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International Fuel Tax Agreement (IFTA) in B.C.

Publication date: November 28, 2022

Motor carriers who operate certain types of commercial motor vehicles interjurisdictionally must understand how motor fuel tax and carbon tax apply. The International Fuel Tax Agreement (IFTA) is a single system for collecting and distributing fuel taxes based on where the fuel is consumed, rather than where it is purchased. 

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Terms used on this page

A base jurisdiction is the province or state where you plate and insure your motor vehicle and maintain operational control and records of the vehicle.

A carrier is the person or business that owns or operates one or more IFTA commercial motor vehicles used for transporting passengers or goods between jurisdictions.

An IFTA licensee is a carrier who holds a valid IFTA carrier licence.

A motive fuel user permit is a temporary permit purchased from the BC Permit Centre by the owner/operator of a motive fuel powered IFTA qualified commercial vehicle that is not registered under IFTA (i.e. does not have a current IFTA licence and decals) when the vehicle enters B.C.

Motive fuel is diesel fuel, or a combination of fuels including diesel fuel, used to propel a motor vehicle. Motive fuel does not include gasoline, alternative motor fuel, locomotive fuel or coloured fuel.

An IFTA commercial vehicle is a motor vehicle used interjurisdictionally for the commercial transportation of passengers or goods that:

  • has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 11,800 kg or 26,000 lbs,
  • has three or more axles regardless of weight, or
  • is used in combination with a trailer and the weight of such combination exceeds 11,800 kg or 26,000 lbs.

An IFTA commercial vehicle does not include a recreational vehicle. 

A recreational vehicle is a vehicle used solely for personal pleasure by an individual and includes motor homes, buses and pick-up trucks with attached campers. 

Registered gross vehicle weight (RGVW) is the maximum licensed weight capacity of a vehicle, which is different than the Gross Vehicle Weight Rating (GVWR) established by the vehicle’s manufacturer, and different than the Gross Vehicle Weight (GVW) which is the current weight of a vehicle on the ground that varies depending on the weight of a vehicle, the weight of passengers, cargo, fuel, and accessories added to the vehicle after purchase.

How it works

Under IFTA, you register with your base jurisdiction and receive credentials, including an IFTA licence and decals for each IFTA commercial vehicle. These credentials allow your IFTA commercial vehicle to enter other IFTA jurisdictions without any additional fuel tax registration or reporting requirements.

When you’re registered under IFTA, you file a single fuel tax return with your base jurisdiction each quarter. You report the amount of fuel you purchased and the distances your IFTA vehicles travelled in each jurisdiction during the quarter. You also make a single payment to your base jurisdiction for the net tax due as calculated on your return. 

Your base jurisdiction then redistributes the taxes to other jurisdictions based on the information from your return. Alternatively, your base jurisdiction will issue a refund and collect taxes from other jurisdictions if you purchased more fuel than you consumed in a jurisdiction.

Alaska, the District of Columbia, Hawaii, Mexico, the Yukon Territory, Nunavut and the Northwest Territories are not members of IFTA.

 

Are you based in the Yukon or Northwest Territories?

You may apply for an IFTA licence if you agree to: 

  • make your operational records available for audit in B.C., or 
  • pay reasonable travel costs for auditors to audit your records outside of B.C.

If you have vehicles registered under the International Registration Plan in two or more IFTA jurisdictions, you can simplify your reporting by requesting consolidated fleet reporting. You do this by sending your request to all affected jurisdictions and indicating which jurisdiction you want to report to. If all jurisdictions and the International Registration Plan agree, you can consolidate your fleet reporting. Once approved, this allows you to register and report all activity on a single IFTA tax return to one jurisdiction. 

If your IFTA commercial vehicle is not registered under IFTA, you need to obtain a motive fuel user permit each time your vehicle enters B.C. Other jurisdictions may have the equivalent of a motive fuel user permit, or different requirements, for the entry of commercial vehicles not registered under IFTA and you should contact those jurisdictions for more information.

IFTA licence or motive fuel user permit

If your base jurisdiction is B.C. and you operate an IFTA qualified commercial vehicle, you must:

If your base jurisdiction is not a member of IFTA and you operate an IFTA qualified commercial vehicle, you must:

You do not need to register under IFTA or purchase a motive fuel user permit each time your vehicle enters B.C. if you operate a commercial vehicle and the vehicle is:

  • an ambulance, school bus, fire truck, taxi or police vehicle
  • non-diesel powered (if you’re not an IFTA licensee)
  • used solely as a recreational vehicle, or
  • registered for farm use outside B.C. However, a B.C. farmer with an IFTA commercial vehicle registered in B.C. as a farm vehicle and using motive fuel (e.g. clear diesel) is required to register under IFTA or purchase a motive fuel user permit each time the vehicle enters B.C.

To register your vehicles under the International Registration Plan (IRP), you must have a valid IFTA licence. Under IRP, you’re issued a set of licence plates (also known as prorate plates or “P” plates) and one cab card for each commercial vehicle. The licence fees you pay are distributed to the jurisdictions in which your commercial vehicles are expected to travel. 

If your base jurisdiction is B.C., you must have a valid IFTA licence when you apply for a prorate account and plates with the Insurance Corporation of British Columbia’s (ICBC) prorate department.

Registration in B.C.

Initial application

To register under IFTA, you must complete an Application for Carrier Licence International Fuel Tax Agreement (IFTA) online using eTaxBC. 

You’ll be asked to provide basic information about your business, its operations and the number of vehicles you plan to operate under IFTA.

There is a fee of $300 for new applicants, which includes a $200 registration fee plus the $100 annual licence fee. 

After you apply, send your payment along with a copy of your application confirmation page to:

Mailing address:
PO Box 9447 Stn Prov Govt, Victoria BC  V8W 9V7 

Courier address:
Fact Support
Mail Payment and Document Processing
1100 – 4464 Markham Street, Victoria BC  V8Z 7X8 

Make your cheque or money order payable in Canadian funds to the Minister of Finance.

Register online

After we receive your completed application and the applicable fee, we’ll issue an IFTA licence and a pair of decals for each IFTA commercial vehicle you plan to operate under IFTA.

It may take up to 30 calendar days from the date you submit the completed application and pay the registration fee for your account to be opened.

Annual renewal

You must renew your IFTA licence each year in B.C. The annual licence or renewal fee is $100. You can renew your licence and pay your fee online using eTaxBC.

Log on to eTaxBC

Once we approve your renewal, a new IFTA licence is issued along with the decals you requested for your IFTA commercial vehicles.

Generally, all renewals received before November 30 are processed by December 31, unless you have missing returns or payments, or have not paid your renewal fee.

Licences and decals

When your commercial vehicle is registered under IFTA, you must display an IFTA decal on each side of the exterior of the cab and keep the IFTA licence, or a photocopy of the licence, inside the cab. An electronic image of your IFTA licence is also acceptable but make sure you save it on your device in case there is no internet access.

You must keep a logbook showing what decals are issued to what vehicles and the date the decals were attached. 

IFTA licences and decals are valid for one calendar year, from January 1 through December 31. If your business name or address changes, you must inform us and we’ll issue you a new IFTA licence.

Note: If you sell an IFTA commercial vehicle that is decaled, you must remove your IFTA licence and decals from the vehicle. 

Additional decals and temporary operating permit

If you want to register an additional IFTA commercial vehicle, you can request additional IFTA decals. 

You should request a sufficient number of decals six weeks in advance to reasonably meet your operational requirements. However, if you need to operate an additional vehicle immediately, you can apply for a temporary IFTA operating permit at the same time as your decal request. 

Temporary permits are vehicle-specific and valid for 30 days. They are provided electronically for immediate use. You’ll receive an additional IFTA licence and the new decals by mail within the 30-day period.

You must request and apply for additional decals online using eTaxBC.

For your request to be approved, your IFTA account must be in good standing with all required IFTA Carrier Returns and payments received.

IFTA carrier return

Once registered for IFTA in B.C., you’re required to file quarterly IFTA Carrier Returns.

Your IFTA Carrier Return calculates the tax you owe, or the credit you’re due, from each member jurisdiction. If you owe tax, you remit one payment with your IFTA Carrier Return for the net tax due as calculated on your return. 

You must always file a quarterly return even if:

  • no fuel is purchased
  • you don’t travel during the quarter, or 
  • you only travelled within B.C. during the quarter

If you only travelled in B.C., you must still complete the kilometres travelled and the litres purchased sections of the return. 

If you identify an error in an IFTA Carrier Return from a previous reporting period, you must file an amended return for that reporting period.

B.C. Combined Tax Rate
On your IFTA Carrier Return the tax rate combines motor fuel tax plus carbon tax. 

How to file and pay using eTaxBC

You must file your IFTA Carrier Return every quarter through your IFTA account using eTaxBC. You can also pay any tax due or make any account payment using eTaxBC. 

Log on to eTaxBC

If you don't have access to eTaxBC, find out how to enrol.

Quarterly due dates for your IFTA Carrier Return and payment
Quarter Reporting period Due date
1st January to March April 30
2nd April to June July 31
3rd July to September October 31
4th October to December January 31

You’ll receive an email reminder from us when your return is ready to be filed in eTaxBC.

Your IFTA Carrier Return and payment are considered on time if they’re posted to eTaxBC by 11:59 pm (Pacific Time) on the due date. If the due date for the return and payment falls on a weekend or a B.C. holiday, the due date is the next business day.

Other ways to pay

  • By mail with a cheque or money order (payable in Canadian funds to the Minister of Finance)
  • Electronic funds transfer (EFT)
  • Bill payment service through your bank

Note: You cannot pay by credit card.

Your payment must be negotiable on or before the due date to be considered on time.

If you send payment by mail, it’s considered on time if the envelope is postmarked by Canada Post (or national equivalent if outside Canada) on or before the due date. A business postage meter mark is not sufficient. If you mail your payment on or near the due date, ask Canada Post to postmark the envelope immediately.

If you courier your payment, it must be received by us by the close of business (4:30 pm) on the due date to be considered on time.

Credits and refunds

If your return results in a credit of $10 or more, you can request a refund. If you do not request a refund, any credits greater than $10 are carried forward on your account and may be applied to future payments.

Note: To claim a refund, check the Refund Requested box on your IFTA Carrier Return.

Penalty for not filing returns

If your IFTA Carrier Return and payment are not received on time, penalties and interest may be applied. Nil returns, credit returns and amended returns are treated the same as other late returns in evaluating filing history. 

If you don’t file your IFTA Carrier Return, we may assess you for the estimated tax, plus a 10 percent penalty and interest. We may also suspend or revoke your IFTA licence.

Suspension, revocation, reinstatement and cancellation

We can suspend or revoke your IFTA licence if you don’t file IFTA Carrier Returns or pay taxes due. If your licence is suspended or revoked, we’ll notify you and all member jurisdictions, who will notify roadside enforcement. 

If your licence is revoked or cancelled, you must return all copies of your IFTA licence, including the original. You must also remove all IFTA decals from your vehicles and return all used and unused decals to us.

Roadside enforcement of carriers with a suspended or revoked IFTA licence can vary between member jurisdictions. Action could include:

  • requiring that you purchase a motive fuel user permit or the equivalent in another jurisdiction
  • issuing you a citation or fine, or 
  • impounding your vehicles until your IFTA licence is reinstated

Reinstatements

We may reinstate your suspended or revoked IFTA licence once you have filed your IFTA returns and paid the taxes due. If you’re reinstated, we’ll notify you and all member jurisdictions of your reinstatement. 

It may take up to 30 calendar days from the date you submit complete information and pay all outstanding taxes for your account to be reinstated.

Cancelling your licence

You may voluntarily cancel your IFTA licence if you have filed all required IFTA returns and paid any tax due. If you cancel your licence, you need to return your original IFTA licence to us and remove all IFTA credentials from your vehicles, including decals and licences. 

To cancel your IFTA licence, check "Cancel IFTA Licence" on your final IFTA tax return.

Record keeping and audits

You need to keep records that support the information on your IFTA Carrier Returns. If you don’t keep records or pay the tax due, it may result in an assessment for the unpaid tax, plus penalty and interest charges. 

Under IFTA, you need to keep records for four years after you file your return.

You must keep:

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Decal logbooks

You must keep a logbook detailing the IFTA decals you are issued, with the dates and vehicles that the decals are attached to.

 

Distance records

You must keep complete and accurate travel records. The records (known as the trip report) must detail the extent of travel in each jurisdiction and support the information reported on your IFTA tax return. 

Each trip report must show: 

  • Trip start date and end date
  • Trip origin and destination (including city and province or state) 
  • Routes of travel with odometer readings at the start and end
  • Total trip kilometres
  • Total distance by jurisdiction 
  • Vehicle unit or vehicle identification number 
  • Vehicle fleet number
  • Carrier name
 

Fuel records

You must keep complete and accurate records of all fuel purchased, received, and used by your IFTA decaled vehicles. Compile separate totals for each fuel type. Maintain separate records for retail and bulk purchases. 

Authorized fuel types include: 

  • gasoline
  • diesel
  • propane
  • blended fuels (e.g. gasohol and ethanol)
  • compressed natural gas
  • liquid petroleum
  • kerosene

Note: Coloured fuel is not authorized for use in “P” plated vehicles in B.C. and most other IFTA jurisdictions. If you are found using coloured fuel, you may be subject to assessments or penalties.

 

Fuel receipts

You must keep invoices or receipts to receive credit for tax-paid purchases. An invoice or receipt for tax-paid purchases must include: 

  • Date of purchase
  • Seller’s name and address
  • Number of litres purchased
  • Fuel type
  • Price per litre or total amount of sale
  • Fleet unit number
  • Purchaser’s name

Note: If you cannot prove taxes were paid (for example, you lost the receipt or you purchased fuel on First Nations lands without paying provincial or state fuel taxes), you must still report the fuel purchased but you cannot claim the taxes

 

Bulk storage fuel records

If you have a bulk fuel storage facility and you have fuel delivered, your fuel records must contain: 

  • Date of each fuel delivery
  • Name and address of the person you purchased or received the fuel from
  • Number of litres received
  • Type of fuel
  • Plate or ID number of the vehicle or equipment the fuel was placed in

To receive a credit on fuel you use from your tax-paid bulk storage, you must keep purchase and inventory records to show that tax was paid on all bulk purchases, and keep records of: 

  • Date of withdrawal
  • Number of litres
  • Fuel type
  • Fleet unit number

Audits

If you’re selected for an IFTA audit, your base jurisdiction will conduct the audit on behalf of all member jurisdictions. You must make all your records available to the auditor. 

After the audit is completed, you and any affected member jurisdictions will receive an audit report. Your base jurisdiction collects and remits any tax, penalty and interest you owe to other member jurisdictions.

If you do not make records available to us, or you did not maintain appropriate records, we will estimate your liability. The estimate may be based on:

  • your filing history (past fuel consumption and distances travelled) 
  • records received from third parties 
  • industry data, or 
  • IFTA’s standard of 1.7 kilometres per litre 

The estimate is a final determination. However, you may submit an appeal.

For more information about audits, see Bulletin CTB 003, Audits (PDF, 208KB).

Leased motor vehicles and contract agreements

The IFTA requirements are the same if you lease or own an IFTA commercial vehicle. However, it may be the lessor’s responsibility to report and pay fuel taxes in some situations. 

Learn who is responsible for reporting and paying fuel taxes when dealing with:

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Rental or leasing companies

Rental or leasing companies (lessors) are companies that rent out an IFTA commercial vehicle without a driver.

Short term leases (29 days or less)
The lessor is responsible for reporting and paying fuel taxes unless the following two conditions are met: 

  • The lessor has a written rental contract that designates the lessee as the party responsible for reporting and paying the fuel tax, and
  • The lessor has a copy of the lessee's IFTA licence, which is valid for the term of the rental

Long term leases (30 days or more)
The lessee is responsible for reporting and paying fuel taxes. However, the lessor may apply to us to be deemed the licensee and, if approved, the lessor is responsible for reporting and paying the fuel taxes. 

 

Independent contractors (owner/operators) 

Independent contractors differ from rental or leasing companies in that they rent out both the IFTA commercial vehicle and the driver.

Short term leases (29 days or less)
The lessor (independent contractor, agent or service representative) is responsible for reporting and paying fuel taxes. 

Long term leases (30 days or more)
The lessee is responsible for reporting and paying fuel taxes unless a written contract specifies that the lessor (independent contractor, agent or service representative) is responsible. 

 

Household goods carriers

Household goods carriers (such as moving companies) have separate rules when under intermittent leases. These rules cover situations where a moving company hires a subcontractor to move household goods to another jurisdiction. 

The lessee (household goods carrier) is responsible for reporting and paying fuel taxes when the IFTA commercial vehicle is being operated under the lessee's jurisdictional operating authority. 

The lessor is responsible for reporting and paying fuel tax when the IFTA commercial vehicle is operated under the lessor's jurisdictional operating authority. 

Example:

A moving company is hired to move household goods from Vancouver to Calgary. The moving company then hires an independent contractor to move the household goods. The moving company (lessee) is responsible for reporting and paying fuel taxes since the IFTA commercial vehicle is operated under its authority. 

Once the goods are delivered, the trip back by the independent contractor is under the independent contractor's authority, unless it rents out its IFTA commercial vehicle and driver to another moving company. The responsible party on the trip back is the lessor (independent contractor) if:

  • the IFTA commercial vehicle comes back empty, or 
  • the independent contractor arranges for its own haul 

However, if the independent contractor is hired by a second moving company on the return trip, that second moving company is responsible for reporting and paying the fuel tax.

Appeals

You may appeal to the Minister of Finance for:

  • A refusal to issue or renew an IFTA licence
  • A suspension or revocation of an IFTA licence
  • A disallowed refund
  • An audit assessment issued by the ministry

Your appeal must be received by the minister within 90 days after a notice of decision has been sent to you. If the appeal is not made within 90 days, the decision is considered final.

After the appeal decision, if you still disagree with audit findings, you may request any or all member jurisdictions to audit your records. Each jurisdiction may accept or deny the request. Jurisdictions auditing your records will audit only their portion of your operations. You must make records available at a place designated by the requesting member jurisdiction.

For more information, see Bulletin GEN 002, Appeals (PDF, 149KB).

Summary of your responsibilities

To keep your licence in good standing and comply with IFTA requirements, you must:

IFTA licence and decals

  • Properly distribute and account for the IFTA licence and decals (for example, maintain a log of issued decals)
  • Display a decal on each side of the exterior of the cab. Instructions for the placement of decals are on the back of each set of decals
  • Keep the IFTA licence, or a photocopy of the licence, inside the cab. Carrying an electronic image of your IFTA licence is also acceptable. If carrying an electronic image of your IFTA licence, save it to your device in case you have no access to the internet

IFTA Carrier Returns

  • File a quarterly return online using eTaxBC to report the number of kilometres you travelled and the fuel purchased in each jurisdiction for all your IFTA decaled vehicles
  • Pay any tax owing by the due date. The easiest way to pay is through eTaxBC using the PAD payment option. Other payment options include:
    • By mail with a cheque or money order (payable in Canadian funds to the Minister of Finance)
    • Electronic funds transfer (EFT)
    • Bill payment service through your bank

Note: You cannot pay by credit card.

Quarterly due dates for your IFTA Carrier Return and payment
Quarter Reporting period Due date
1st January to March April 30
2nd April to June July 31
3rd July to September October 31
4th October to December January 31

Your payment must be negotiable on or before the due date to be considered on time.

Records

  • Maintain complete and accurate records of fuel purchases and all distances travelled for your IFTA decaled vehicles. Distances travelled must be reconciled to odometer or hub odometer readings
  • Retain all records for a minimum of four years after you file your return
  • Inform us of any business name, address, owner, partner or corporate officer changes

Related resources

Contact information

Contact us with questions about IFTA licensing and registration in B.C.

For more information about IFTA, including member jurisdictions visit iftach.org

(within Canada and the U.S.A.) Toll Free
1-877-388-4440
Office
1-250-410-0373

FuelTax@gov.bc.ca