Class Ruling CR 2022/67

What this ruling is about: 1. This Ruling sets out when the Toyota Halo system that is offered by Toyota Motor Corporation Australia Limited (Toyota Australia) 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 (FBTAA) 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. All legislative references in this Ruling are to the FBTAA. 4. Full details of the Toyota Halo system are set out in paragraphs 21 to 33 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 5. This Ruling applies to you if you are an employer who uses the Toyota Halo system 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 6. This Ruling applies from 1 April 2022 to 31 March 2026. Background 7. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 8. 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). 9. 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 'log book year of tax' as defined in subsection 162G(1)) or section 10B (if the year is not a 'log book year of tax'), as applicable. 10. Section 10A requires that in a logbook year of tax: 11. Section 10B requires that in a non-logbook year of tax: 12. A year in which the Toyota Halo system is used will be a logbook year of tax if: 13. The subsequent 4 years will be a non-logbook of tax if either point in paragraph 12 of this Ruling applies to the first year. Logbook records 14. The Toyota Halo system 'Logbook report' is a document which satisfies the definition of 'log book records' in subsection 136(1), as over the time the fringe benefits tax (FBT) logbook records are being kept [3] : 15. However, the Toyota Halo system Logbook report is not a document which satisfies the definition of 'log book records' in subsection 136(1) if: Odometer records 16. The Toyota Halo Journey report satisfies the definition of 'odometer records' in subsection 136(1) [4] 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 17. 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 Toyota Halo system is used continuously for: 18. If the Toyota Halo system: Satisfying the requirements of section 10B in a non-logbook year of tax 19. 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 Toyota Halo system is used continuously for the whole of the holding period. 20. An employer in a non-logbook year of tax who has used the Toyota Halo system in one of the previous 4 FBT years continuously for an applicable logbook period but: 21. Toyota Australia offers its customers an option to purchase a vehicle logbook system in conjunction with a genuine Toyota accessory. 22. The vehicle logbook system was originally produced by another entity and was rebranded by Toyota Australia as 'Toyota Halo'. The purpose of Toyota Halo is to maintain records as required under the FBTAA. 23. The Toyota Halo system consists of: 24. Employer cars are fitted with GPS devices that automatically and regularly report back to the platform via the third or fourth generation (3G/4G) Telstra mobile networks. 25. The GPS device is either hard wired to the car's battery or plugs in via the onboard diagnostics system 2 (OBD2) port. 26. The Toyota genuine GPS device (TL-OBD) reads the odometer reading straight from the Controller Area Network Bus. Actual odometer readings are automatically uploaded to the Toyota Halo system upon installation. Every trip is logged within the system, requiring drivers to classify every trip made as either 'personal' or 'business' with the relevant description. The driver can use a mobile device or a desktop or laptop computer to classify each journey. 27. For all classified business journeys, the driver must include the journey purpose. The system will not allow a trip to be classified as business without stating the purpose. This data can then be reviewed and audited by the system administrator. 28. All information on any journey undertaken by a car will be sent via the mobile network to be stored on the platform. The device will buffer up to 50 megabytes for around 39 days of concurrent tracking if there is no mobile network to connect. 29. A client will be able to use the Toyota Halo system to produce (in English) an FBT vehicle logbook for any selected period for each car that has the system fitted. 30. The logbook administrator is capable of reviewing all trip information and is required to identify any errors or potentially misclassified trips prior to completing the logbook. The logbook can only be printed by a user with logbook administration rights and only once all trips in the logbook have been classified and the logbook completed by the driver. 31. Reports generated by the Toyota Halo system will provide the following information: 32. The Toyota Halo system report provides details of the calculated business use percentage for the selected period (percentage of number of business kilometres travelled to the total number of kilometres travelled). 33. The Toyota Halo system ensures delivery of each message to the platform. It also operates a fully fail-safe environment with the same copies of data stored in multiple secured locations including constant and live data backups. All critical components of the Toyota Halo system are monitored by automatic alerting systems. Commissioner of Taxation 27 July 2022 © 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).

Class of entities or scheme: 21. Toyota Australia offers its customers an option to purchase a vehicle logbook system in conjunction with a genuine Toyota accessory. 22. The vehicle logbook system was originally produced by another entity and was rebranded by Toyota Australia as 'Toyota Halo'. The purpose of Toyota Halo is to maintain records as required under the FBTAA. 23. The Toyota Halo system consists of: 24. Employer cars are fitted with GPS devices that automatically and regularly report back to the platform via the third or fourth generation (3G/4G) Telstra mobile networks. 25. The GPS device is either hard wired to the car's battery or plugs in via the onboard diagnostics system 2 (OBD2) port. 26. The Toyota genuine GPS device (TL-OBD) reads the odometer reading straight from the Controller Area Network Bus. Actual odometer readings are automatically uploaded to the Toyota Halo system upon installation. Every trip is logged within the system, requiring drivers to classify every trip made as either 'personal' or 'business' with the relevant description. The driver can use a mobile device or a desktop or laptop computer to classify each journey. 27. For all classified business journeys, the driver must include the journey purpose. The system will not allow a trip to be classified as business without stating the purpose. This data can then be reviewed and audited by the system administrator. 28. All information on any journey undertaken by a car will be sent via the mobile network to be stored on the platform. The device will buffer up to 50 megabytes for around 39 days of concurrent tracking if there is no mobile network to connect. 29. A client will be able to use the Toyota Halo system to produce (in English) an FBT vehicle logbook for any selected period for each car that has the system fitted. 30. The logbook administrator is capable of reviewing all trip information and is required to identify any errors or potentially misclassified trips prior to completing the logbook. The logbook can only be printed by a user with logbook administration rights and only once all trips in the logbook have been classified and the logbook completed by the driver. 31. Reports generated by the Toyota Halo system will provide the following information: 32. The Toyota Halo system report provides details of the calculated business use percentage for the selected period (percentage of number of business kilometres travelled to the total number of kilometres travelled). 33. The Toyota Halo system ensures delivery of each message to the platform. It also operates a fully fail-safe environment with the same copies of data stored in multiple secured locations including constant and live data backups. All critical components of the Toyota Halo system are monitored by automatic alerting systems. Commissioner of Taxation 27 July 2022 © 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 Toyota Halo system that is offered by Toyota Motor Corporation Australia Limited (Toyota Australia) 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 (FBTAA) 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. All legislative references in this Ruling are to the FBTAA. 4. Full details of the Toyota Halo system are set out in paragraphs 21 to 33 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: 5. This Ruling applies to you if you are an employer who uses the Toyota Halo system 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: 6. This Ruling applies from 1 April 2022 to 31 March 2026. | Background: 7. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 8. 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). 9. 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 'log book year of tax' as defined in subsection 162G(1)) or section 10B (if the year is not a 'log book year of tax'), as applicable. 10. Section 10A requires that in a logbook year of tax: 11. Section 10B requires that in a non-logbook year of tax: 12. A year in which the Toyota Halo system is used will be a logbook year of tax if: 13. The subsequent 4 years will be a non-logbook of tax if either point in paragraph 12 of this Ruling applies to the first year. | Logbook records: 14. The Toyota Halo system 'Logbook report' is a document which satisfies the definition of 'log book records' in subsection 136(1), as over the time the fringe benefits tax (FBT) logbook records are being kept [3] : 15. However, the Toyota Halo system Logbook report is not a document which satisfies the definition of 'log book records' in subsection 136(1) if: | Odometer records: 16. The Toyota Halo Journey report satisfies the definition of 'odometer records' in subsection 136(1) [4] 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: 17. 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 Toyota Halo system is used continuously for: 18. If the Toyota Halo system: | Satisfying the requirements of section 10B in a non-logbook year of tax: 19. 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 Toyota Halo system is used continuously for the whole of the holding period. 20. An employer in a non-logbook year of tax who has used the Toyota Halo system in one of the previous 4 FBT years continuously for an applicable logbook period but: 21. Toyota Australia offers its customers an option to purchase a vehicle logbook system in conjunction with a genuine Toyota accessory. 22. The vehicle logbook system was originally produced by another entity and was rebranded by Toyota Australia as 'Toyota Halo'. The purpose of Toyota Halo is to maintain records as required under the FBTAA. 23. The Toyota Halo system consists of: 24. Employer cars are fitted with GPS devices that automatically and regularly report back to the platform via the third or fourth generation (3G/4G) Telstra mobile networks. 25. The GPS device is either hard wired to the car's battery or plugs in via the onboard diagnostics system 2 (OBD2) port. 26. The Toyota genuine GPS device (TL-OBD) reads the odometer reading straight from the Controller Area Network Bus. Actual odometer readings are automatically uploaded to the Toyota Halo system upon installation. Every trip is logged within the system, requiring drivers to classify every trip made as either 'personal' or 'business' with the relevant description. The driver can use a mobile device or a desktop or laptop computer to classify each journey. 27. For all classified business journeys, the driver must include the journey purpose. The system will not allow a trip to be classified as business without stating the purpose. This data can then be reviewed and audited by the system administrator. 28. All information on any journey undertaken by a car will be sent via the mobile network to be stored on the platform. The device will buffer up to 50 megabytes for around 39 days of concurrent tracking if there is no mobile network to connect. 29. A client will be able to use the Toyota Halo system to produce (in English) an FBT vehicle logbook for any selected period for each car that has the system fitted. 30. The logbook administrator is capable of reviewing all trip information and is required to identify any errors or potentially misclassified trips prior to completing the logbook. The logbook can only be printed by a user with logbook administration rights and only once all trips in the logbook have been classified and the logbook completed by the driver. 31. Reports generated by the Toyota Halo system will provide the following information: 32. The Toyota Halo system report provides details of the calculated business use percentage for the selected period (percentage of number of business kilometres travelled to the total number of kilometres travelled). 33. The Toyota Halo system ensures delivery of each message to the platform. It also operates a fully fail-safe environment with the same copies of data stored in multiple secured locations including constant and live data backups. All critical components of the Toyota Halo system are monitored by automatic alerting systems. Commissioner of Taxation 27 July 2022 © 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).




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 10 FBTAA 10(2) FBTAA 10A FBTAA 10B FBTAA 136(1) FBTAA 162C FBTAA 162G(1) FBTAA 162G(1)(a) FBTAA 162G(1)(b) FBTAA 162H(1)