Class Ruling CR 2015/105
Date of effect: 1 November 2015

What this ruling is about: 1. This Ruling sets out the Commissioner's opinion on the way in which the relevant provisions 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: All references in this Ruling are to the FBTAA unless otherwise stated. Class of entities 3. The class of entities to which this Ruling applies is those employers who use the Telogis GPS system for car log book record and odometer record keeping requirements. Qualifications 4. The Commissioner makes this Ruling based on the precise scheme 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 17 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 those employers who use the Telogis GPS system for car log book record and odometer record keeping requirements. | Qualifications: 4. The Commissioner makes this Ruling based on the precise scheme 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 17 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 November 2015. 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. The following documents or relevant parts of them form part of and are to be read with the description. The relevant documents or parts of documents incorporated into this description of the scheme are: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 9. Telogis Inc developed the Telogis GPS system as a means of recoding car log book entries. 10. The Telogis GPS system consists of: 11. Employer cars are fitted with GPS devices that automatically and regularly report back to the platform via the mobile 3G/4G networks. 12. All information on any journey undertaken by a car will be sent via the mobile network to be stored on the platform. Should the mobile network not be available, all data is stored in an inbuilt queue which is part of the Telogis Hardware/GPS devices design. This queue can hold unlimited data as long as the car battery is connected. 13. Any omission of data or incorrect entries results in alerts to the Telogis Quality Assurance Team who will be able to take the appropriate action to correct the record. There are also redundant and self-correction mechanisms in place which ensure that data makes it to the Telogis servers. 'Redundant' in this context means that Telogis GPS devices have the ability to read/store data online or offline depending on network availability and vehicle battery levels. This allows the unit to continue to operate properly under any circumstance (online, offline, or in case of a drained vehicle battery). As a failsafe, there is also a manual mechanism available to re-enter the data into the Telogis systems. 14. A Logbook viewer is available for supervisors to sample information for their cars and/or drivers. Random sample checks of data can be conducted based on the information collected from cars and journey classifications received from drivers. This is view-only data and changes can only be made by the drivers. 15. An employer will be able to use the Telogis GPS system to produce, in English, a 'FBT Journey Report' for any selected period for each car that has the system fitted. The Telogis platform also supports multiple languages so the Telogis GPS system is not limited to English only reporting. 16. The Telogis GPS system 'FBT Journey Report' will provide the following information for each journey undertaken in the selected period: 17. The Telogis GPS system 'FBT Journey Report' will provide details of the calculated business use percentage for the selected period. (The percentage of the number of business kilometres travelled to the total number of kilometres travelled). 18. The Telogis GPS system 'FBT Journey Report' is a document that satisfies the definition of 'log book records' in subsection 136(1). 19. The Telogis GPS system 'FBT Journey Report' is a document that satisfies the definition of 'odometer records' in subsection 136(1). 20. An employer using the Telogis GPS system 'FBT Journey Report' is entitled to claim a reduction of operating costs of a car on account of business journeys, in a log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the requirements of section 10A. 21. An employer using the Telogis GPS system 'FBT Journey Report' is entitled to claim a reduction of operating costs of a car on account of business journeys, in a non-log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the requirements of section 10B. Commissioner of Taxation 9 December 2015 | What is the operating cost method for the purposes of the FBTAA?: 22. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 23. Where the election is made, the taxable value of the car fringe benefit using the cost basis method (operating cost method) is calculated according to the following formula in subsection 10(2): 24. Therefore, employers 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) or section 10B (if the year is not a log book year of tax), as applicable. | Does the Telogis GPS system 'FBT Journey Report' meet the relevant requirements of section 10A?: 25. Section 10A states: 26. Section 162G sets out various circumstances under which a particular year can be treated as a 'log book year of tax'. It is accepted for present purposes that all employers using the Telogis GPS system will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'log book year of tax'. 27. Nevertheless, it is essential to meet the requirements of section 10A that both 'log book records' and 'odometer records' are maintained. | Does the Telogis GPS system 'FBT Journey Report' satisfy the requirements of the definition of 'log book records'?: 28. Subsection 136(1) defines 'log book records' as: 29. The definition of 'log book records', in subsection 136(1), requires that the relevant record be 'a daily log book or similar document' and also the relevant entries are 'made in the English language at, or as soon as reasonable practical after, the end of the journey'. 30. The business use or private use details for the journey are input by the driver onto the GPS device of Telogis GPS system at the start of each car journey. The Telogis GPS system 'FBT Journey Report' provides its information in English. 31. Therefore, the 'FBT Journey Report' provided by Telogis GPS system meets the necessary requirement of being a 'daily log book or similar document' and also meets the necessary requirement of having the relevant entries 'made in the English language at, or as soon as practical after, the end of the journey'. 32. Although it is expected that the relevant entries will be made the same day the car journey was undertaken, it is accepted that in situations where it is not practical to generate a Telogis GPS system 'FBT Journey Report' on a daily basis, the period of making such entries may be extended. Therefore, provided the necessary entries are made or produced, at least weekly, it is considered that such circumstances do not necessarily change the view expressed previously (in paragraph 31 of this Ruling). 33. Paragraph (d) of the definition of 'log book records' in subsection 136(1), requires the respective odometer readings of the car at the beginning and at the end of the journey be entered into the relevant records. 34. The term 'odometer' is not defined in either the FBTAA or the Income Tax Assessment Act 1997 but the Macquarie Dictionary, online edition, defines that term as being 'an instrument for measuring distance passed over, as by a motor vehicle'. 35. However, the term 'odometer records', as defined in subsection 136(1) makes reference to 'odometer readings 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, thereby mechanically moving the standard odometer fitted in the car by the manufacturer. 36. 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. 37. Each time the car is driven, the start and end odometer readings for the journey are calculated by the Telogis GPS system from the GPS and other telemetry data recorded. It is accepted that the opening and closing odometer readings calculated by the Telogis GPS system are of sufficient integrity to be 'odometer readings of the car'. 38. It is considered that the opening and closing odometer readings for each car journey detailed on the Telogis GPS system 'FBT Journey Report' satisfies the requirements of paragraph (d) of the definition of 'log book records' in subsection 136(1). 39. The Telogis GPS system 'FBT Journey Report' sets out particulars that readily satisfy paragraphs (c), (e) and (f) of the definition of 'log book records' in subsection 136(1). 40. However, the definition of 'log book records', in subsection 136(1), also requires that each business journey recorded in the log book records be in relation to a 'period'. 41. Paragraph 10A(a) refers to log book records being maintained for an 'applicable log book period'. 42. The term 'applicable log book period' is defined in subsection 162H(1) as follows: 43. It is accepted, in the absence of evidence to the contrary in a particular case, that all employers using the Telogis GPS system 'FBT Journey Report' in relation to any car fringe benefits they provide will maintain the necessary records for the duration of the 'applicable log book period' (as that latter term is defined in subsection 162H(1)). 44. It is considered that the Telogis GPS system 'FBT Journey Report' satisfies all the relevant requirements of the definition of 'log book records' as defined in subsection 136(1). | Does the Telogis GPS system 'FBT Journey Report' satisfy the requirements of the definition of 'odometer records'?: 45. The term 'odometer records' is defined in subsection 136(1) as: 46. The definition of 'odometer records' in subsection 136(1), requires that odometer readings be recorded in relation to both the 'commencement of the period' and at the 'end of the period'. 47. The Telogis GPS system 'FBT Journey Report' 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. 48. As stated previously (at paragraph 43 of this Ruling), it is accepted in the absence of evidence to the contrary in a particular case, that all employers using the Telogis GPS system 'FBT Journey Report' will maintain the necessary records for the 'applicable log book period'. 49. It was determined previously (at paragraph 31 of this Ruling) that a Telogis GPS system 'FBT Journey Report' provided by the Telogis GPS system meets the necessary requirement of having entries 'made in the English language at, or as soon as reasonably practicable after, the end of the journey'. 50. Therefore, it is considered that the Telogis GPS system 'FBT Journey Report' satisfies all the relevant requirements of the definition of 'odometer records' as defined in subsection 136(1). | Conclusion on whether the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10A: 51. As determined previously (at paragraphs 44 and 50 of this Ruling respectively), the Telogis GPS system 'FBT Journey Reports' are 'log book records' and 'odometer records' for the purposes of paragraph 10A(a). 52. It is also accepted, in the absence of any evidence to the contrary in a particular case, that all remaining applicable requirements of section 10A will be met by employers using the Telogis GPS system 'FBT Journey Report'. 53. An employer using the Telogis GPS system 'FBT Journey Report' is, consequently, entitled to a reduction of the operating costs of a car on account of business journeys, in a log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10A. | Does the Telogis GPS system 'FBT Journey Report' meet the relevant requirements of section 10B?: 54. Section 10B states: 55. As determined previously (at paragraph 50 of this Ruling) the Telogis GPS system 'FBT Journey Report' will satisfy the definition of the term 'odometer records' in subsection 136(1). For the reasons mentioned at paragraphs 46 to 49 of this Ruling, it is considered that the Telogis GPS system 'FBT Journey Report' will meet the definition of 'odometer records' for the purposes of paragraph 10B(a). 56. It is also accepted, in the absence of any evidence to the contrary in a particular case, that all remaining requirements of section 10B will be met by employers using the Telogis GPS system 'FBT Journey Report'. | Conclusion on whether the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10B: 57. An employer using the Telogis GPS system 'FBT Journey Report' is, consequently, entitled to a reduction of the operating costs of a car on account of business journeys, in a non-log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10B. 58. 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: 18. The Telogis GPS system 'FBT Journey Report' is a document that satisfies the definition of 'log book records' in subsection 136(1). 19. The Telogis GPS system 'FBT Journey Report' is a document that satisfies the definition of 'odometer records' in subsection 136(1). 20. An employer using the Telogis GPS system 'FBT Journey Report' is entitled to claim a reduction of operating costs of a car on account of business journeys, in a log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the requirements of section 10A. 21. An employer using the Telogis GPS system 'FBT Journey Report' is entitled to claim a reduction of operating costs of a car on account of business journeys, in a non-log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the requirements of section 10B. Commissioner of Taxation 9 December 2015


Appendix: What is the operating cost method for the purposes of the FBTAA?: 22. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 23. Where the election is made, the taxable value of the car fringe benefit using the cost basis method (operating cost method) is calculated according to the following formula in subsection 10(2): 24. Therefore, employers 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) or section 10B (if the year is not a log book year of tax), as applicable. | Does the Telogis GPS system 'FBT Journey Report' meet the relevant requirements of section 10A?: 25. Section 10A states: 26. Section 162G sets out various circumstances under which a particular year can be treated as a 'log book year of tax'. It is accepted for present purposes that all employers using the Telogis GPS system will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'log book year of tax'. 27. Nevertheless, it is essential to meet the requirements of section 10A that both 'log book records' and 'odometer records' are maintained. | Does the Telogis GPS system 'FBT Journey Report' satisfy the requirements of the definition of 'log book records'?: 28. Subsection 136(1) defines 'log book records' as: 29. The definition of 'log book records', in subsection 136(1), requires that the relevant record be 'a daily log book or similar document' and also the relevant entries are 'made in the English language at, or as soon as reasonable practical after, the end of the journey'. 30. The business use or private use details for the journey are input by the driver onto the GPS device of Telogis GPS system at the start of each car journey. The Telogis GPS system 'FBT Journey Report' provides its information in English. 31. Therefore, the 'FBT Journey Report' provided by Telogis GPS system meets the necessary requirement of being a 'daily log book or similar document' and also meets the necessary requirement of having the relevant entries 'made in the English language at, or as soon as practical after, the end of the journey'. 32. Although it is expected that the relevant entries will be made the same day the car journey was undertaken, it is accepted that in situations where it is not practical to generate a Telogis GPS system 'FBT Journey Report' on a daily basis, the period of making such entries may be extended. Therefore, provided the necessary entries are made or produced, at least weekly, it is considered that such circumstances do not necessarily change the view expressed previously (in paragraph 31 of this Ruling). 33. Paragraph (d) of the definition of 'log book records' in subsection 136(1), requires the respective odometer readings of the car at the beginning and at the end of the journey be entered into the relevant records. 34. The term 'odometer' is not defined in either the FBTAA or the Income Tax Assessment Act 1997 but the Macquarie Dictionary, online edition, defines that term as being 'an instrument for measuring distance passed over, as by a motor vehicle'. 35. However, the term 'odometer records', as defined in subsection 136(1) makes reference to 'odometer readings 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, thereby mechanically moving the standard odometer fitted in the car by the manufacturer. 36. 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. 37. Each time the car is driven, the start and end odometer readings for the journey are calculated by the Telogis GPS system from the GPS and other telemetry data recorded. It is accepted that the opening and closing odometer readings calculated by the Telogis GPS system are of sufficient integrity to be 'odometer readings of the car'. 38. It is considered that the opening and closing odometer readings for each car journey detailed on the Telogis GPS system 'FBT Journey Report' satisfies the requirements of paragraph (d) of the definition of 'log book records' in subsection 136(1). 39. The Telogis GPS system 'FBT Journey Report' sets out particulars that readily satisfy paragraphs (c), (e) and (f) of the definition of 'log book records' in subsection 136(1). 40. However, the definition of 'log book records', in subsection 136(1), also requires that each business journey recorded in the log book records be in relation to a 'period'. 41. Paragraph 10A(a) refers to log book records being maintained for an 'applicable log book period'. 42. The term 'applicable log book period' is defined in subsection 162H(1) as follows: 43. It is accepted, in the absence of evidence to the contrary in a particular case, that all employers using the Telogis GPS system 'FBT Journey Report' in relation to any car fringe benefits they provide will maintain the necessary records for the duration of the 'applicable log book period' (as that latter term is defined in subsection 162H(1)). 44. It is considered that the Telogis GPS system 'FBT Journey Report' satisfies all the relevant requirements of the definition of 'log book records' as defined in subsection 136(1). | Does the Telogis GPS system 'FBT Journey Report' satisfy the requirements of the definition of 'odometer records'?: 45. The term 'odometer records' is defined in subsection 136(1) as: 46. The definition of 'odometer records' in subsection 136(1), requires that odometer readings be recorded in relation to both the 'commencement of the period' and at the 'end of the period'. 47. The Telogis GPS system 'FBT Journey Report' 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. 48. As stated previously (at paragraph 43 of this Ruling), it is accepted in the absence of evidence to the contrary in a particular case, that all employers using the Telogis GPS system 'FBT Journey Report' will maintain the necessary records for the 'applicable log book period'. 49. It was determined previously (at paragraph 31 of this Ruling) that a Telogis GPS system 'FBT Journey Report' provided by the Telogis GPS system meets the necessary requirement of having entries 'made in the English language at, or as soon as reasonably practicable after, the end of the journey'. 50. Therefore, it is considered that the Telogis GPS system 'FBT Journey Report' satisfies all the relevant requirements of the definition of 'odometer records' as defined in subsection 136(1). | Conclusion on whether the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10A: 51. As determined previously (at paragraphs 44 and 50 of this Ruling respectively), the Telogis GPS system 'FBT Journey Reports' are 'log book records' and 'odometer records' for the purposes of paragraph 10A(a). 52. It is also accepted, in the absence of any evidence to the contrary in a particular case, that all remaining applicable requirements of section 10A will be met by employers using the Telogis GPS system 'FBT Journey Report'. 53. An employer using the Telogis GPS system 'FBT Journey Report' is, consequently, entitled to a reduction of the operating costs of a car on account of business journeys, in a log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10A. | Does the Telogis GPS system 'FBT Journey Report' meet the relevant requirements of section 10B?: 54. Section 10B states: 55. As determined previously (at paragraph 50 of this Ruling) the Telogis GPS system 'FBT Journey Report' will satisfy the definition of the term 'odometer records' in subsection 136(1). For the reasons mentioned at paragraphs 46 to 49 of this Ruling, it is considered that the Telogis GPS system 'FBT Journey Report' will meet the definition of 'odometer records' for the purposes of paragraph 10B(a). 56. It is also accepted, in the absence of any evidence to the contrary in a particular case, that all remaining requirements of section 10B will be met by employers using the Telogis GPS system 'FBT Journey Report'. | Conclusion on whether the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10B: 57. An employer using the Telogis GPS system 'FBT Journey Report' is, consequently, entitled to a reduction of the operating costs of a car on account of business journeys, in a non-log book year of tax, as the Telogis GPS system 'FBT Journey Report' meets the relevant requirements of section 10B.


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. | C is the operating cost of the car during the holding period; | R is the amount (if any) of the recipient's payment. | is made in the English language at, or as soon as reasonably practicable after, the end of the journey. | are entered in the English language, at, or as soon as reasonably practicable after, the respective times to which those odometer readings relate. | Appendix 2 - Detailed contents list


Related rulings: TR 2006/10 CR 2013/66
Legislative references: FBTAA 1986 FBTAA 1986 10 FBTAA 1986 10(2) FBTAA 1986 10A FBTAA 1986 10A(a) FBTAA 1986 10B FBTAA 1986 10B(a) FBTAA 1986 136(1) FBTAA 1986 162G FBTAA 1986 162G(1)(b) FBTAA 1986 162H FBTAA 1986 162H(1) ITAA 1997 TAA 1953
Other references: The Macquarie Dictionary, [Online], viewed 9 December 2015, www.macquariedictionary.com.au ATO ID 2002/925