Class Ruling CR 2019/78

What this ruling is about: 1. This Ruling sets out when the Quiktrak (QTK) GPS Tracking System can be utilised to reduce the operating costs in both a logbook and non-logbook year of tax 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 QTK GPS Tracking System are set out in paragraphs 20 to 31 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential 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 QTK GPS Tracking 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 5. This Ruling applies from 1 April 2019 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 136(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: 10. Section 10B requires that in a non-logbook year: 11. A year in which the QTK GPS Tracking System is used will be a 'logbook year of tax' if: 12. The subsequent four years will be a 'non-logbook year of tax' if either dot points in paragraph 11 of this Ruling applies to the first year. Logbook records 13. The QTK GPS Tracking System 'FBT Logbook Report' is a document which satisfies the definition of 'log book records' in subsection 136(1), as over the time the FBT logbook reports are being kept: [4] 14. However, the QTK GPS Tracking System 'FBT Logbook Report' will not be a document which satisfies the definition of 'log book records' in subsection 136(1) if: Odometer records 15. The QTK GPS Tracking System 'FBT Logbook 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 QTK GPS Tracking System is used continuously for: 17. If the QTK GPS Tracking System: 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 QTK GPS Tracking System is used continuously for the whole of the holding period. 19. An employer in a non-logbook year of tax who has used the QTK GPS Tracking System 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. Quiktrak's QTK GPS Tracking System consists of an in-vehicle telematics device which has a built in GPS receiver that is used for capturing GPS locations. The in-vehicle telematics device is hardwired to the electronics system of the car or plugged into the On-board Diagnostics II (OBD-II) Port in order to draw odometer and diagnostic information directly from the vehicle. 22. GPS locations are captured, then used to calculate odometer readings (distance travelled) of the particular car, based upon (as a minimum) an initial odometer reading drawn from the vehicle when the device is installed and subsequent data recorded. 23. For each journey completed, the QTK GPS Tracking System records as a minimum: 24. The QTK GPS Tracking System enables the driver to input the purpose of the journey via an online platform. Both employers and employees can nominate the journeys that are private or personal prior to generating the logbook report via the online platform. 25. In the event that an employee does not input the nature of the particular journey undertaken (that is, for business or private purposes), the QTK GPS Tracking System will automatically allocate the journey as being for private purposes. Trip Report 26. The employer can then use the information contained within the database to generate a 'Trip Report' on a weekly basis at minimum or on demand as required, which details each individual journey undertaken by each vehicle. 27. The 'Trip Report' provides the following information for each journey undertaken in the selected period: 28. An employer will use the QTK GPS Tracking System to produce, in English, a 'Trip Report' for any selected period for each car that has the system fitted and/or each employee who uses the car that has the system fitted. FBT Logbook Report 29. Further to the above, the employer can then use the information contained to generate a 'FBT Logbook Report' which provides details of the calculated business use percentages for the selected period. 30. The FBT Logbook Report provides: 31. Employers using the QTK GPS Tracking System will make an election to treat a current year of tax as a 'log book year of tax'. Commissioner of Taxation 11 December 2019 © 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. Quiktrak's QTK GPS Tracking System consists of an in-vehicle telematics device which has a built in GPS receiver that is used for capturing GPS locations. The in-vehicle telematics device is hardwired to the electronics system of the car or plugged into the On-board Diagnostics II (OBD-II) Port in order to draw odometer and diagnostic information directly from the vehicle. 22. GPS locations are captured, then used to calculate odometer readings (distance travelled) of the particular car, based upon (as a minimum) an initial odometer reading drawn from the vehicle when the device is installed and subsequent data recorded. 23. For each journey completed, the QTK GPS Tracking System records as a minimum: 24. The QTK GPS Tracking System enables the driver to input the purpose of the journey via an online platform. Both employers and employees can nominate the journeys that are private or personal prior to generating the logbook report via the online platform. 25. In the event that an employee does not input the nature of the particular journey undertaken (that is, for business or private purposes), the QTK GPS Tracking System will automatically allocate the journey as being for private purposes. | Trip Report: 26. The employer can then use the information contained within the database to generate a 'Trip Report' on a weekly basis at minimum or on demand as required, which details each individual journey undertaken by each vehicle. 27. The 'Trip Report' provides the following information for each journey undertaken in the selected period: 28. An employer will use the QTK GPS Tracking System to produce, in English, a 'Trip Report' for any selected period for each car that has the system fitted and/or each employee who uses the car that has the system fitted. | FBT Logbook Report: 29. Further to the above, the employer can then use the information contained to generate a 'FBT Logbook Report' which provides details of the calculated business use percentages for the selected period. 30. The FBT Logbook Report provides: 31. Employers using the QTK GPS Tracking System will make an election to treat a current year of tax as a 'log book year of tax'. Commissioner of Taxation 11 December 2019 © 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 Quiktrak (QTK) GPS Tracking System can be utilised to reduce the operating costs in both a logbook and non-logbook year of tax 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 QTK GPS Tracking System are set out in paragraphs 20 to 31 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential 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 QTK GPS Tracking 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: 5. This Ruling applies from 1 April 2019 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 136(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: 10. Section 10B requires that in a non-logbook year: 11. A year in which the QTK GPS Tracking System is used will be a 'logbook year of tax' if: 12. The subsequent four years will be a 'non-logbook year of tax' if either dot points in paragraph 11 of this Ruling applies to the first year. | Logbook records: 13. The QTK GPS Tracking System 'FBT Logbook Report' is a document which satisfies the definition of 'log book records' in subsection 136(1), as over the time the FBT logbook reports are being kept: [4] 14. However, the QTK GPS Tracking System 'FBT Logbook Report' will not be a document which satisfies the definition of 'log book records' in subsection 136(1) if: | Odometer records: 15. The QTK GPS Tracking System 'FBT Logbook 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 QTK GPS Tracking System is used continuously for: 17. If the QTK GPS Tracking System: 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 QTK GPS Tracking System is used continuously for the whole of the holding period. 19. An employer in a non-logbook year of tax who has used the QTK GPS Tracking System 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. Quiktrak's QTK GPS Tracking System consists of an in-vehicle telematics device which has a built in GPS receiver that is used for capturing GPS locations. The in-vehicle telematics device is hardwired to the electronics system of the car or plugged into the On-board Diagnostics II (OBD-II) Port in order to draw odometer and diagnostic information directly from the vehicle. 22. GPS locations are captured, then used to calculate odometer readings (distance travelled) of the particular car, based upon (as a minimum) an initial odometer reading drawn from the vehicle when the device is installed and subsequent data recorded. 23. For each journey completed, the QTK GPS Tracking System records as a minimum: 24. The QTK GPS Tracking System enables the driver to input the purpose of the journey via an online platform. Both employers and employees can nominate the journeys that are private or personal prior to generating the logbook report via the online platform. 25. In the event that an employee does not input the nature of the particular journey undertaken (that is, for business or private purposes), the QTK GPS Tracking System will automatically allocate the journey as being for private purposes. | Trip Report: 26. The employer can then use the information contained within the database to generate a 'Trip Report' on a weekly basis at minimum or on demand as required, which details each individual journey undertaken by each vehicle. 27. The 'Trip Report' provides the following information for each journey undertaken in the selected period: 28. An employer will use the QTK GPS Tracking System to produce, in English, a 'Trip Report' for any selected period for each car that has the system fitted and/or each employee who uses the car that has the system fitted. | FBT Logbook Report: 29. Further to the above, the employer can then use the information contained to generate a 'FBT Logbook Report' which provides details of the calculated business use percentages for the selected period. 30. The FBT Logbook Report provides: 31. Employers using the QTK GPS Tracking System will make an election to treat a current year of tax as a 'log book year of tax'. Commissioner of Taxation 11 December 2019 © 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. | Further, if we think that this Ruling disadvantages you, we may apply the law in a way that is more favourable to you.


Legislative references: FBTAA 1986 10 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