Excise duty refund on diesel – who? And especially how much?
Self-employed people don’t always know this, but there is a refund that can be claimed for all of their diesel consumption.
This tax is called excise tax and it is collected automatically in the tax invoice.
The amount of the tax is about three shekels per liter, and therefore the excise duty refund can sometimes be very significant for the dealer who is entitled to it.
Who is eligible? How much am I entitled to? how do you get a refund?
These are exactly the questions I want to address in this article.
First, we will refer to the conditions that qualifies a dealer for excise duty reimbursement:
First of all, the dealer must be registered as an “authorized dealer” in VAT.
Second, he must be the owner of vehicles/equipment whose use is to generate income and of course he must receive a tax invoice for the diesel fuel as is accepted by law.
In this matter, it is important to note that if it is a rented vehicle or equipment, it is possible to be entitled to a refund, but there is a duty of proof on the dealer to prove the rental and declare it as accepted by law.
Now we will list the different categories that define the right to a refund:
• Mechanical / engineering equipment that runs on diesel fuel and is used by an industrial plant for its current work.
• A fishing vessel that runs on diesel and not gasoline.
• A motor vehicle as specified in the law – a commercial vehicle weighing over 10 tons with a driver’s license, a commercial vehicle over 4.5 tons but under 10 tons, a bus over 5 tons, a tractor used for agricultural purposes / a motor vehicle with a valid license used as a taxi, a minibus or a vehicle used for driving lessons .
The way to receive the refund is simple in essence, but the lack of knowledge prevailing in the public is the reason that not all those entitled receive the refund.
As soon as a vehicle is registered in the name of the business and is used to generate income in accordance with the above conditions, the amount of liters consumed by the dealer can be calculated and a request for reimbursement can be submitted.
The amount of the excise tax refund varies from one field of activity to another and the authorities publish the percentage of the excise tax refund for each month of the year.
The report is submitted during the month following the reporting period, where the reporting period is between two months for those reporting more than five vehicles and four months for those reporting less than five vehicles.
As with any refund, here too there is an annual ceiling that can be claimed for the refund and it is determined according to the weight of the vehicle / equipment.
In summary: a licensed dealer who meets the conditions we specified is entitled to a refund of excise tax on the diesel that was used to generate income. The way to do this is simple and does not require special effort because the invoices are collected for the purpose of VAT refunds as part of the self-employed’s daily conduct.
So if you meet the criteria we mentioned, great, contact us and we will help you get your refund, after all we pay so much taxes to the state, it’s time to get some back as well.