Class Ruling CR 2021/16

What this ruling is about: 1. This Ruling sets out when the MiX Telematics Australasia Pty Ltd (MiX Telematics) Fleet Manager systems (FMS) and the in-Vehicle Monitoring System (IVMS) can be utilised to reduce the operating costs in both a logbook and non-logbook year for the purpose of calculating the taxable value of a car fringe benefit using the cost-basis method. 2. Broadly, sections 10A and 10B of the Fringe Benefits Tax Assessment Act 1986 [1] allow an employer to reduce the operating cost of a car for business journeys that are undertaken in the car during the period in which the car was held (either by the employer or another person). Such a reduction can only occur where certain conditions are met. 3. Full details of the MiX Telematics FMS and the IVMS are set out in paragraphs 20 to 44 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential purchasers/users must form their own view about the product. Who this Ruling applies to 4. This Ruling applies to you if you are an employer who uses the MiX Telematics FMS and the IVMS to keep car logbook records and odometer records for the purposes of calculating the taxable value of a car fringe benefit using the cost-basis method. When this Ruling applies 5. This Ruling applies from 1 April 2020 to 31 March 2025. Background to legislative requirements 6. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost-basis method (operating cost method). 7. Where the election is made, the taxable value of the car fringe benefit using the operating cost method is calculated according to the formula in subsection 10(2). 8. In accordance with this formula, an employer intending to claim a reduction in the operating cost of a car, on account of business journeys undertaken during the holding period, must meet the requirements of either section 10A (if the year is a 'logbook year of tax' as defined in subsection 162G(1)) or section 10B (if the year is not a logbook year of tax), as applicable. 9. Section 10A requires that in a logbook year of tax: 10. Section 10B requires that in a non-logbook year of tax: 11. A year in which the MiX Telematics FMS are used will be a logbook year of tax if: 12. The subsequent four years will be a 'non-logbook of tax' if either dot point in paragraph 11 of this Ruling applies to the first year. Logbook records 13. The MiX Telematics FMS 'Logbook report' is a document which satisfies the definition of 'logbook records' in subsection 136(1), as over the time the fringe benefits tax (FBT) logbook records are being kept [4] : 14. However, the MiX Telematics FMS Logbook report is not a document which satisfies the definition of 'logbook records' in subsection 136(1) if the: Odometer records 15. The MiX Telematics FMS 'Trip report' satisfies the definition of 'odometer records' in subsection 136(1) [5] as it provides details of the odometer reading for the car at the start of the first recorded journey and also the odometer reading for the car at the end of the last recorded journey that were undertaken during each report period. Satisfying the requirements of section 10A in a logbook year of tax 16. An employer satisfies the requirement in section 10A and is entitled to claim a reduction of operating costs in a logbook year of tax if the MiX Telematics FMS are used continuously for the: 17. If the MiX Telematics FMS are: then the employer satisfies the requirement in section 10A and is entitled to claim a reduction of operating costs in a logbook year of tax provided the employer: Satisfying the requirements of section 10B in a non-logbook year of tax 18. An employer satisfies the requirement in section 10B and is entitled to claim a reduction of operating costs in a non-logbook year of tax if the MiX Telematics FMS are used continuously for the whole of the holding period. 19. An employer in a non-logbook year of tax who has used the MiX Telematics FMS in one of the previous four FBT years continuously for an applicable logbook period but: satisfies the requirements in section 10B and will be entitled to claim a reduction of operating costs of the car on account of business journeys undertaken in the car during the holding period provided the employer: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 21. MiX Telematics is a vehicle-monitoring company that uses telematics devices to record detailed vehicle and driver information for employers. MiX Telematics has a web-based online/cloud platform (MiX Fleet Manager) and a mobile platform (MyMiX), which can be used to log journeys of a vehicle and driver for use in reporting on a pre-determined period for FBT reporting requirements. 22. The reporting options being offered are customisable by the client for any 12 week period and/or a 52 week period as well as the option to select any other customisable period determined by the employer for tax reporting purposes. 23. MiX Telematics FMS consist of: 24. The IVMS device is connected to the vehicle via the on-board diagnostic port (OBD) or wired directly to the vehicle's electrical system and odometer or OBC (on-board computer) allowing the vehicle's odometer to be read/recorded. 25. When connected, the IVMS is directly connected to the odometer signal and provides a one-to-one reading of the odometer once calibrated and synchronised. 26. In the event that a vehicle odometer is unable to be read directly (for example, an incompatible vehicle), or the IVMS is not directly connected to the OBD port, as a fall back method the IVMS has a built-in GPS that is used to record and calculate the odometer readings via GPS velocity (GPSV). 27. The IVMS is powered by the vehicle's battery and records the following information for each trip: 28. At the commencement of a trip, the IVMS will prompt the driver to login/identify themselves using the driver key that uniquely identifies them. 29. Upon logging in, the IVMS assigns the journey to the driver. At the completion of the journey, the driver is prompted to classify the purpose of the journey as either business or personal and also to add in any relevant details as per logbook requirements as defined in subsection 136(1). 30. MiX Telematics has an administrative option in MiX Fleet Manager settings to turn on/off auto classification and to set the working days of the week (during the normal business hours and days as defined by the employer). If using the auto-classify option, any journeys undertaken during this time would automatically be flagged as business or personal and requires confirmation by the driver. Alternatively, it can be set that all journeys need to be manually-classified depending on regional regulations. 31. The auto-classified journeys still require the driver to confirm/edit the details at the end of each journey and add in the relevant information via MyMiX to meet the logbook recording requirements as defined in subsection 136(1). 32. If any journey remains unclassified for more than 24 hours, the driver is reminded that this is still outstanding (Trip report). 33. Reports are sent every day to drivers and/or their supervisors for all unclassified journeys to be classified before the 48 hour period expires. 34. The MiX Telematics FMS Logbook report may include 'unclassified' kilometres within the previous 48 hours which need to be classified. 35. If a variance between the IVMS odometer and the vehicle's odometer readings is observed by the driver and is greater than a predetermined variance allowed, then the Supervisor/Fleet Manager is to be notified. Where it is deemed that the variance is not acceptable, the Supervisor/Fleet Manager will have to have the IVMS odometer recalibrated and restart a new logbook period to comply with reporting requirements. 36. If the vehicle odometer is unable to be read, then the fall back to the GPSV method will be used as follows: 37. The trip data collected by the IVMS is sent via a cellular, wi-fi or satellite network connection to the server. The data is encrypted during transport, securing the privacy and integrity of the data between the IVMS and the cloud. 38. Access to the MyMiX app is secured by a username and password. Phone access is typically secured with a pin/pattern/fingerprint access according to employer policy. 39. Access to MiX Telematics FMS is secured by a username and password and optional IP address restrictions where required. MiX Telematics FMS run on Amazon Web Services data centre in Sydney and are compliant to the international ISO 9001 / ISO 27001 standards. MiX Telematics Fleet Manager Systems Logbook report 40. MiX Telematics FMS produce reports from the stored trip data that is collected from each vehicle. The MiX Telematics Fleet Manager reporting suite allows for a Logbook report to be run for any date range and provides the following information for the driver or vehicle: MiX Telematics Fleet Manager Systems Trip report 41. The MiX Telematics FMS Trip reports, which can be run for any customisable period determined by the user (detailed, daily, monthly, summary), provide the minimum, but are limited to the following, detail: 42. In cases where the employer has selected a reporting period that is not a full 52 weeks, the MiX Telematics FMS FBT reporting can also provide the odometer readings at the start and end of any selected holding period (for example, 1 April and 31 March for a non-logbook year). 43. The MiX Telematics FMS Logbook report is in English and can be generated in common formula including PDF, Excel and CSV. 44. The MiX Telematics FMS logbook records are all backed up and archived for a minimum of five years from the current rolling 13 months of live data records that are currently shown online. Commissioner of Taxation 24 February 2021 © 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

Class of entities or scheme: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 21. MiX Telematics is a vehicle-monitoring company that uses telematics devices to record detailed vehicle and driver information for employers. MiX Telematics has a web-based online/cloud platform (MiX Fleet Manager) and a mobile platform (MyMiX), which can be used to log journeys of a vehicle and driver for use in reporting on a pre-determined period for FBT reporting requirements. 22. The reporting options being offered are customisable by the client for any 12 week period and/or a 52 week period as well as the option to select any other customisable period determined by the employer for tax reporting purposes. 23. MiX Telematics FMS consist of: 24. The IVMS device is connected to the vehicle via the on-board diagnostic port (OBD) or wired directly to the vehicle's electrical system and odometer or OBC (on-board computer) allowing the vehicle's odometer to be read/recorded. 25. When connected, the IVMS is directly connected to the odometer signal and provides a one-to-one reading of the odometer once calibrated and synchronised. 26. In the event that a vehicle odometer is unable to be read directly (for example, an incompatible vehicle), or the IVMS is not directly connected to the OBD port, as a fall back method the IVMS has a built-in GPS that is used to record and calculate the odometer readings via GPS velocity (GPSV). 27. The IVMS is powered by the vehicle's battery and records the following information for each trip: 28. At the commencement of a trip, the IVMS will prompt the driver to login/identify themselves using the driver key that uniquely identifies them. 29. Upon logging in, the IVMS assigns the journey to the driver. At the completion of the journey, the driver is prompted to classify the purpose of the journey as either business or personal and also to add in any relevant details as per logbook requirements as defined in subsection 136(1). 30. MiX Telematics has an administrative option in MiX Fleet Manager settings to turn on/off auto classification and to set the working days of the week (during the normal business hours and days as defined by the employer). If using the auto-classify option, any journeys undertaken during this time would automatically be flagged as business or personal and requires confirmation by the driver. Alternatively, it can be set that all journeys need to be manually-classified depending on regional regulations. 31. The auto-classified journeys still require the driver to confirm/edit the details at the end of each journey and add in the relevant information via MyMiX to meet the logbook recording requirements as defined in subsection 136(1). 32. If any journey remains unclassified for more than 24 hours, the driver is reminded that this is still outstanding (Trip report). 33. Reports are sent every day to drivers and/or their supervisors for all unclassified journeys to be classified before the 48 hour period expires. 34. The MiX Telematics FMS Logbook report may include 'unclassified' kilometres within the previous 48 hours which need to be classified. 35. If a variance between the IVMS odometer and the vehicle's odometer readings is observed by the driver and is greater than a predetermined variance allowed, then the Supervisor/Fleet Manager is to be notified. Where it is deemed that the variance is not acceptable, the Supervisor/Fleet Manager will have to have the IVMS odometer recalibrated and restart a new logbook period to comply with reporting requirements. 36. If the vehicle odometer is unable to be read, then the fall back to the GPSV method will be used as follows: 37. The trip data collected by the IVMS is sent via a cellular, wi-fi or satellite network connection to the server. The data is encrypted during transport, securing the privacy and integrity of the data between the IVMS and the cloud. 38. Access to the MyMiX app is secured by a username and password. Phone access is typically secured with a pin/pattern/fingerprint access according to employer policy. 39. Access to MiX Telematics FMS is secured by a username and password and optional IP address restrictions where required. MiX Telematics FMS run on Amazon Web Services data centre in Sydney and are compliant to the international ISO 9001 / ISO 27001 standards. | MiX Telematics Fleet Manager Systems Logbook report: 40. MiX Telematics FMS produce reports from the stored trip data that is collected from each vehicle. The MiX Telematics Fleet Manager reporting suite allows for a Logbook report to be run for any date range and provides the following information for the driver or vehicle: | MiX Telematics Fleet Manager Systems Trip report: 41. The MiX Telematics FMS Trip reports, which can be run for any customisable period determined by the user (detailed, daily, monthly, summary), provide the minimum, but are limited to the following, detail: 42. In cases where the employer has selected a reporting period that is not a full 52 weeks, the MiX Telematics FMS FBT reporting can also provide the odometer readings at the start and end of any selected holding period (for example, 1 April and 31 March for a non-logbook year). 43. The MiX Telematics FMS Logbook report is in English and can be generated in common formula including PDF, Excel and CSV. 44. The MiX Telematics FMS logbook records are all backed up and archived for a minimum of five years from the current rolling 13 months of live data records that are currently shown online. Commissioner of Taxation 24 February 2021 © 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).

Ruling: 1. This Ruling sets out when the MiX Telematics Australasia Pty Ltd (MiX Telematics) Fleet Manager systems (FMS) and the in-Vehicle Monitoring System (IVMS) can be utilised to reduce the operating costs in both a logbook and non-logbook year for the purpose of calculating the taxable value of a car fringe benefit using the cost-basis method. 2. Broadly, sections 10A and 10B of the Fringe Benefits Tax Assessment Act 1986 [1] allow an employer to reduce the operating cost of a car for business journeys that are undertaken in the car during the period in which the car was held (either by the employer or another person). Such a reduction can only occur where certain conditions are met. 3. Full details of the MiX Telematics FMS and the IVMS are set out in paragraphs 20 to 44 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential purchasers/users must form their own view about the product. | Who this Ruling applies to: 4. This Ruling applies to you if you are an employer who uses the MiX Telematics FMS and the IVMS to keep car logbook records and odometer records for the purposes of calculating the taxable value of a car fringe benefit using the cost-basis method. | When this Ruling applies: 5. This Ruling applies from 1 April 2020 to 31 March 2025. | Background to legislative requirements: 6. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost-basis method (operating cost method). 7. Where the election is made, the taxable value of the car fringe benefit using the operating cost method is calculated according to the formula in subsection 10(2). 8. In accordance with this formula, an employer intending to claim a reduction in the operating cost of a car, on account of business journeys undertaken during the holding period, must meet the requirements of either section 10A (if the year is a 'logbook year of tax' as defined in subsection 162G(1)) or section 10B (if the year is not a logbook year of tax), as applicable. 9. Section 10A requires that in a logbook year of tax: 10. Section 10B requires that in a non-logbook year of tax: 11. A year in which the MiX Telematics FMS are used will be a logbook year of tax if: 12. The subsequent four years will be a 'non-logbook of tax' if either dot point in paragraph 11 of this Ruling applies to the first year. | Logbook records: 13. The MiX Telematics FMS 'Logbook report' is a document which satisfies the definition of 'logbook records' in subsection 136(1), as over the time the fringe benefits tax (FBT) logbook records are being kept [4] : 14. However, the MiX Telematics FMS Logbook report is not a document which satisfies the definition of 'logbook records' in subsection 136(1) if the: | Odometer records: 15. The MiX Telematics FMS 'Trip report' satisfies the definition of 'odometer records' in subsection 136(1) [5] as it provides details of the odometer reading for the car at the start of the first recorded journey and also the odometer reading for the car at the end of the last recorded journey that were undertaken during each report period. | Satisfying the requirements of section 10A in a logbook year of tax: 16. An employer satisfies the requirement in section 10A and is entitled to claim a reduction of operating costs in a logbook year of tax if the MiX Telematics FMS are used continuously for the: 17. If the MiX Telematics FMS are: then the employer satisfies the requirement in section 10A and is entitled to claim a reduction of operating costs in a logbook year of tax provided the employer: | Satisfying the requirements of section 10B in a non-logbook year of tax: 18. An employer satisfies the requirement in section 10B and is entitled to claim a reduction of operating costs in a non-logbook year of tax if the MiX Telematics FMS are used continuously for the whole of the holding period. 19. An employer in a non-logbook year of tax who has used the MiX Telematics FMS in one of the previous four FBT years continuously for an applicable logbook period but: satisfies the requirements in section 10B and will be entitled to claim a reduction of operating costs of the car on account of business journeys undertaken in the car during the holding period provided the employer: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. 21. MiX Telematics is a vehicle-monitoring company that uses telematics devices to record detailed vehicle and driver information for employers. MiX Telematics has a web-based online/cloud platform (MiX Fleet Manager) and a mobile platform (MyMiX), which can be used to log journeys of a vehicle and driver for use in reporting on a pre-determined period for FBT reporting requirements. 22. The reporting options being offered are customisable by the client for any 12 week period and/or a 52 week period as well as the option to select any other customisable period determined by the employer for tax reporting purposes. 23. MiX Telematics FMS consist of: 24. The IVMS device is connected to the vehicle via the on-board diagnostic port (OBD) or wired directly to the vehicle's electrical system and odometer or OBC (on-board computer) allowing the vehicle's odometer to be read/recorded. 25. When connected, the IVMS is directly connected to the odometer signal and provides a one-to-one reading of the odometer once calibrated and synchronised. 26. In the event that a vehicle odometer is unable to be read directly (for example, an incompatible vehicle), or the IVMS is not directly connected to the OBD port, as a fall back method the IVMS has a built-in GPS that is used to record and calculate the odometer readings via GPS velocity (GPSV). 27. The IVMS is powered by the vehicle's battery and records the following information for each trip: 28. At the commencement of a trip, the IVMS will prompt the driver to login/identify themselves using the driver key that uniquely identifies them. 29. Upon logging in, the IVMS assigns the journey to the driver. At the completion of the journey, the driver is prompted to classify the purpose of the journey as either business or personal and also to add in any relevant details as per logbook requirements as defined in subsection 136(1). 30. MiX Telematics has an administrative option in MiX Fleet Manager settings to turn on/off auto classification and to set the working days of the week (during the normal business hours and days as defined by the employer). If using the auto-classify option, any journeys undertaken during this time would automatically be flagged as business or personal and requires confirmation by the driver. Alternatively, it can be set that all journeys need to be manually-classified depending on regional regulations. 31. The auto-classified journeys still require the driver to confirm/edit the details at the end of each journey and add in the relevant information via MyMiX to meet the logbook recording requirements as defined in subsection 136(1). 32. If any journey remains unclassified for more than 24 hours, the driver is reminded that this is still outstanding (Trip report). 33. Reports are sent every day to drivers and/or their supervisors for all unclassified journeys to be classified before the 48 hour period expires. 34. The MiX Telematics FMS Logbook report may include 'unclassified' kilometres within the previous 48 hours which need to be classified. 35. If a variance between the IVMS odometer and the vehicle's odometer readings is observed by the driver and is greater than a predetermined variance allowed, then the Supervisor/Fleet Manager is to be notified. Where it is deemed that the variance is not acceptable, the Supervisor/Fleet Manager will have to have the IVMS odometer recalibrated and restart a new logbook period to comply with reporting requirements. 36. If the vehicle odometer is unable to be read, then the fall back to the GPSV method will be used as follows: 37. The trip data collected by the IVMS is sent via a cellular, wi-fi or satellite network connection to the server. The data is encrypted during transport, securing the privacy and integrity of the data between the IVMS and the cloud. 38. Access to the MyMiX app is secured by a username and password. Phone access is typically secured with a pin/pattern/fingerprint access according to employer policy. 39. Access to MiX Telematics FMS is secured by a username and password and optional IP address restrictions where required. MiX Telematics FMS run on Amazon Web Services data centre in Sydney and are compliant to the international ISO 9001 / ISO 27001 standards. | MiX Telematics Fleet Manager Systems Logbook report: 40. MiX Telematics FMS produce reports from the stored trip data that is collected from each vehicle. The MiX Telematics Fleet Manager reporting suite allows for a Logbook report to be run for any date range and provides the following information for the driver or vehicle: | MiX Telematics Fleet Manager Systems Trip report: 41. The MiX Telematics FMS Trip reports, which can be run for any customisable period determined by the user (detailed, daily, monthly, summary), provide the minimum, but are limited to the following, detail: 42. In cases where the employer has selected a reporting period that is not a full 52 weeks, the MiX Telematics FMS FBT reporting can also provide the odometer readings at the start and end of any selected holding period (for example, 1 April and 31 March for a non-logbook year). 43. The MiX Telematics FMS Logbook report is in English and can be generated in common formula including PDF, Excel and CSV. 44. The MiX Telematics FMS logbook records are all backed up and archived for a minimum of five years from the current rolling 13 months of live data records that are currently shown online. Commissioner of Taxation 24 February 2021 © 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




What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.


Legislative references: FBTAA 1986 10 FBTAA 1986 10(2) FBTAA 1986 10A FBTAA 1986 10B FBTAA 1986 136(1) FBTAA 1986 162C FBTAA 1986 162G FBTAA 1986 162G(1) FBTAA 1986 162G(1)(a) FBTAA 1986 162G(1)(b) FBTAA 1986 162H(1) TAA 1953
Other references: International ISO 9001 / ISO 27001