Learn about Fuel Acquisition Permits (FAPs) if you’re a current holder or looking to get one.

Get a Fuel Acquisition Permit

In general, all clear fuel purchased or used in Ontario is subject to fuel tax. Coloured fuel may be purchased tax-free for any non-taxable use, such as lighting, heating, or cooking.

A Fuel Acquisition Permit allows you, as a registered consumer, to buy clear fuel without tax for specific approved uses. You must use the fuel only for the purpose listed on your permit.

Download the application to register for a Fuel Acquisition Permit

All registered consumers must follow the general rules set out in the Fuel Tax Act. We may also add conditions or limits to your FAP based on how you plan to use the fuel.

Use of untaxed clear fuel under a FAP

FAP holders may buy clear fuel without paying fuel tax if they will be using the fuel in one or more of the following ways and have a FAP for that purpose:

  • in the operation of railway equipment on rails where the railway equipment is operated in connection with and as part of a public transportation system
  • in the operation of railway maintenance equipment that is used only on rails for the maintenance of a public transportation system
  • as a raw material to be wrought into or become part of goods for sale, provided that the fuel is not used to generate power in a motor vehicle
  • in the curing of tobacco
  • in the bench testing of an aircraft engine before installation of the engine on an aircraft
  • in the testing of a motor vehicle engine before installation of the engine in a motor vehicle
  • in the development and quality assurance testing of fuel
  • bulk 1-K kerosene to be packaged in containers of not more than 210 litres each for resale to consumers for unvented lighting, heating or cooking purposes, but not to generate power in a motor vehicle

Sales by a non-collector to a FAP holder

Non-collectors must pay tax

Dealers who are not designated fuel tax collectors must pay the tax on clear fuel purchased from their suppliers. This clear fuel may in turn be resold, untaxed, to a FAP holder.

Responsibilities of a non-collector

Dealers must ensure that at the time of sale, registered consumers produce valid FAPs and that all the permit conditions, within the dealer's control, are met. Invoices must show the purchaser's FAP number and the delivery address.

Refunds on overpayments

If dealers sell fuel to FAP holders and do not collect fuel tax, the dealers can apply for refunds of the tax they overpaid to their suppliers.

Another option is for the dealers to get the tax back from their suppliers, if those suppliers are fuel tax collectors and agree to give the refund on our behalf. If suppliers give refunds, their responsibilities for the sales will be the same as if they sold the fuel directly to the FAP holders.

Sales by a collector to a FAP holder

Collector's responsibilities

Designated fuel tax collectors may sell untaxed clear fuel to FAP holders who are entitled to receive the product without paying tax.

At the time of sale, you must:

  • confirm the purchasers present valid FAPs
  • verify that all the permit conditions within your ability to confirm are met

You must report these sales on your monthly return.

Invoices delivered to purchasers must include:

  • your registration number
  • the purchaser's FAP number
  • the delivery address

Tax to be collected if valid FAP not produced

If purchasers do not produce FAPs for inspection by collectors at the time of purchase, the collectors must collect the tax as if the purchasers were not registered consumers.

Due diligence

Collectors, as agents of the Minister, are required to exercise due diligence to ensure that untaxed clear fuel sold is not for a taxable use.

Collectors will not be held responsible for fuel tax on clear fuel delivered to FAP holders in accordance with valid FAPs, where the collector maintains all the following:

  • a copy of the FAP valid for the time in question
  • copies of all bills of lading, uniform manifests, or invoices indicating the volume of fuel delivered to the FAP holder at the authorized location(s) during that time
  • certification of the fuel delivery by the driver(s)

FAP Holder requirements and restrictions

Security

FAP holders must post security in an amount equal to the tax that, except for the FAP, would have been payable on their average three months receipts of clear fuel, or $100,000.00, whichever is greater.

General restriction

FAP holders must not use fuel acquired under FAPs for any purpose other than the purposes stated by the permits and must ensure that the conditions stated in the permits are met.

Requirement to produce FAP

FAP holders must produce their FAPs to their suppliers at the time of purchase or pay the tax.

Reporting requirement

FAP holders must, by the 25th of each month, or as otherwise directed, file fuel tax returns (Form FT814), which report all fuel acquired under the FAP. Form FT814 also reports the fuel consumed or disposed of in the preceding calendar month.

Guide for Completing the Fuel Acquisition Permit Holder Return FT814

FAPs are not transferable

FAP holders must immediately notify us of any change of name or nature of their businesses, or in case of the loss or destruction of the FAP.

Penalties for noncompliance

Failure to comply with the Act or regulations, or failure to abide by a condition, or a limitation under a FAP can result in a fine of up to $10,000. This fine is in addition to our assessment for fuel tax, penalties and interest, and suspension or cancellation of the permit.

Contact us

If this webpage does not completely address your particular situation, refer to the Fuel Tax Act and related regulations or contact us at:

Ministry of Finance
Account Management and Collections Branch
33 King Street West
PO Box 625
Oshawa ON L1H 8H9