Class Ruling CR 2016/47
Date of effect: 1 April 2016

What this ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the relevant provision(s) identified below apply to the defined class of entities, who take part in the scheme to which this Ruling relates. Relevant provision(s) 2. The relevant provisions dealt with in this Ruling are: Class of entities 3. The class of entities to which this Ruling applies is the customers of Intellitrac Pty Ltd as trustee for The Calapai Family Trust trading as IntelliTrac (IntelliTrac) who use the IntelliTrac FBT e-Logbook for the purposes of section 10 of the FBTAA or Subdivision 28-F of the ITAA 1997. Qualifications 4. The Commissioner makes this Ruling based on the precise scheme as identified in this Ruling. 5. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 8 to 14 of this Ruling. 6. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then:

Class of entities or scheme: 3. The class of entities to which this Ruling applies is the customers of Intellitrac Pty Ltd as trustee for The Calapai Family Trust trading as IntelliTrac (IntelliTrac) who use the IntelliTrac FBT e-Logbook for the purposes of section 10 of the FBTAA or Subdivision 28-F of the ITAA 1997. | Qualifications: 4. The Commissioner makes this Ruling based on the precise scheme as identified in this Ruling. 5. The class of entities defined in this Ruling may rely on its contents provided the scheme actually carried out is carried out in accordance with the scheme described in paragraphs 8 to 14 of this Ruling. 6. If the scheme actually carried out is materially different from the scheme that is described in this Ruling, then: 7. This Ruling applies from 1 April 2016. However, this Ruling will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). 8. The following description of the scheme is based on information provided by the applicant. 9. The IntelliTrac FBT Electronic Logbook System (the IntelliTrac System) was developed as a means of recording car log book entries. 10. The IntelliTrac System consists of the following components: 11. At the time of installing the IntelliTrac System, an initial odometer reading from the car is recorded in the database. 12. The IntelliTrac System has the following four methods for recording whether a journey undertaken is business or private and the purpose of any business journeys: 13. An IntelliTrac customer will be able to use the IntelliTrac System to produce, in English, an FBT e-Logbook for any selected period for each car that has the system fitted. 14. The FBT e-Logbook will provide the following information for each journey undertaken during the e-Logbook period: The following information will also be provided: 15. The IntelliTrac FBT e-Logbook described in paragraph 14 of this Ruling will satisfy the definition of log book records in subsection 136(1) of the FBTAA provided: 16. The IntelliTrac FBT e-Logbook as described in paragraph 14 of this Ruling will satisfy the requirements of section 28-125 of the ITAA 1997 provided: Commissioner of Taxation 29 June 2016 | Does the IntelliTrac FBT e-Logbook satisfy the definition of log book records in subsection 136(1) of the FBTAA?: 17. Section 10 of the FBTAA allows an employer to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 18. Where this election is made, subsection 10(2) of the FBTAA provides that the taxable value of the car fringe benefit will be the amount calculated in accordance with the formula: (Cx(100% - BP)) - R Where: C is the operating cost of the car during the holding period; BP is: (a) if, under sections 10A or 10B, the employer is not entitled to a reduction in the operating cost of the car on account of business journeys undertaken in the car during the holding period - nil; or (b) not applicable (Omitted by No 145 of 1995) (c) In any other case - the business use percentage applicable to the car for the holding period; and Where: C is the operating cost of the car during the holding period; BP is: R is the amount (if any) of the recipient's payment. 19. Therefore, an employer intending to claim a reduction in the operating costs of a car, on account of business journeys undertaken during the holding period, must meet the requirements of section 10A of the FBTAA (if the year is a log book year of tax), or section 10B of the FBTAA (if the year is not a log book year of tax). 20. Subsection 162G(1) of the FBTAA sets out the circumstances in which a year will be a log book year of tax. The circumstances include a year in which an election is made to treat the year as a log book year of tax. 21. An IntelliTrac customer who uses the Intellitrac System to record details of the journeys undertaken in a car during a particular year will be regarded as making an election for the year to be a log book year of tax. 22. Section 10A of the FBTAA requires that in a log book year: 23. For the purposes of this Ruling it is only necessary to consider the first of these requirements. | Log book records: 24. Subsection 136(1) of the FBTAA defines log book records as follows: 25. In considering these conditions, the Intellitrac Telematics Device records the data for each trip undertaken in the car. Therefore, it will record information in respect of each business journey. The other requirements of the definition of log book records are considered below. The date on which the journey began and the date on which it ended 26. Paragraph (c) of the definition of log book records requires each entry to detail the dates on which the business journey began and ended. This requirement is met as the Intellitrac FBT e-Logbook provides details of the time and date on which each journey began and ended. The respective odometer readings of the car at the beginning and end of the journey 27. Paragraph (d) of the definition of log book records requires that the respective odometer readings of the car at the beginning and end of each journey be entered into the relevant records. 28. The term odometer is not defined in either the FBTAA of the ITAA 1997 but The Macquarie Dictionary, online edition, defines that term as being 'an instrument for measuring distance passed over, as by a motor vehicle'. 29. However, the definition of odometer records in subsection 136(1) of the FBTAA makes reference to the 'odometer reading of the car'. In this regard, it is concluded that, whilst odometer readings must pertain to the car, it does not necessarily mean that they must also be attributable either wholly or in part to the rotation of the car's wheels. 30. Provided the device used to determine the car's odometer readings is of sufficient integrity it can be accepted that a system other than the car's own odometer may meet the FBTAA legislative requirements. 31. The initial odometer reading of the car is recorded in the database at the time that the IntelliTrac System is installed. 32. Each time the car is driven, the GPS Telematics Device records the distance travelled during that journey. In this way the respective start and end odometer reading of the car for each journey is recorded for the Intellitrac FBT e-Logbook. It is accepted that the opening and closing odometer readings calculated are of sufficient integrity. 33. Therefore, the Intellitrac FBT e-Logbook will satisfy the requirements of paragraph (d) of the definition of log book records. The number of kilometres travelled by the car in the course of the journey 34. Paragraph (e) of the definition of log book records requires the number of kilometres travelled by the car in the course of each business journey to be shown. This requirement is met as the Intellitrac FBT e-Logbook shows the total distance travelled for each journey. The purpose or purposes of the journey 35. Paragraph (f) of the definition of log book records requires that the purpose or purposes of each business journey be recorded. To enable this requirement to be met the user is able to input the purpose of a journey at the beginning or end of that journey as follows: Made in the English language at, or as soon as reasonably practicable after, the end of the journey 36. In addition, the definition of log book records requires each of the entries to be made in the English language at, or as soon as reasonably practical after, the end of the journey. 37. The first of these requirements is met as the entries are recorded in English. 38. Generally, the second of these requirements will be met as, depending on the method used, at the beginning or the end of the journey the user will record the purpose of the journey. However, there may be occasions on which it is not practical to enter this information at the end of the journey. Provided that the purpose of each journey is recorded on at least a weekly basis, it will be accepted that the entries were made as soon as practical after the end of the journey. Conclusion 39. The IntelliTrac FBT e-Logbook will satisfy the requirements of the definition of log book records in subsection 136(1) of the FBTAA provided the purpose of any journey classified as being a business journey is entered within the week of the journey occurring and is sufficiently descriptive to enable the journey to be classified as a business journey. | Applicable log book period: 40. As set out in paragraph 22 of this Ruling, the log book records must be maintained for an applicable log book period. Subsection 162H(1) of the FBTAA provides that the applicable log book period will be a continuous 12 week period, unless the car is held for less than 12 weeks. If the car is held for less than 12 weeks, the applicable log book period is the period for which the car was held. | Does the IntelliTrac FBT e-Logbook satisfy the requirements of section 28-125 of the ITAA 1997?: 41. Division 28 of the ITAA 1997 provides four methods that can be used by an individual or alternatively by a partnership (that includes at least one individual) to calculate the amount of the income tax deduction that can be claimed for car expenses. 42. One of the methods is the 'log book' method which is contained in Subdivision 28-F of the ITAA 1997. To be able to use this method, the substantiation requirements set out in section 28-100 of the ITAA 1997 must be met. 43. Section 28-100 of the ITAA 1997 requires: 44. For the purpose of this Ruling it is only necessary to consider the second of these requirements. | Log book requirements in Subdivision 28-G of the ITAA 1997: 45. Section 28-115 of the ITAA 1997 sets out the circumstances in which a log book will need to be kept. The circumstances include the making of a decision to keep a log book in a year in which it is not otherwise required to be kept. 46. In using the IntelliTrac System to record the details of journeys undertaken in a particular year an IntelliTrac customer will be taken to have chosen to keep a log book for the year. 47. Section 28-120 of the ITAA requires that log book to cover a continuous period of 12 weeks, unless the car is held for less than 12 weeks. If the car is held for less than 12 weeks, the log book must be kept for the period for which the car was held. 48. Section 28-125 of the ITAA 1997 sets out the way in which a log book is to be kept. Section 28-125 states: 49. In considering these conditions, the Intellitrac Telematics Device records data for each trip undertaken in the car. Therefore, it complies with subsection 28-125(1) of the ITAA 1997. The requirements of subsection 28-125(2) of the ITAA 1997 are considered below. The day the journey began and the day it ended 50. Paragraph 28-125(2)(a) of the ITAA 1997 requires the day the journey began and the day it ended to be entered for each journey. This requirement is met as the IntelliTrac FBT e-Logbook provides details of the time and date on which each business journey began and ended. The car's odometer readings at the start and end of the journey 51. Paragraph 28-125(2)(b) of the ITAA 1997 requires the car's odometer readings at the start and end of each journey to be recorded. As discussed at paragraphs 27 to 33 of this Ruling in relation to paragraph (d) of the definition of log book records in subsection 136(1) of the FBTAA, the odometer readings detailed in the IntelliTrac FBT e-Logbook will be accepted as being the odometer readings for the start and end of each journey. How many kilometres the car travelled on the journey 52. Paragraph 28-125(2)(c) of the ITAA 1997 requires the number of kilometres travelled by the car in the course of each business journey to be shown. This requirement is met as the IntelliTrac FBT e-Logbook shows the total number of kilometres travelled during each trip. Why the journey was made 53. Paragraph 28-125(2)(d) of the ITAA 1997 requires the reason for the journey to be shown. As discussed at paragraph 35 of this Ruling the user is able to input the purpose of the journey, depending on the method used, at the beginning or end of the journey. Therefore, this requirement will be met if the reason that is input for the journey is sufficiently descriptive to enable the journey to be classified as a business journey. The record must be made at the end of the journey or as soon as possible afterwards 54. In addition, subsection 28-125(2) of the ITAA 1997 requires the entries to be made at, or as soon as possible after the end of the journey. As discussed at paragraph 38 of this Ruling, provided the driver enters the purpose of each journey at the end of each journey, or at least on a weekly basis, it is accepted that the entries were made as soon as practicable after the end of the journey. Details to be entered into the log book 55. Subsection 28-125(4) of the ITAA 1997 requires the following details to be entered into the log book: 56. The IntelliTrac FBT e-Logbook will satisfy each of these requirements as it provides: Entries to be made at or as soon as possible after the start or the end of the period, as appropriate, and in the English language 57. In addition, subsection 28-125(4) of the ITAA 1997 requires each of the entries to be made at, or as soon as possible after the start or end of the period as appropriate and subsection 28-125(5) of the ITAA 1997 requires each entry to be in English. 58. Generally, the first of these requirements will be met as at the end of each journey the driver will record the purpose of the journey. This will be done as follows: However, there may be occasions on which it is not practical to enter this information at the end of the journey. Provided the purpose of each journey is recorded on at least a weekly basis, it will be accepted that the entries were made as soon as practical after the end of the journey. 59. The requirement at subsection 28-125(5) of the ITAA 1997 is met as the entries are recorded in English. Conclusion 60. The Intellitrac FBT e-Logbook will satisfy the requirements of section 28-125 of the ITAA 1997 provided: 61. The following is a detailed contents list for this Ruling: © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Ruling: 15. The IntelliTrac FBT e-Logbook described in paragraph 14 of this Ruling will satisfy the definition of log book records in subsection 136(1) of the FBTAA provided: 16. The IntelliTrac FBT e-Logbook as described in paragraph 14 of this Ruling will satisfy the requirements of section 28-125 of the ITAA 1997 provided: Commissioner of Taxation 29 June 2016


Appendix: Does the IntelliTrac FBT e-Logbook satisfy the definition of log book records in subsection 136(1) of the FBTAA?: 17. Section 10 of the FBTAA allows an employer to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 18. Where this election is made, subsection 10(2) of the FBTAA provides that the taxable value of the car fringe benefit will be the amount calculated in accordance with the formula: (Cx(100% - BP)) - R Where: C is the operating cost of the car during the holding period; BP is: (a) if, under sections 10A or 10B, the employer is not entitled to a reduction in the operating cost of the car on account of business journeys undertaken in the car during the holding period - nil; or (b) not applicable (Omitted by No 145 of 1995) (c) In any other case - the business use percentage applicable to the car for the holding period; and Where: C is the operating cost of the car during the holding period; BP is: R is the amount (if any) of the recipient's payment. 19. Therefore, an employer intending to claim a reduction in the operating costs of a car, on account of business journeys undertaken during the holding period, must meet the requirements of section 10A of the FBTAA (if the year is a log book year of tax), or section 10B of the FBTAA (if the year is not a log book year of tax). 20. Subsection 162G(1) of the FBTAA sets out the circumstances in which a year will be a log book year of tax. The circumstances include a year in which an election is made to treat the year as a log book year of tax. 21. An IntelliTrac customer who uses the Intellitrac System to record details of the journeys undertaken in a car during a particular year will be regarded as making an election for the year to be a log book year of tax. 22. Section 10A of the FBTAA requires that in a log book year: 23. For the purposes of this Ruling it is only necessary to consider the first of these requirements. | Log book records: 24. Subsection 136(1) of the FBTAA defines log book records as follows: 25. In considering these conditions, the Intellitrac Telematics Device records the data for each trip undertaken in the car. Therefore, it will record information in respect of each business journey. The other requirements of the definition of log book records are considered below. The date on which the journey began and the date on which it ended 26. Paragraph (c) of the definition of log book records requires each entry to detail the dates on which the business journey began and ended. This requirement is met as the Intellitrac FBT e-Logbook provides details of the time and date on which each journey began and ended. The respective odometer readings of the car at the beginning and end of the journey 27. Paragraph (d) of the definition of log book records requires that the respective odometer readings of the car at the beginning and end of each journey be entered into the relevant records. 28. The term odometer is not defined in either the FBTAA of the ITAA 1997 but The Macquarie Dictionary, online edition, defines that term as being 'an instrument for measuring distance passed over, as by a motor vehicle'. 29. However, the definition of odometer records in subsection 136(1) of the FBTAA makes reference to the 'odometer reading of the car'. In this regard, it is concluded that, whilst odometer readings must pertain to the car, it does not necessarily mean that they must also be attributable either wholly or in part to the rotation of the car's wheels. 30. Provided the device used to determine the car's odometer readings is of sufficient integrity it can be accepted that a system other than the car's own odometer may meet the FBTAA legislative requirements. 31. The initial odometer reading of the car is recorded in the database at the time that the IntelliTrac System is installed. 32. Each time the car is driven, the GPS Telematics Device records the distance travelled during that journey. In this way the respective start and end odometer reading of the car for each journey is recorded for the Intellitrac FBT e-Logbook. It is accepted that the opening and closing odometer readings calculated are of sufficient integrity. 33. Therefore, the Intellitrac FBT e-Logbook will satisfy the requirements of paragraph (d) of the definition of log book records. The number of kilometres travelled by the car in the course of the journey 34. Paragraph (e) of the definition of log book records requires the number of kilometres travelled by the car in the course of each business journey to be shown. This requirement is met as the Intellitrac FBT e-Logbook shows the total distance travelled for each journey. The purpose or purposes of the journey 35. Paragraph (f) of the definition of log book records requires that the purpose or purposes of each business journey be recorded. To enable this requirement to be met the user is able to input the purpose of a journey at the beginning or end of that journey as follows: Made in the English language at, or as soon as reasonably practicable after, the end of the journey 36. In addition, the definition of log book records requires each of the entries to be made in the English language at, or as soon as reasonably practical after, the end of the journey. 37. The first of these requirements is met as the entries are recorded in English. 38. Generally, the second of these requirements will be met as, depending on the method used, at the beginning or the end of the journey the user will record the purpose of the journey. However, there may be occasions on which it is not practical to enter this information at the end of the journey. Provided that the purpose of each journey is recorded on at least a weekly basis, it will be accepted that the entries were made as soon as practical after the end of the journey. Conclusion 39. The IntelliTrac FBT e-Logbook will satisfy the requirements of the definition of log book records in subsection 136(1) of the FBTAA provided the purpose of any journey classified as being a business journey is entered within the week of the journey occurring and is sufficiently descriptive to enable the journey to be classified as a business journey. | Applicable log book period: 40. As set out in paragraph 22 of this Ruling, the log book records must be maintained for an applicable log book period. Subsection 162H(1) of the FBTAA provides that the applicable log book period will be a continuous 12 week period, unless the car is held for less than 12 weeks. If the car is held for less than 12 weeks, the applicable log book period is the period for which the car was held. | Does the IntelliTrac FBT e-Logbook satisfy the requirements of section 28-125 of the ITAA 1997?: 41. Division 28 of the ITAA 1997 provides four methods that can be used by an individual or alternatively by a partnership (that includes at least one individual) to calculate the amount of the income tax deduction that can be claimed for car expenses. 42. One of the methods is the 'log book' method which is contained in Subdivision 28-F of the ITAA 1997. To be able to use this method, the substantiation requirements set out in section 28-100 of the ITAA 1997 must be met. 43. Section 28-100 of the ITAA 1997 requires: 44. For the purpose of this Ruling it is only necessary to consider the second of these requirements. | Log book requirements in Subdivision 28-G of the ITAA 1997: 45. Section 28-115 of the ITAA 1997 sets out the circumstances in which a log book will need to be kept. The circumstances include the making of a decision to keep a log book in a year in which it is not otherwise required to be kept. 46. In using the IntelliTrac System to record the details of journeys undertaken in a particular year an IntelliTrac customer will be taken to have chosen to keep a log book for the year. 47. Section 28-120 of the ITAA requires that log book to cover a continuous period of 12 weeks, unless the car is held for less than 12 weeks. If the car is held for less than 12 weeks, the log book must be kept for the period for which the car was held. 48. Section 28-125 of the ITAA 1997 sets out the way in which a log book is to be kept. Section 28-125 states: 49. In considering these conditions, the Intellitrac Telematics Device records data for each trip undertaken in the car. Therefore, it complies with subsection 28-125(1) of the ITAA 1997. The requirements of subsection 28-125(2) of the ITAA 1997 are considered below. The day the journey began and the day it ended 50. Paragraph 28-125(2)(a) of the ITAA 1997 requires the day the journey began and the day it ended to be entered for each journey. This requirement is met as the IntelliTrac FBT e-Logbook provides details of the time and date on which each business journey began and ended. The car's odometer readings at the start and end of the journey 51. Paragraph 28-125(2)(b) of the ITAA 1997 requires the car's odometer readings at the start and end of each journey to be recorded. As discussed at paragraphs 27 to 33 of this Ruling in relation to paragraph (d) of the definition of log book records in subsection 136(1) of the FBTAA, the odometer readings detailed in the IntelliTrac FBT e-Logbook will be accepted as being the odometer readings for the start and end of each journey. How many kilometres the car travelled on the journey 52. Paragraph 28-125(2)(c) of the ITAA 1997 requires the number of kilometres travelled by the car in the course of each business journey to be shown. This requirement is met as the IntelliTrac FBT e-Logbook shows the total number of kilometres travelled during each trip. Why the journey was made 53. Paragraph 28-125(2)(d) of the ITAA 1997 requires the reason for the journey to be shown. As discussed at paragraph 35 of this Ruling the user is able to input the purpose of the journey, depending on the method used, at the beginning or end of the journey. Therefore, this requirement will be met if the reason that is input for the journey is sufficiently descriptive to enable the journey to be classified as a business journey. The record must be made at the end of the journey or as soon as possible afterwards 54. In addition, subsection 28-125(2) of the ITAA 1997 requires the entries to be made at, or as soon as possible after the end of the journey. As discussed at paragraph 38 of this Ruling, provided the driver enters the purpose of each journey at the end of each journey, or at least on a weekly basis, it is accepted that the entries were made as soon as practicable after the end of the journey. Details to be entered into the log book 55. Subsection 28-125(4) of the ITAA 1997 requires the following details to be entered into the log book: 56. The IntelliTrac FBT e-Logbook will satisfy each of these requirements as it provides: Entries to be made at or as soon as possible after the start or the end of the period, as appropriate, and in the English language 57. In addition, subsection 28-125(4) of the ITAA 1997 requires each of the entries to be made at, or as soon as possible after the start or end of the period as appropriate and subsection 28-125(5) of the ITAA 1997 requires each entry to be in English. 58. Generally, the first of these requirements will be met as at the end of each journey the driver will record the purpose of the journey. This will be done as follows: However, there may be occasions on which it is not practical to enter this information at the end of the journey. Provided the purpose of each journey is recorded on at least a weekly basis, it will be accepted that the entries were made as soon as practical after the end of the journey. 59. The requirement at subsection 28-125(5) of the ITAA 1997 is met as the entries are recorded in English. Conclusion 60. The Intellitrac FBT e-Logbook will satisfy the requirements of section 28-125 of the ITAA 1997 provided:


What this Ruling is about | NOT LEGALLY BINDING SECTION: | A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. | If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. | is made in the English language at, or as soon as reasonably practicable after, the end of the journey. | The car's odometer readings at the start and the end of the journey | Entries to be made at or as soon as possible after the start or end of the period, as appropriate, and in the English language | Appendix 2 - Detailed contents list


Related rulings: TR 2006/10
Legislative references: FBTAA 1986 FBTAA 1986 10 FBTAA 1986 10(2) FBTAA 1986 10A FBTAA 1986 10B FBTAA 1986 136(1) FBTAA 1986 162G(1) FBTAA 1986 162H(1) ITAA 1997 ITAA 1997 Div 28 ITAA 1997 Subdiv 28-F ITAA 1997 Subdiv 28-G ITAA 1997 Subdiv 28-H ITAA 1997 28-100 ITAA 1997 28-115 ITAA 1997 28-120 ITAA 1997 28-125 ITAA 1997 28-125(1) ITAA 1997 28-125(2) ITAA 1997 28-125(2)(a) ITAA 1997 28-125(2)(b) ITAA 1997 28-125(2)(c) ITAA 1997 28-125(2)(d) ITAA 1997 28-125(4) ITAA 1997 28-125(5) ITAA 1997 Subdiv 900-C TAA 1953
Other references: Macquarie Dictionary, online edition