if you have a Certificate of Exemption - Substances Sold for Use Other than in Internal Combustion Engines (FIN 480) (PDF, 308KB) from your customer. Report on the FTD-5 and FTG-5 Exempt Sales and select reason code 06 Other. You must also attach supporting transactional details with the return. Note: 7% PST may apply to sales of these substances.

For more information on how to label petroleum products if you're selling them exempt of motor fuel tax, see Bulletin MFT-CT 005, Tax Rates on Fuels (PDF, 241KB).

 

Example 4 - Any slop, interface, transmix and waste 

  • Slop is any mixed hydrocarbon products that are suitable for refining. Slop is reprocessed through the refinery
  • Interface is the mixture or interface of two refined products such as gasoline and diesel fuel, or diesel fuel and jet fuel
  • Transmix is the buffer or interface that results from the mixing of two different accountable products in a pipeline shipment, and includes a mixture of two different products within a refinery that results in an off-grade product mix 
  • Waste is a contaminated product which can not be reused, reclaimed, or reprocessed, but must be disposed of as a waste or hazardous material

If you do nothing with slop or transmix (hold in a separate storage tank) you simply continue to record as part of your Opening and Closing Untaxed Inventory under the applicable fuel type column directly on the tax summary.

If you sell the slop, transmix or waste for use in an internal combustion engine, report the movement of the fuel volumes to the applicable fuel type column on the FTD-2.5 and FTG-2.5 Rebrands. For example, a transmix of jet and diesel that you colour and sell as coloured diesel.

If you sell slop, transmix or waste “as is” to a refinery for reprocessing or disposal of the fuel, report under each applicable fuel type column on the FTD-6 and FTG-6 Volume Adjustments (reason code 03 Slop). Alternatively, report the movement of the fuel on the FTD-2.5 and FTG-2.5 Rebrands to one fuel type column (for example, to Diesel Other Non-Taxable) and report on the FTD-6 and FTG-6 Volume Adjustments (reason code 03 Slop).

If you're a refinery owner and reprocess the volume, report on the FTD-6 and FTG-6 Volume Adjustments (reason code 03 Slop) for the slop portion of each fuel type. Alternatively, report the movement of the fuel on the FTD-2.5 and FTG-2.5 Rebrands to the applicable fuel type column (for example, to Diesel Other Non-Taxable), and report on the FTD-6 and FTG-6 Volume Adjustments (reason code 03 Slop).

Note: Line 12 Total Taxable Volumes for the Other Non-Taxable column, must be zero (0).

When the fuels are reprocessed you report them again directly on the FTD-Tax Summary and FTG-Tax Summary, line 2 Refined or Manufactured within Jurisdiction.

 

Example 5 - Methanol, if sold for use in an internal combustion engine

Report as diesel fuel or gasoline. See the diesel and gasoline information below if the volume of fuel sold contains at least 85.1% methanol (for example, 85.1% methanol and 14.9% diesel).

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

 

Diesel

Diesel includes biodiesel blends, pure biodiesel and renewable diesel (these fuels are taxed at the same rate as diesel).

If you sell diesel fuel blended with at least 85% methanol (for example, 85.1% methanol and 14.9% diesel) it is exempt from motor fuel tax. Report in the Diesel fuel type column (do not report under the Other Non-Taxable column) in the FTD-5 Exempt Sales (reason code 06 Other) and attach supporting transactional level details.

 

Coloured diesel

Coloured diesel is diesel that has been correctly coloured to 14ppm.

If you're authorized to colour fuel and you colour diesel, (did not purchase coloured diesel), you report the movement of the fuel from the Diesel fuel type to the Coloured Diesel fuel type in the FTD-2.5 Rebrands (for example, -100 litres of Diesel, +100 litres Coloured Diesel).

If you sell coloured diesel for any purpose other than in an internal combustion engine, you report the exempt sale in the FTD-5 Exempt Sales (reason code 06 Other).

 

Heating oil

Heating oil is light fuel oil (coloured diesel) marketed or sold for use in a furnace, boiler or open flame burner.

If you're authorized to colour fuel and you colour heating oil, (did not purchase coloured heating oil) you report the movement of the fuel from either the Diesel or Coloured Diesel fuel type column to the Heating Oil fuel type column in the FTD-2.5 Rebrands (for example, -100 litres of Coloured Diesel, +100 litres Heating Oil).

All volumes of heating oil are exempt from motor fuel tax. If you sell heating oil, you report the exempt sale in the FTD-5 Exempt Sales (reason code 06 Other). You do not need to list each sale of heating oil, but you must keep this information in case we ask for it later. Heating oil is subject to PST if sold to end consumers for a non-residential use.

Note: Line 12 Total Taxable Volumes for the Heating Oil column must be zero (0).

 

Marine diesel

Marine diesel is diesel fuel that's used in a ship as fuel for an internal combustion engine and has a viscosity of lower than 10 centistokes when measured at a temperature of 50°C, or 10 centistokes or higher when measured at a temperature of 50°C, but is sold as diesel fuel.

If you sell marine diesel you did not purchase, you report the movement of the fuel from the Diesel fuel type column to the Marine Diesel fuel type column in the FTD-2.5 Rebrands (for example, -100 litres of Diesel, +100 litres Marine Diesel).

 

Jet fuel

Jet fuel is fuel that's produced specifically for use in an aircraft that is propelled by a turbine, and used in an aircraft as fuel for the turbine that propels the aircraft.

Generally, jet fuel is a stand-alone fuel type. However, occasionally jet fuel is blended with diesel (for example, to make winter diesel for a motor vehicle). If you do this, you must move the fuel from the Jet Fuel type column to the fuel type column it is blended with in the FTD-2.5 Rebrands (for example, -100 litres of Jet fuel, +100 litres Diesel).

 

Kerosene

Kerosene is a substance similar to diesel and jet fuel but marketed or sold for uses other than in an internal combustion engine such as lanterns, camping stoves, and wick heaters.

Generally, kerosene is a stand-alone fuel type. However, occasionally it is blended with diesel to produce a higher quality fuel. If you sell kerosene for use in an internal combustion engine, you must move the fuel from the Kerosene fuel type column to the fuel type column it is blended with in the FTD-2.5 Rebrands (for example, -100 litres of Kerosene, +100 litres Diesel).

If you sell kerosene for any purpose other than in an internal combustion engine, you report under the Kerosene fuel type column and report the exempt sale in the FTD-5 Exempt Sales (reason code 06 Other).

 

Marine bunker fuel

Marine bunker fuel is bunker oil, or a combination of fuels including bunker oil that's used in a ship as fuel for an internal combustion engine, but does not include marine diesel fuel.

Generally, marine bunker is a stand-alone fuel type. However, occasionally it is blended with marine diesel to produce a higher quality fuel. If you blend marine diesel with marine bunker fuel, you must move the fuel from the Marine Diesel fuel type column to the fuel type column it is blended with in the FTD-2.5 Rebrands (for example, -100 litres of Marine Diesel, +100 litres Marine Bunker Fuel).

 

Locomotive fuel 

Locomotive fuel is fuel, other than propane, for use in an internal combustion engine in any rolling stock or other vehicle when run on rails.

If you sell locomotive fuel you did not purchase, you move the fuel from the Diesel fuel type column to the Locomotive Fuel type column in the FTD-2.5 Rebrands (for example, -100 litres of Diesel, +100 litres Locomotive Fuel).

 

Other taxable

Do not use

 

Other non-taxable fuel

Other non-taxable fuel is for substances such as feedstock and/or additives which are then blended.

Report the import or acquisition and move the volume to the fuel type column it was blended with in the FTD-2.5 Rebrands (for example, -100 litres of Non-Taxable fuel type, +100 litres Diesel). 

Gasoline and related products

 

Gasoline

Gasoline includes ethanol blended gasoline and pure ethanol (clear ethanol is taxed at the same rate as gasoline).

If you sell alcohol-based blends of gasoline that contain at least 85% methanol (for example, 85.1% methanol and 14.9% gasoline), it is exempt from motor fuel tax. Report in the Gasoline fuel type column (do not report under the Other Fuel Non-Taxable column) in the FTG-5 Exempt Sales (reason code 06 Other) and attach supporting transactional level details.

 

Coloured gasoline

Coloured gasoline is gasoline that has been correctly coloured to 14ppm.

If you're authorized to colour fuel and you colour gasoline, (did not purchase coloured gasoline), you report the movement of the fuel from the Gasoline fuel type to the Coloured Gasoline fuel type in the FTG 2.5 Rebrands (for example, -100 litres of Gasoline, +100 litres Coloured Gasoline).

If you sell coloured gasoline for any purpose other than in an internal combustion engine, you report the exempt sale in the FTG-5 Exempt Sales (reason code 06 Other).

 

Aviation gasoline 

Aviation gasoline is fuel that's produced specifically for use in an aircraft that is not propelled by a turbine, and used in an aircraft as fuel for the engine that propels the aircraft.

Generally, aviation fuel is a stand-alone fuel type and never blended.

 

Propane

Propane includes Liquefied Petroleum Gas (LPG) and may also be referred to as autogas.

 

Other taxable

Do not use

 

Other non-taxable

Other non-taxable fuel is for substances such as feedstock and/or additives which are then blended.

Report the import or acquisition and move the volume to the fuel type column it was blended with in the FTG-2.5 Rebrands (for example, -100 litres of Non-Taxable fuel type, +100 litres Gasoline). 

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 + B.C. acquisitions + rebranded fuels B.C. sales exports tax paid purchases + security paid sales

(FCO line 6 = FCO line 1 + FCO line 2 + FCO line 3 + FCO line 4 + FCO line 5 – CTA line 1 – FCO line 8 – FCO line 11 code 4 (tax paid purchase) + 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

 

01 Eligible First Nations

You may sell fuel exempt to eligible First Nations individuals and bands under specific circumstances. For information, see Bulletin MFT-CT 002, Sales to First Nations and the Fuel Tax Exemption Program (PDF, 330KB)

 

02 Exempt fuel retailers

Exempt Fuel Retailers (EFRs) are fuel sellers who operate on First Nations land and have received authorization from the ministry to purchase gasoline, diesel, and/or propane exempt of motor fuel tax. For more information, see Bulletin MFT-CT 002, Sales to First Nations and the Fuel Tax Exemption Program (PDF, 330KB)

 

03 Farmers

You may sell coloured fuel to bona fide farmers exempt of motor fuel tax in certain situations. For more information, see Bulletin MFT-CT 003, Coloured Fuels and Other Substances (PDF, 253KB).

 

05 Diplomats

As a general rule, you should sell only clear gasoline and diesel exempt of tax to diplomats. For more information, see Bulletin CTB 007, Exemption for Members of the Diplomatic and Consular Corps (PDF, 188KB).

 

06 Other

Use this code to report other exempt sales not reported elsewhere. For example, fuels sold for purposes other than for use in an internal combustion engine (used as a lubricant for down-hole drilling, used for manufacturing explosives, and heating oil). For more information on selling substances which are chemically the same as fuels but exempt from motor fuel tax, see Bulletin MFT-CT 005, Tax Rates on Fuels (PDF, 241KB). Also, use this code for specific fuel types having a zero-tax rate (for example, coloured heating oil, and bunker fuel, which is used in internal combustion engines but not subject to motor fuel tax). Do not use this code to report exempt sales of slop, interface and transmix (see line 11 Volume Adjustments).

 

07 Marine diesel

You may sell marine diesel exempt of tax for use in a turbine engine that propels a commercial passenger or cargo ship. You may also sell marine diesel exempt of tax for use in an interjurisdictional cruise ship, or marine diesel for use in a ship prohibited from coasting trade under the Coasting Trade Act (Canada). For more information, see Bulletin MFT-CT 005, Tax Rates on Fuels (PDF, 241KB).

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

 

01 Shrinkage/Overage

You generally do not use this reason code since fuel sold in B.C. is temperature corrected. You determine this form of volume change only by physically dipping tanks and doing a reconciliation (for example, booked volume versus empty tank). You do not need to provide supporting documentation, but you must keep it in case we ask for it later. B.C. does not have a set percentage that you may claim (for example, an allowance versus an actual physical reconciliation).

 

02 Spillage 

You must provide supporting documentation as an attachment to the FCO return (for example, police or accident reports, insurance claims and disposal records).

 

03 Slop (includes Interface or Transmix)

You do not need to provide supporting documentation, but you must keep it in case we ask for it later.

 

04 Tax-Paid Purchases in B.C.

You must report tax-paid purchases in the month in which the fuel was purchased even if you do not receive an invoice or pay for the fuel until the following month. You do not need to provide invoices but you must keep them in case we ask for them later.

 

05 Other

Use this code to report other volume adjustments not reported elsewhere. For example, you may include volume losses for theft and fraudulent transactions. Do not include bad debts as this is reported on line 14. You must provide supporting documentation as an attachment to the FCO return (for example, police reports and insurance claims that support the volume reported).

 

06 Waste

You do not need to provide supporting documentation, but you must keep it in case we ask for it later.

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

 

02 Overflow Sales - Reversal

Use this reason code only if you used reason code 03 in the previous return. The volume you report under this code must be exactly the same as the volume under reason code 03 (see example under reason code 03 below). You must enter a positive number to net out the additional tax remitted in the previous return. You must submit an amended return if you determine that your actual sales are greater than the estimated sales reported under reason code 03 on your last return (you did not estimate a large enough volume and you under paid taxes on your previous return).

 

03 Overflow Sales - Estimate

Use this reason code if you have a system reporting issue and estimate that your actual sales are greater than what your system is reporting. Use this reason code to remit additional taxes and avoid a potential underpayment, and any resulting penalty and interest charges. You must enter a negative number to remit additional tax.

Example
  January February March
03 Estimate -100 -125  
02 Reversal   +100 +125

If you're estimating or reversing overflow sales in:

  • Vancouver area (South Coast British Columbia transportation service region) – you report the tax amount as follows:
    • South Coast BC Transportation Tax Return (FSC) on line 8 and on line 4 (under Provincial Fuel Tax Return Adjustment), and
    • FTD-7 and FTG-7 Tax Adjustments (reason code 06 SCTT adjustment)
  • Victoria area (British Columbia Transit Authority) – you report the tax amount as follows:
    • BC Transit Tax Return (Victoria) (FBT) on line 8 authorized adjustments
    • FTD-7 and FTG-7 Tax Adjustments (reason code 6 SCTT adjustment)
  • Rest of B.C. - you report the tax amount on the FTG-7 and FTG-7 Tax Adjustments (reason code 6 SCTT adjustment).

You do not have to provide supporting documentation, but you must keep it in case we ask for it later.

 

04 Bad Debt Write-Offs

You must provide supporting documentation for a financial adjustment as an attachment to the FCO return. See Bulletin CTB 001, Bad Debts (PDF, 193KB).

 

05 Tax Code Error

You must provide supporting documentation for a financial adjustment as an attachment to the FCO return.

 

06 SCTT Adjustment

This adjustment is for sales made within the Vancouver Area (South Coast British Columbia Transportation service region) where the provincial portion of the motor fuel tax rate is lower. Transfer to this reason code any gasoline and diesel provincial fuel tax adjustment amounts from line 5 of the Provincial Fuel Tax Return Adjustment section on South Coast BC Transportation Tax Return (FSC). See Bulletin MFT-CT 005, Tax Rates on Fuels (PDF, 241KB).

 

07 Other

You must provide supporting documentation for a financial adjustment as an attachment to the FCO return.

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).

Contact information

For eTaxBC help, choose option 1.

Within Canada and the U.S.A. Toll Free
1-877-388-4440
Motor fuel and carbon tax
gov.bc.ca/fuelandcarbontax