Product Ruling PR 2026/2
Date of effect: 1 July 2024

What this ruling is about: 1. This Ruling sets out the fuel tax credit consequences for fuel tax credit clients of KPMG and Mobile Tracking and Data Pty Ltd (MTData) that specifically use the FTC Automator platform (FTC Automator). 2. All legislative references in this Ruling are to the Fuel Tax Act 2006, unless otherwise indicated. This Ruling does not address the assessability of fuel tax credits for income tax purposes or other taxation obligations. 3. The FTC Automator is a telematics technology-based fuel tax credits product, designed to support apportionment, perform calculations and generate reports. The FTC Automator gathers a range of information and data that can be sourced from the Global Navigation Satellite System (GNSS), including Global Positioning System (GPS) and telematics technology. 4. The FTC Automator can process data from various sources. However, for the purposes of this Ruling, its scope is limited to high-quality high-resolution data obtained from telematics and GPS equipment sourced from MTData  primarily in heavy vehicles, and to a lesser extent, light vehicles  in conjunction with services provided by KPMG. The FTC Automator captures direct measurement of fuel use and has no assumptions or derivation. Specifically, the quantity reported in the FTC Report is obtained by subtracting a later fuel reading from an earlier one, and does not rely on fuel consumption rates, time, or any other estimation method. 5. The methodology to calculate fuel tax credits entitlement does not rely on idle time or idle rate of a vehicle and these are not incorporated into any of the fuel tax credit calculations. 6. Broadly, and subject to paragraphs 17 to 102 of this Ruling, this Ruling addresses whether: Who this Ruling applies to 7. This Ruling applies to you if you are registered for goods and services tax and: 8. This Ruling does not apply to you: 9. Prior to lodging a fuel tax return using the results from the FTC Automator, the client will need to ensure the: 10. The ATO must be promptly informed of any software or system updates or changes that may impact the tax outcomes of the scheme outlined in paragraphs 17 to 102 of this Ruling. Qualifications 11. If a vehicle is equipped with a GPS and telematics system, the data from that system must be used to determine entitlement, and not a percentage calculated from other sources. Some apportionment methods apply based on sample size or cost centre. 12. This Ruling does not address issues arising from system, malware or firmware updates. It also does not apply where such issues remain unresolved, even if mitigation steps were taken and timely notification was provided. 13. This Ruling applies to taxable fuel acquired on or after 1 July 2024 to 30 June 2030 by the class of entities defined in paragraphs 7 and 8 of this Ruling that enter the scheme for the fuel tax credit results from the FTC Automator with source telematics and GPS data from MTData. 14. However, this Ruling only applies to the extent that there is no change in the scheme as described in paragraphs 17 to 102 of this Ruling, or in the entity's involvement in the scheme. If the scheme carried out is materially different from the scheme described at paragraphs 17 to 102 of this Ruling, this Ruling cannot be relied upon and may be withdrawn or modified. 15. Entities who are considering participating in the scheme are advised to confirm with their taxation adviser that changes in the law have not affected this Ruling since it was issued. 16. Subject to paragraph 7 of this Ruling and the qualifications in paragraphs 11 and 12 of this Ruling: 17. The scheme is identified and described in the following documents: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under freedom of information legislation. 18. For the purposes of describing the scheme to which this Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which an entity referred to in paragraph 7 of this Ruling, or any associate of such entity will be a party to, which are a part of the scheme. Overview of the Scheme 19. The FTC Automator is a telematics technology-based fuel tax credits apportionment, calculation and reporting platform that is used internally by KPMG to ascertain fuel use for the purposes of calculating fuel tax credits for their clients. It also incorporates validation and anomaly detection processes that are substantially automated. This is complemented with a manual review to ensure the accuracy of the fuel tax credit claim calculation. 20. FTC Automator ingests telematics data from MTData telematics and GPS devices that are installed primarily in heavy vehicles [1] but also, less frequently, light vehicles. The data is cleansed and validated to facilitate the apportionment of fuel use for the purpose of fuel tax credit calculations. 21. FTC Automator's way of apportioning fuel is based on the cumulative measurement of fuel actually used and whether the fuel was used on or off a public road. The apportionment methodology does not rely on vehicle activity such as idle time (and the related fuel consumption rate) and these are not incorporated into any of the fuel tax credit calculations. Where available, these metrics are captured and displayed and may be used to help validate the results. 22. By exception, where telematics fuel data is not available, fuel consumption rate or distance travelled on public roads (or both) is used to apportion fuel. KPMG takes supplementary steps to calculate and validate fuel tax credit entitlement. 23. The FTC Automator process consists of the following steps: 24. KPMG and MTData implement a 2-step data assurance and validation process: Hardware 25. The following components form the hardware system: 26. The MTData Tracking Unit is connected to the vehicle's on-board diagnostic port or installed via a 3-wire connection. 27. The installation of the device is either by the MTData authorised installer or by the client. Where installed by the client, they are responsible for the correct association of the device to the vehicle. 28. Once the device is installed behind the dashboard and out of reach, the installation is verified through software to confirm that the MTData Tracking Unit is installed and communicating with the network. The verification process includes the device serial number is correct, the installer is required to complete the vehicle name, and vehicle identification number or registration number. Other fields such as vehicle make, model, year and odometer can be completed by a fleet manager. 29. The MTData Tracking Unit collects fleet-related data such as telemetry data, odometer readings, locational data and trip details. This information is fed into MTData's proprietary analytics platform. The platform ingests, processes, stores and delivers data from telematics and Internet of Things devices. This data comprises a mix of both sensor and vehicle-based sources (that is, GNSS and CAN bus data). 30. Data is initially processed via MTData's data management system prior to making it available to KPMG via the Hawk-Eye Application Programming Interface (API) or via a secured file transfer. 31. All requested vehicle data is captured within the Hawk-Eye application. Configuration, records, data upload and validation Data upload 32. High-quality high-resolution telematics data is made available to KPMG either through a secure comma-separated values (CSV) file transfer, or by KPMG accessing the Hawk-Eye Interface to retrieve the data directly. KPMG will upload this data, as well as associated client supplied information such as fuel records, vehicle and asset registers, and any other relevant data to FTC Automator. 33. The data upload frequency depends on the terms and conditions of the KPMG engagement. Configuration 34. The fields for the template to upload MTData data to FTC Automator are: Records 35. Not all data fields required by FTC Automator are available for every vehicle. When this occurs, an assessment is conducted during the validation process. If a vehicle's data is missing mandatory fields, it will be excluded. However, if the data meets the minimum requirements, it will proceed to the next stage of processing. 36. Details such as make, year, model, vehicle type, auxiliary equipment or GVM may not always be present in the telematics dataset. This information is typically found in the asset register. Clients are required to provide fuel usage data and vehicle and asset registers  including GVM and any auxiliary equipment (for example, sleeper cabins, tipping equipment for loading and unloading)  for the relevant claim periods. 37. Uploaded fuel transaction data includes the transaction date, fuel type, volume (litres), location and odometer reading. Vehicle and asset register data includes, but is not limited to, asset registration number, make, model, type, configuration and auxiliary equipment. Additional documentation used to support the client file or to verify time and location accuracy against telematics data may also be included, such as job sheets or fuel statements. Validation 38. Once uploaded, the data is subject to a range of cleansing, validation and quality checks to ensure that the data quality is acceptable for further processing and an accurate fuel tax credits calculation. KPMG will be alerted to vehicles with erroneous data that will need to be reviewed or removed from the sample size. The 'cleaner' data will then be uploaded again for further processing. 39. The validation rules and other quality checks undertaken during this stage include (but are not limited to): Transmission information and data collection 40. MTData's vehicle CAN Interface collects vehicle data as soon as the ignition is turned on. It has a built-in sensor which collects second-by-second GPS locational data, speed, and engine diagnostic inputs. The CAN Interpreter decodes the data into a format which can be used by the MTData Tracking Unit which then sends the data to the Hawk Eye cloud-based application via Telstra's network. 41. Data collection is sourced from the following 2 categories: 42. Where vehicles within a fleet do not have complete fuel and distance data, the distance data is sourced from the GNSS data. 43. The device is tamper-proof to ensure that data cannot be manipulated, and protection measures are in place. Road map data and geofences 44. OpenStreetMap is used in FTC Automator for the road data and then overlaid with road classification [4] , geotunnel and geofence application. 45. As the status of some roads may change over time, there are controls and governance processes in place to review details to ensure they are correct. These are undertaken prior to preparing a fuel tax credit claim to ensure the fuel tax credit entitlements are determined correctly. 46. The geotunnel parameter is set at 30 metres from the middle line on either side of a lane in a public road and is applied to all public road map layer data in the OpenStreetMap shapefiles road data for all of Australia. All GPS points within the geotunnel parameter are classified as being on public roads and all the others as off public, subject to the operation of geofences. 47. In FTC Automator a geofence is used to 'fence' off an area that is not considered a public road. There are KPMG geofences and KPMG client-level geofences. Certain geofences have a limited timeframe. Geofence boundaries are locked. Any changes to the geofence are logged in an audit trail. If an error in the geofence boundary is identified subsequent to a fuel tax credit claim already lodged, a recalculation will occur, and an adjustment or correction made accordingly. 48. KPMG sets relevant geofences based on a combination of geotunnel boundaries, satellite images and land parcel information based on guidance in Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge. If necessary, KPMG will work with the client to set geofences applicable to their business. 49. As all claims are calculated by KPMG in the FTC Automator, KPMG users will review the locational data prior to consulting with the client. This includes reviews for any map anomalies. Where map anomalies are identified, they are rectified and approved by the Tax Lead Advisor. The amount of fuel tax credit is then recalculated. 50. FTC Automator has a visualisation function (hotspot analysis) where the hotspots will appear for the entire fleet by default. Specific selections such as vehicle, location, hot spots or other parameters can be viewed for a trip or routes of the fleet. This function enables KPMG to identify locations that may be incorrectly classified or require classification. Distance calculation for display 51. FTC Automator calculates travel distance by using odometer readings from each GPS ping. For every ping, it subtracts the previous reading from the current one to determine the distance travelled. These distances are then summed for the entire period and classified into on-road and off-road travel. 52. A total daily odometer distance is derived (FTC Report tab 'Vehicle Acty Daily Telematic') and is used to determine whether off public road distance and fuel use is reasonable. This is a way to identify potential anomalies and can easily be mapped to a driver's job sheet or fuel records where odometer readings are available. The distance calculation takes the approach that the transitioning distance, from the last 'ping' reading in an off the public road location to the public road and vice versa, is always classified as the distance travelled on the public road. This parameter (distance) may be used in some circumstances to apportion fuel use. Idle fuel use and idle time 53. Where available, idle fuel use and idle time (FTC Report tabs 'Vehicle Acty Daily Telematic' and 'Fuel Appt Rpt-Telematics') are used to derive the idle fuel consumption rate which is intended for display only and not used in any fuel tax credit calculations. 54. The fuel used-idling information may also be used to detect potential data quality issues. 55. If idle fuel and idle time data shows anomalies, data will be reviewed and if warranted, supporting documentation will also be reviewed to verify data integrity. Any errors will be corrected to ensure data integrity across the product. Fuel consumption rate (public road) 56. Where the use of a fuel consumption rate is necessary to apportion fuel used on the public road, it is defined to include all fuel used on the public road such as driving, idling, and other fuel used captured while the vehicle was not in driving or idling mode. 57. The fuel consumption rate (public road) formula is: (driving fuel used on public road (l) + idling fuel used on public road (l) + non-driving or idling fuel used on public roads (L)) / total distance on public roads (km) Fuel use apportionment and calculation 58. Where vehicle data is available (engine management systems or CAN bus data) it will be used for the fuel use apportionment and calculation. Where CAN bus data for a vehicle is applied to other vehicles then it will only be used in limited circumstances and sufficient governance will be put in place to ensure that the data equally applies to other vehicles. 59. The CAN bus data is relied upon to report fuel use once it has been verified to be acceptable against fuel records. The amount of fuel used in a period is the sum of fuel determined by subtracting an earlier total fuel or fuel usage (millilitres) from a later total fuel or fuel usage (millilitres) for each ping in a period. 60. Where appropriate for heavy vehicles with the listed auxiliary equipment, the ATO-accepted percentages outlined in Practical Compliance Guideline PCG 2016/11 Fuel tax credits  apportioning taxable fuel used in a heavy vehicle with auxiliary equipment will be used. When these percentages are applied, they will not be used in conjunction with another methodology. [5] 61. For vehicles with CAN bus fuel data, the apportionment of fuel use is based on quantity of fuel used and disregards the vehicle activity (driving, idling and time). The apportionment is: 62. For vehicles where only telematics distance data are available and the fuel consumption rate is available from within the fleet vehicles the steps are [8] : 63. The fuel calculation is: 64. The fuel tax credit calculation is: 65. For vehicles where only telematics distance data are available and no fuel consumption data: Apportionment methodology 66. The apportionment methodology is guided by a client's specific facts and circumstances. 67. The apportionment methodology that is based on representativeness of the sampling of vehicles with telematics or GPS data coverage and, which can be for 100% or, a subset of the fleet and which can also be calculated based on cost centres or business activities. 68. In terms of light vehicles, the calculation rule is: Clients with telematics data for every vehicle in their fleet 69. For clients with telematics data (fuel and distance [16] ) for every vehicle (telematics coverage of 100%) in a tax period the apportionment method used is: 70. The fuel tax credit calculation is: Clients with telematics data and distance data for some vehicles, but not their entire fleet 71. For a client with telematics data for less than the entire fleet of vehicles (telematics coverage of less than 100%), the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. The 3 methods that can be used are: Sample-sized based apportionment 72. The fuel tax credit calculation for a sample-sized based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 73. To determine 'total fuel used off public road' and 'total fuel used on public road' for sample size-based apportionment, the following will apply: Cost centre-based and activity-based apportionment 74. The fuel tax credit calculation for cost centre-based and activity-based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 75. For the cost centre-based and activity-based apportionment, a broad extrapolation from a sample of vehicles may not be appropriate as it could skew the off-road fuel use percentages. When a client's business operation requires the cost centre and activity-based approach, applying the following will determine the 'total fuel used off public road' and 'total fuel used on public road': Clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles 76. For clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles, the following applies: Governance, assurance and internal controls 77. To support this Ruling, examples of high-quality high-resolution GPS data, governance, assurance and internal controls, reports and the fuel tax credit results were provided. 78. The FTC Automator has built-in, automated governance and assurance processes. It also requires user intervention to review and rectify any exceptions prior to proceeding to the next step. 79. Controls and governance are in place to ensure: 80. Other governance undertaken includes: 81. As part of ongoing governance to address and resolve any potential anomalies, KPMG reviews all output showing in the Anomaly Report (including the apportionment percentages for each of the vehicles) and either resolves the potential anomaly or accepts it where there is an acceptable explanation based on the evidence available. KPMG verifies any records that support the claim. For example, if the off public road fuel use is considered to be higher than expected, KPMG will verify the routes and fuel use of the vehicle via the fuel records, job sheets, geofence areas, or delivery records to support or, modify the percentages. If an anomaly is not identified, KPMG will still continue review and check some samples against business records to ensure accuracy. 82. Other processes are in place to ensure accuracy and to avoid reliance on data limits or caps. These limits or caps are not used for apportionment as it is based on direct measurement of fuel use specific to each road classification. 83. Other checks are data validation rules including checking and treating data anomalies. The rules include but are not limited to checking for duplications such as vehicle and data information; checking all records and registers; source documents have been uploaded; checking distances and engine times for reasonableness. Fuel tax credit calculation and reporting 84. Where telematics fuel data are available the apportionment is a cumulative measurement of fuel and whether that fuel was used on or off a public road. 85. Where only telematics distance data is available supplementary steps are taken to apportion fuel used. 86. Validation rules are always applied to the data received and KPMG reviews all data, including addressing exceptions and resolving any potential anomalies showing in the 'Anomaly report'. KPMG gathers further evidence if warranted. Once the anomalies and exceptions are resolved, FTC Automator processes the data and calculates the amount of fuel tax credit entitlement in a report generated along with a summary in the user interface. The calculation is: 87. The fuel tax credit rates reference table is based on the fuel tax credit rates published on the ATO website and historical rates on data.gov.au . 88. The fuel tax credits calculation is supported by relevant evidence which may contain further documentation from the client. This aims to clarify and address the reason for any anomalies which are to be accepted or resolved (where applicable). 89. A final fuel tax credits calculation is created in the FTC Report and printed out electronically in portable document format (PDF) or Microsoft Excel format for review and discussed with the client. The PDF or Microsoft Excel file is locked to prevent it from being edited. If any changes are required, KPMG make the changes in the FTC Automator and share the final calculation with the client in an updated PDF or Microsoft Excel report. 90. Only after a discussion explaining all relevant details with the client can a fuel tax credit claim be lodged. This is to ensure that the client understands and agrees with the calculation prior to any fuel tax credit claim being included on a BAS that is lodged with us. The lodgment of the fuel tax credit claim can be made by KPMG on behalf of the client, or by the client as governed by the terms and conditions of the client engagement. 91. The FTC Report that is compiled by FTC Automator and provided to clients. contains multiple sections, comprising of: 92. The FTC Report enables KPMG to check the details, as it can be aligned with driver job sheets or fuel records (or both) for any given day. All these reports are provided to the client for discussion prior to submitting a claim. 93. The telematics information shows the hot spots analysis where routes of the vehicles can be visualised with filters to analyse specific vehicles and dates. 94. The anomaly report outlines potential anomalies in the data for the vehicle and auxiliary equipment. It identifies the date and the location of the anomaly and contains relevant fields to input whether the error has been resolved and the basis for the decision reached. It includes information such as: 95. The Fuel Apportionment Report generated by FTC Automator shows the apportionment percentages, litres allocated for the various uses on and off public roads for the vehicle and auxiliary equipment as following: 96. The FTC calculation tab not only shows the percentages allocated on and off public roads but provides the amount, in dollars, of fuel tax credits allocated to the full rate or, the amount allocated to heavy vehicles for travelling on public roads. 97. An FTC Workpaper is also provided for the apportionment methodology used for all clients. 98. The FTC Workpaper contains multiple sections, comprising of: Record keeping 99. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored for at least 5 years in the KPMG system. All the reports and supporting data can be accessed by the clients for at least 5 years. All of this information is in English. 100. In MTData's Hawk-eye application, the data can be viewed, retrieved, or exported via CSV for analysis in data analytical tools for up to 3 years. This data is retained by MTData for a minimum of 4 years. However, the data available to KPMG is stored in KPMG systems for at least 5 years. 101. Data is archived and replicated to separate regions in Australia to prevent any data loss during a disaster or any down period at a data centre. 102. Clients receive a fuel tax credits report or FTC Workpaper and are advised to retain in their own system for at least 5 years. Commissioner of Taxation 22 April 2026 Use of the FTC Automator for fuel tax credit purposes Whether apportionment is a requirement to work out the entitlement to a fuel tax credit 103. An entity is entitled to a fuel tax credit for taxable fuel (referred to as fuel) that it acquires or manufactures in, or imports into, the indirect tax zone to the extent that the entity does do so for use in carrying on the entity's enterprise. However, to be entitled to a fuel tax credit in respect of the fuel, the entity must be registered or required to be registered for goods and services tax at the time the entity acquires, manufactures or imports the fuel (subsections 41-5(1) and (2)). 104. Section 41-20 confirms that there is no entitlement to a fuel tax credit for fuel to the extent that an entity acquires, manufactures or imports the fuel for use in a light vehicle travelling on a public road. 105. Division 43 sets out how to calculate the amount of a fuel tax credit. Fuel tax credits for fuel acquired for use in heavy vehicles are reduced by the road user charge to the extent that the fuel is for travelling on a public road under subsection 43-10(3). 106. The use of the phrase 'to the extent' in sections 41-5, 41-20 and subsection 43-10(3) contemplates apportionment between fuel acquired for an eligible use and fuel acquired for an ineligible use or uses which may give rise to different rates of fuel tax credit entitlement. 107. To determine the entitlement and the amount of fuel tax credit, an entity that acquires fuel for use in vehicles will need to apportion the fuel between: Principles for apportioning fuel used in a vehicle 108. The Fuel Tax Act 2006 contemplates apportionment but does not prescribe any set method for apportioning fuel between different uses. Fuel Tax Determination FTD 2010/1 Fuel tax: apportionment may apply when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 explains that fuel tax credit entities can use any apportionment method that is fair and reasonable to their circumstances. 109. Paragraph 33 of FTD 2010/1 states: 110. Apportionment of fuel for the purpose of working out an entitlement and calculating the amount of the entitlement are distinct phases. An entity can generally perform separate calculations where there are one or more types of fuel for use in the same or multiple activities. A single calculation may be performed for example, where there is the same type of equipment that uses different types of liquid fuel and at the same fuel consumption rate for both types of fuel. 111. The amount of the entitlement calculated should be the same whether a single step process or a discrete step calculation is performed. The apportionment should not result in more fuel being taken into account than has been acquired, manufactured or imported or used and that the apportionment of fuel is reasonable (for example, fuel used in a heavy vehicle for travelling on public roads is reasonable compared to fuel used off public roads for loading, unloading, or idling purposes). 112. To apportion the fuel an entity has acquired to the different activities for which the fuel was used, a reliable measure can be used as part of an apportionment methodology for calculating the amount of fuel that is acquired for use in an eligible activity. 113. Examples of reliable known measures that can be supported by source documentation include: 114. Although these are commonly used measures, because of the diverse range of eligible activities, paragraph 113 of this Ruling is not an exhaustive list and there may be other measures that are appropriate to an entity's circumstances. There also needs to be assurances in place to ensure that any measure used does not distort results. 115. The FTC Automator is a telematics technology product that can be used as a measure in the apportionment process as it has functionalities for data to be transmitted and events to be categorised on use. It will be a reliable measure provided that: Whether the FTC Automator provides a step in the apportionment of fuel 116. There are 2 types of installation of the device that is used to collect data before it is transmitted to FTC Automator. The installation is either by the MTData authorised installer or by the client. Data is transmitted, formatted, and analysed. The client provides fuel records and vehicle or asset registers relating to the tax period applicable to the relevant data. 117. The reporting of fuel readings is from the vehicle itself via CAN bus, it is not derived or implied. These readings are consistent with that displayed to the driver in the dashboard. Also, fuel invoices for the tax period are supplied to KPMG to support fuel use and for the relevant apportionment of fuel. 118. The validation rules are applied, and the data received by MTData is analysed by KPMG. 119. For vehicles, the apportionment methodology of fuel use is based on whether the client has an entire fleet with telematics coverage, partial fleet coverage of vehicles with telematics or whether the method is appropriate to the business operation (cost centre-based or activity-based). That is: 120. For light vehicles without telematics data there is no fuel tax credit apportionment or calculation performed. There is a calculation rule to ensure that there is no fuel tax credit if there is no telematics data for these vehicles. Fuel tax credits is calculated for fuel used off public roads for light vehicles only where there is telematics data. 121. For a client with telematics data less than the entire fleet of vehicles (telematics coverage of less than 100%) the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. Where a sample size-based method is used, a sample size is used based on the Australian Bureau of Statistics Sample Size Calculator to determine if the telematics coverage is acceptable. Similar to the steps outlined in paragraph 118 of this Ruling, a weighted FTC Automator percentage is determined and the steps involved in the apportionment methodology are outlined in paragraphs 69 to 75 of this Ruling. 122. Where the methodology is based on cost centre or activity approach, the vehicles are categorised into the cost centre or activity group. Applying a similar approach as outlined in paragraphs 69 to 75 of this Ruling, a weighted FTC Automator percentage is applied by dividing total off public road fuel use in vehicles quantified by telematics by total fuel use in vehicles quantified by telematics to vehicles of a similar type and used in a similar manner within those groups. This percentage is then applied to the fuel acquired for each of the vehicles with no telematics coverage within the cost centre or activity group. 123. For heavy vehicles with auxiliary equipment (as per the asset register), the ATO-accepted percentage will be applied where appropriate. 124. FTC Automator using MTData as a GPS data source has a step in the process for apportioning fuel for different uses (on and off public roads and in auxiliary equipment) as part of the methodology that will attract different fuel tax credit rates. 125. As such, the FTC Automator functionality provides a step in the apportionment of fuel based on the categorisation of use. Whether the apportionment methodology is fair and reasonable 126. Paragraph 2.86 of the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 explains that an entity needs to apportion fuel use between eligible and ineligible uses in calculating their fuel tax credit entitlement: 127. We consider that where an entity is required to apportion the use of fuel between eligible and ineligible uses or multiple eligible uses, the use of the words 'to the extent that' allows an entity to choose a method of apportionment that is fair and reasonable in the circumstances. 128. The principles to be applied in identifying situations where apportionment is appropriate in an income tax context, and the method to be employed where apportionment is required, were considered in an income tax context by the High Court in Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 (Ronpibon). The High Court considered what parts of expenses incurred by a taxpayer were referable to gaining or producing assessable income. The High Court considered both the allocation of distinct expenditure to specific activities, and apportionment. 129. Following the principles set out by the High Court in Ronpibon, an entity can use any method to apportion fuel to take into account the requirements of the entitlement and calculation provisions, but that method needs to be fair and reasonable in the circumstances. 130. There may be more than one fair and reasonable basis of apportionment. It follows that the calculation of fuel tax credit entitlements cannot necessarily be carried out with absolute mathematical precision. Rather, an entity is entitled to a fuel tax credit where the other requirements for entitlement are met and, to the extent that an apportionment is required, the amount arrived at is calculated by application of an apportionment method that is fair and reasonable in the circumstances. It is not necessary for an apportionment method to track the intended use of every last drop of fuel. 131. The apportionment methodology applied for FTC Automator is based on whether the entire fleet has telematics coverage or only partial fleet coverage. Also, the apportionment of fuel use depends on whether the method is appropriate to the business operation and whether a sample size-based methodology, cost centre-based or activity-based is considered appropriate. 132. Paragraphs 66 to 75 of this Ruling set out the steps for each apportionment method. The functionality in FTC Automator provides a step in apportioning fuel based on the categorisation of use, that is, fuel used on and off public roads. 133. For vehicles with MTData as the GPS source, the vehicle's location and distance travelled is recorded based on the satellite data. This information is used to determine the total distance travelled and verify location data. 134. No fuel tax credit is calculated or claimed for light vehicles without telematics data. For light vehicles with telematics data, only the off public road usage and fuel is claimed. 135. The classification of the public roads for FTC Automator is based on the views outlined in FTR 2008/1. That is, a public road is a road that is available for use by members of the public. 136. Geofences are reviewed to ensure they are correct. KPMG and the client review the results relating to the road classification prior to a fuel tax credit claim being submitted to us. If any roads have been misclassified a rerun of the fuel tax credit calculation occurs. For geofences set up for the client these are reviewed, and an end date set to ensure the correctness of road classification. Only approved geofences are used for the fuel tax credit calculation. 137. The methodology for the vehicle and equipment that is tracked by the satellites along with CAN bus information to be used by FTC Automator is considered a fair and reasonable apportionment of fuel. It is only fair and reasonable where: 138. Provided all the points in paragraphs 114, 131 to 136 of this Ruling are considered and reviewed regularly, including checks to ensure data and outcomes remain accurate, the apportionment methodology used by the FTC Automator is fair and reasonable. Whether the FTC Automator generates fair and reasonable results for working out the amount of fuel tax credits in Division 43 of the Fuel Tax Act 2006 139. The amount of fuel tax credits is determined with reference to Divisions 41 and 43. The 'fair and reasonable' principle applies in determining the extent of entitlement and the amount of fuel tax credits within these Divisions. 140. FTC Automator applies an apportionment methodology that is fair and reasonable. It has relevant checks and processes to ensure: 141. As a result, the FTC Automator provides fair and reasonable results for working out the amount of fuel tax credit for the class of entities identified in paragraphs 7 to 8 of this Ruling. Whether the amount of fuel tax credits worked out by the FTC Automator can be used in working out the net fuel amount for a tax period 142. The net fuel amount has the meaning given by section 60-5. 143. In working out the net fuel amount under section 60-5, the following formula applies: 144. The apportionment methodology applied within the FTC Automator to the taxable fuel is fair and reasonable in working out the extent of taxable fuel used both on and off public roads. The results generated in respect of that taxable fuel (for vehicles or equipment) are also fair and reasonable, subject to relevant checks and balances, including governance and assurance processes. The results can be used in working out the amount of fuel tax credits for that taxable fuel within Division 43. 145. As the results generated from the FTC Automator can calculate the amount of fuel tax credits for that taxable fuel, it assists in determining fuel tax credits to be included in the calculation of the net fuel amount for a tax period under Division 60. Whether the FTC Report and the FTC Workpaper can be used for record-keeping purposes (but not the only record) 146. Subsection 382-5(1) of Schedule 1 to the TAA provides that you must keep records that record and explain all transactions and other acts you engage in that are relevant to acquisitions (for example, an entitlement to a fuel tax credit). 147. The records must be retained for at least 5 years after the completion of the transactions or acts to which they relate. 148. Subsection 382-5(8) of Schedule 1 to the TAA provides that the records must be in English, or easily translated into English, and enable an entitlement under an indirect tax law, that is, a fuel tax law to be ascertained. 149. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored and accessible for at least 5 years. 150. The FTC Report is compiled by FTC Automator and provided to clients. It contains details of the telematics apportionment, data, anomalies and calculations in multiple sections (refer paragraph 91 of this Ruling). 151. The tabs within the FTC Report show details of telematics information, Anomaly Report, fuel tax credit calculation and summary, FTC summary for BAS and fuel apportionment. 152. Depending upon the relevant tab, it may contain vehicle-related information, location information, tax invoice details including litres, distance, apportionment percentage, fuel usage and allocation, anomalies and relevant action and the fuel tax credit calculation. 153. Although the information is contained within relevant Microsoft Excel spreadsheets by KPMG, it enables the client to review the relevant information in conjunction with services provided by KPMG to identify any issues and their correction and, ensure that the data confirms actual events. The report can be used by KPMG and the client to verify the data apportionment calculations and amount of fuel tax credits. The information contained in the reports can be verified with source documentation. The information can then be used for preparing the fuel tax credit claim. 154. An FTC Workpaper is also provided in addition to the FTC Report for ease of review. 155. The FTC Workpaper also contains multiple sections including the claim, FTC rates, historical claims, fuel and apportionment, fuel usage workpaper, and apportionment rates (refer paragraph 96 of this Ruling). 156. The information (data and calculations) along with the reports are in English. 157. The client receiving the FTC Report or FTC Workpaper are advised to retain in their system for 5 years. 158. The FTC Report and FTC Workpaper are documents that are records for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 159. However, the reports in paragraph 157 of this Ruling will not be the only records that are used in determining apportionment for fuel tax credit purposes or supporting fuel tax credit claims by a client. Other records may include, but are not limited to, source data input information reports, fuel acquisition records (such as tax invoices), confirmation of location and time (such as driver job sheets) and environmental criteria compliance documentation. Summary 160. FTC Automator processes the GPS data sourced from MTData and applies a set methodology in determining the extent of fuel acquired for use in the nominated vehicles and auxiliary equipment. It can then be used in working out the amount of fuel tax credits for those nominated vehicles and auxiliary equipment under Division 43. Note: working out the amount of fuel tax credits will require the correct amount of fuel tax that was payable on the fuel at the rate in force on the relevant day using the table in subsection 43-5(2A). 161. The nominated reports (FTC Report and FTC Workpaper) generated from the FTC Automator can be used as a record (but not the only record) for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 162. There are governance and assurance processes that have demonstrated the accuracy and the fair and reasonable results of the FTC Automator. However, checks must continue to be undertaken regularly to ensure that any software or systems issues are rectified and the outcomes reflect actual events, any outliers or errors are corrected and the results are accurate. Part 4-4  anti-avoidance 163. Provided that the scheme ruled on is entered into and carried out as disclosed in this Ruling, and that the data, inputs and results generated are not manipulated or tailored to obtain fuel tax benefits by taking advantage of the fuel tax law in circumstances other than those intended by the fuel tax law, Part 4-4, Division 75 will not apply. © 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: 19. The FTC Automator is a telematics technology-based fuel tax credits apportionment, calculation and reporting platform that is used internally by KPMG to ascertain fuel use for the purposes of calculating fuel tax credits for their clients. It also incorporates validation and anomaly detection processes that are substantially automated. This is complemented with a manual review to ensure the accuracy of the fuel tax credit claim calculation. 20. FTC Automator ingests telematics data from MTData telematics and GPS devices that are installed primarily in heavy vehicles [1] but also, less frequently, light vehicles. The data is cleansed and validated to facilitate the apportionment of fuel use for the purpose of fuel tax credit calculations. 21. FTC Automator's way of apportioning fuel is based on the cumulative measurement of fuel actually used and whether the fuel was used on or off a public road. The apportionment methodology does not rely on vehicle activity such as idle time (and the related fuel consumption rate) and these are not incorporated into any of the fuel tax credit calculations. Where available, these metrics are captured and displayed and may be used to help validate the results. 22. By exception, where telematics fuel data is not available, fuel consumption rate or distance travelled on public roads (or both) is used to apportion fuel. KPMG takes supplementary steps to calculate and validate fuel tax credit entitlement. 23. The FTC Automator process consists of the following steps: 24. KPMG and MTData implement a 2-step data assurance and validation process: | Hardware: 25. The following components form the hardware system: 26. The MTData Tracking Unit is connected to the vehicle's on-board diagnostic port or installed via a 3-wire connection. 27. The installation of the device is either by the MTData authorised installer or by the client. Where installed by the client, they are responsible for the correct association of the device to the vehicle. 28. Once the device is installed behind the dashboard and out of reach, the installation is verified through software to confirm that the MTData Tracking Unit is installed and communicating with the network. The verification process includes the device serial number is correct, the installer is required to complete the vehicle name, and vehicle identification number or registration number. Other fields such as vehicle make, model, year and odometer can be completed by a fleet manager. 29. The MTData Tracking Unit collects fleet-related data such as telemetry data, odometer readings, locational data and trip details. This information is fed into MTData's proprietary analytics platform. The platform ingests, processes, stores and delivers data from telematics and Internet of Things devices. This data comprises a mix of both sensor and vehicle-based sources (that is, GNSS and CAN bus data). 30. Data is initially processed via MTData's data management system prior to making it available to KPMG via the Hawk-Eye Application Programming Interface (API) or via a secured file transfer. 31. All requested vehicle data is captured within the Hawk-Eye application. | Data upload: 32. High-quality high-resolution telematics data is made available to KPMG either through a secure comma-separated values (CSV) file transfer, or by KPMG accessing the Hawk-Eye Interface to retrieve the data directly. KPMG will upload this data, as well as associated client supplied information such as fuel records, vehicle and asset registers, and any other relevant data to FTC Automator. 33. The data upload frequency depends on the terms and conditions of the KPMG engagement. | Configuration: 34. The fields for the template to upload MTData data to FTC Automator are: | Records: 35. Not all data fields required by FTC Automator are available for every vehicle. When this occurs, an assessment is conducted during the validation process. If a vehicle's data is missing mandatory fields, it will be excluded. However, if the data meets the minimum requirements, it will proceed to the next stage of processing. 36. Details such as make, year, model, vehicle type, auxiliary equipment or GVM may not always be present in the telematics dataset. This information is typically found in the asset register. Clients are required to provide fuel usage data and vehicle and asset registers  including GVM and any auxiliary equipment (for example, sleeper cabins, tipping equipment for loading and unloading)  for the relevant claim periods. 37. Uploaded fuel transaction data includes the transaction date, fuel type, volume (litres), location and odometer reading. Vehicle and asset register data includes, but is not limited to, asset registration number, make, model, type, configuration and auxiliary equipment. Additional documentation used to support the client file or to verify time and location accuracy against telematics data may also be included, such as job sheets or fuel statements. | Validation: 38. Once uploaded, the data is subject to a range of cleansing, validation and quality checks to ensure that the data quality is acceptable for further processing and an accurate fuel tax credits calculation. KPMG will be alerted to vehicles with erroneous data that will need to be reviewed or removed from the sample size. The 'cleaner' data will then be uploaded again for further processing. 39. The validation rules and other quality checks undertaken during this stage include (but are not limited to): | Transmission information and data collection: 40. MTData's vehicle CAN Interface collects vehicle data as soon as the ignition is turned on. It has a built-in sensor which collects second-by-second GPS locational data, speed, and engine diagnostic inputs. The CAN Interpreter decodes the data into a format which can be used by the MTData Tracking Unit which then sends the data to the Hawk Eye cloud-based application via Telstra's network. 41. Data collection is sourced from the following 2 categories: 42. Where vehicles within a fleet do not have complete fuel and distance data, the distance data is sourced from the GNSS data. 43. The device is tamper-proof to ensure that data cannot be manipulated, and protection measures are in place. | Road map data and geofences: 44. OpenStreetMap is used in FTC Automator for the road data and then overlaid with road classification [4] , geotunnel and geofence application. 45. As the status of some roads may change over time, there are controls and governance processes in place to review details to ensure they are correct. These are undertaken prior to preparing a fuel tax credit claim to ensure the fuel tax credit entitlements are determined correctly. 46. The geotunnel parameter is set at 30 metres from the middle line on either side of a lane in a public road and is applied to all public road map layer data in the OpenStreetMap shapefiles road data for all of Australia. All GPS points within the geotunnel parameter are classified as being on public roads and all the others as off public, subject to the operation of geofences. 47. In FTC Automator a geofence is used to 'fence' off an area that is not considered a public road. There are KPMG geofences and KPMG client-level geofences. Certain geofences have a limited timeframe. Geofence boundaries are locked. Any changes to the geofence are logged in an audit trail. If an error in the geofence boundary is identified subsequent to a fuel tax credit claim already lodged, a recalculation will occur, and an adjustment or correction made accordingly. 48. KPMG sets relevant geofences based on a combination of geotunnel boundaries, satellite images and land parcel information based on guidance in Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge. If necessary, KPMG will work with the client to set geofences applicable to their business. 49. As all claims are calculated by KPMG in the FTC Automator, KPMG users will review the locational data prior to consulting with the client. This includes reviews for any map anomalies. Where map anomalies are identified, they are rectified and approved by the Tax Lead Advisor. The amount of fuel tax credit is then recalculated. 50. FTC Automator has a visualisation function (hotspot analysis) where the hotspots will appear for the entire fleet by default. Specific selections such as vehicle, location, hot spots or other parameters can be viewed for a trip or routes of the fleet. This function enables KPMG to identify locations that may be incorrectly classified or require classification. | Distance calculation for display: 51. FTC Automator calculates travel distance by using odometer readings from each GPS ping. For every ping, it subtracts the previous reading from the current one to determine the distance travelled. These distances are then summed for the entire period and classified into on-road and off-road travel. 52. A total daily odometer distance is derived (FTC Report tab 'Vehicle Acty Daily Telematic') and is used to determine whether off public road distance and fuel use is reasonable. This is a way to identify potential anomalies and can easily be mapped to a driver's job sheet or fuel records where odometer readings are available. The distance calculation takes the approach that the transitioning distance, from the last 'ping' reading in an off the public road location to the public road and vice versa, is always classified as the distance travelled on the public road. This parameter (distance) may be used in some circumstances to apportion fuel use. | Idle fuel use and idle time: 53. Where available, idle fuel use and idle time (FTC Report tabs 'Vehicle Acty Daily Telematic' and 'Fuel Appt Rpt-Telematics') are used to derive the idle fuel consumption rate which is intended for display only and not used in any fuel tax credit calculations. 54. The fuel used-idling information may also be used to detect potential data quality issues. 55. If idle fuel and idle time data shows anomalies, data will be reviewed and if warranted, supporting documentation will also be reviewed to verify data integrity. Any errors will be corrected to ensure data integrity across the product. | Fuel consumption rate (public road): 56. Where the use of a fuel consumption rate is necessary to apportion fuel used on the public road, it is defined to include all fuel used on the public road such as driving, idling, and other fuel used captured while the vehicle was not in driving or idling mode. 57. The fuel consumption rate (public road) formula is: (driving fuel used on public road (l) + idling fuel used on public road (l) + non-driving or idling fuel used on public roads (L)) / total distance on public roads (km) | Fuel use apportionment and calculation: 58. Where vehicle data is available (engine management systems or CAN bus data) it will be used for the fuel use apportionment and calculation. Where CAN bus data for a vehicle is applied to other vehicles then it will only be used in limited circumstances and sufficient governance will be put in place to ensure that the data equally applies to other vehicles. 59. The CAN bus data is relied upon to report fuel use once it has been verified to be acceptable against fuel records. The amount of fuel used in a period is the sum of fuel determined by subtracting an earlier total fuel or fuel usage (millilitres) from a later total fuel or fuel usage (millilitres) for each ping in a period. 60. Where appropriate for heavy vehicles with the listed auxiliary equipment, the ATO-accepted percentages outlined in Practical Compliance Guideline PCG 2016/11 Fuel tax credits  apportioning taxable fuel used in a heavy vehicle with auxiliary equipment will be used. When these percentages are applied, they will not be used in conjunction with another methodology. [5] 61. For vehicles with CAN bus fuel data, the apportionment of fuel use is based on quantity of fuel used and disregards the vehicle activity (driving, idling and time). The apportionment is: 62. For vehicles where only telematics distance data are available and the fuel consumption rate is available from within the fleet vehicles the steps are [8] : 63. The fuel calculation is: 64. The fuel tax credit calculation is: 65. For vehicles where only telematics distance data are available and no fuel consumption data: | Apportionment methodology: 66. The apportionment methodology is guided by a client's specific facts and circumstances. 67. The apportionment methodology that is based on representativeness of the sampling of vehicles with telematics or GPS data coverage and, which can be for 100% or, a subset of the fleet and which can also be calculated based on cost centres or business activities. 68. In terms of light vehicles, the calculation rule is: | Clients with telematics data for every vehicle in their fleet: 69. For clients with telematics data (fuel and distance [16] ) for every vehicle (telematics coverage of 100%) in a tax period the apportionment method used is: 70. The fuel tax credit calculation is: | Clients with telematics data and distance data for some vehicles, but not their entire fleet: 71. For a client with telematics data for less than the entire fleet of vehicles (telematics coverage of less than 100%), the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. The 3 methods that can be used are: Sample-sized based apportionment 72. The fuel tax credit calculation for a sample-sized based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 73. To determine 'total fuel used off public road' and 'total fuel used on public road' for sample size-based apportionment, the following will apply: Cost centre-based and activity-based apportionment 74. The fuel tax credit calculation for cost centre-based and activity-based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 75. For the cost centre-based and activity-based apportionment, a broad extrapolation from a sample of vehicles may not be appropriate as it could skew the off-road fuel use percentages. When a client's business operation requires the cost centre and activity-based approach, applying the following will determine the 'total fuel used off public road' and 'total fuel used on public road': Clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles 76. For clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles, the following applies: | Governance, assurance and internal controls: 77. To support this Ruling, examples of high-quality high-resolution GPS data, governance, assurance and internal controls, reports and the fuel tax credit results were provided. 78. The FTC Automator has built-in, automated governance and assurance processes. It also requires user intervention to review and rectify any exceptions prior to proceeding to the next step. 79. Controls and governance are in place to ensure: 80. Other governance undertaken includes: 81. As part of ongoing governance to address and resolve any potential anomalies, KPMG reviews all output showing in the Anomaly Report (including the apportionment percentages for each of the vehicles) and either resolves the potential anomaly or accepts it where there is an acceptable explanation based on the evidence available. KPMG verifies any records that support the claim. For example, if the off public road fuel use is considered to be higher than expected, KPMG will verify the routes and fuel use of the vehicle via the fuel records, job sheets, geofence areas, or delivery records to support or, modify the percentages. If an anomaly is not identified, KPMG will still continue review and check some samples against business records to ensure accuracy. 82. Other processes are in place to ensure accuracy and to avoid reliance on data limits or caps. These limits or caps are not used for apportionment as it is based on direct measurement of fuel use specific to each road classification. 83. Other checks are data validation rules including checking and treating data anomalies. The rules include but are not limited to checking for duplications such as vehicle and data information; checking all records and registers; source documents have been uploaded; checking distances and engine times for reasonableness. | Fuel tax credit calculation and reporting: 84. Where telematics fuel data are available the apportionment is a cumulative measurement of fuel and whether that fuel was used on or off a public road. 85. Where only telematics distance data is available supplementary steps are taken to apportion fuel used. 86. Validation rules are always applied to the data received and KPMG reviews all data, including addressing exceptions and resolving any potential anomalies showing in the 'Anomaly report'. KPMG gathers further evidence if warranted. Once the anomalies and exceptions are resolved, FTC Automator processes the data and calculates the amount of fuel tax credit entitlement in a report generated along with a summary in the user interface. The calculation is: 87. The fuel tax credit rates reference table is based on the fuel tax credit rates published on the ATO website and historical rates on data.gov.au . 88. The fuel tax credits calculation is supported by relevant evidence which may contain further documentation from the client. This aims to clarify and address the reason for any anomalies which are to be accepted or resolved (where applicable). 89. A final fuel tax credits calculation is created in the FTC Report and printed out electronically in portable document format (PDF) or Microsoft Excel format for review and discussed with the client. The PDF or Microsoft Excel file is locked to prevent it from being edited. If any changes are required, KPMG make the changes in the FTC Automator and share the final calculation with the client in an updated PDF or Microsoft Excel report. 90. Only after a discussion explaining all relevant details with the client can a fuel tax credit claim be lodged. This is to ensure that the client understands and agrees with the calculation prior to any fuel tax credit claim being included on a BAS that is lodged with us. The lodgment of the fuel tax credit claim can be made by KPMG on behalf of the client, or by the client as governed by the terms and conditions of the client engagement. 91. The FTC Report that is compiled by FTC Automator and provided to clients. contains multiple sections, comprising of: 92. The FTC Report enables KPMG to check the details, as it can be aligned with driver job sheets or fuel records (or both) for any given day. All these reports are provided to the client for discussion prior to submitting a claim. 93. The telematics information shows the hot spots analysis where routes of the vehicles can be visualised with filters to analyse specific vehicles and dates. 94. The anomaly report outlines potential anomalies in the data for the vehicle and auxiliary equipment. It identifies the date and the location of the anomaly and contains relevant fields to input whether the error has been resolved and the basis for the decision reached. It includes information such as: 95. The Fuel Apportionment Report generated by FTC Automator shows the apportionment percentages, litres allocated for the various uses on and off public roads for the vehicle and auxiliary equipment as following: 96. The FTC calculation tab not only shows the percentages allocated on and off public roads but provides the amount, in dollars, of fuel tax credits allocated to the full rate or, the amount allocated to heavy vehicles for travelling on public roads. 97. An FTC Workpaper is also provided for the apportionment methodology used for all clients. 98. The FTC Workpaper contains multiple sections, comprising of: | Record keeping: 99. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored for at least 5 years in the KPMG system. All the reports and supporting data can be accessed by the clients for at least 5 years. All of this information is in English. 100. In MTData's Hawk-eye application, the data can be viewed, retrieved, or exported via CSV for analysis in data analytical tools for up to 3 years. This data is retained by MTData for a minimum of 4 years. However, the data available to KPMG is stored in KPMG systems for at least 5 years. 101. Data is archived and replicated to separate regions in Australia to prevent any data loss during a disaster or any down period at a data centre. 102. Clients receive a fuel tax credits report or FTC Workpaper and are advised to retain in their own system for at least 5 years. Commissioner of Taxation 22 April 2026 | Whether apportionment is a requirement to work out the entitlement to a fuel tax credit: 103. An entity is entitled to a fuel tax credit for taxable fuel (referred to as fuel) that it acquires or manufactures in, or imports into, the indirect tax zone to the extent that the entity does do so for use in carrying on the entity's enterprise. However, to be entitled to a fuel tax credit in respect of the fuel, the entity must be registered or required to be registered for goods and services tax at the time the entity acquires, manufactures or imports the fuel (subsections 41-5(1) and (2)). 104. Section 41-20 confirms that there is no entitlement to a fuel tax credit for fuel to the extent that an entity acquires, manufactures or imports the fuel for use in a light vehicle travelling on a public road. 105. Division 43 sets out how to calculate the amount of a fuel tax credit. Fuel tax credits for fuel acquired for use in heavy vehicles are reduced by the road user charge to the extent that the fuel is for travelling on a public road under subsection 43-10(3). 106. The use of the phrase 'to the extent' in sections 41-5, 41-20 and subsection 43-10(3) contemplates apportionment between fuel acquired for an eligible use and fuel acquired for an ineligible use or uses which may give rise to different rates of fuel tax credit entitlement. 107. To determine the entitlement and the amount of fuel tax credit, an entity that acquires fuel for use in vehicles will need to apportion the fuel between: | Principles for apportioning fuel used in a vehicle: 108. The Fuel Tax Act 2006 contemplates apportionment but does not prescribe any set method for apportioning fuel between different uses. Fuel Tax Determination FTD 2010/1 Fuel tax: apportionment may apply when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 explains that fuel tax credit entities can use any apportionment method that is fair and reasonable to their circumstances. 109. Paragraph 33 of FTD 2010/1 states: 110. Apportionment of fuel for the purpose of working out an entitlement and calculating the amount of the entitlement are distinct phases. An entity can generally perform separate calculations where there are one or more types of fuel for use in the same or multiple activities. A single calculation may be performed for example, where there is the same type of equipment that uses different types of liquid fuel and at the same fuel consumption rate for both types of fuel. 111. The amount of the entitlement calculated should be the same whether a single step process or a discrete step calculation is performed. The apportionment should not result in more fuel being taken into account than has been acquired, manufactured or imported or used and that the apportionment of fuel is reasonable (for example, fuel used in a heavy vehicle for travelling on public roads is reasonable compared to fuel used off public roads for loading, unloading, or idling purposes). 112. To apportion the fuel an entity has acquired to the different activities for which the fuel was used, a reliable measure can be used as part of an apportionment methodology for calculating the amount of fuel that is acquired for use in an eligible activity. 113. Examples of reliable known measures that can be supported by source documentation include: 114. Although these are commonly used measures, because of the diverse range of eligible activities, paragraph 113 of this Ruling is not an exhaustive list and there may be other measures that are appropriate to an entity's circumstances. There also needs to be assurances in place to ensure that any measure used does not distort results. 115. The FTC Automator is a telematics technology product that can be used as a measure in the apportionment process as it has functionalities for data to be transmitted and events to be categorised on use. It will be a reliable measure provided that: | Whether the FTC Automator provides a step in the apportionment of fuel: 116. There are 2 types of installation of the device that is used to collect data before it is transmitted to FTC Automator. The installation is either by the MTData authorised installer or by the client. Data is transmitted, formatted, and analysed. The client provides fuel records and vehicle or asset registers relating to the tax period applicable to the relevant data. 117. The reporting of fuel readings is from the vehicle itself via CAN bus, it is not derived or implied. These readings are consistent with that displayed to the driver in the dashboard. Also, fuel invoices for the tax period are supplied to KPMG to support fuel use and for the relevant apportionment of fuel. 118. The validation rules are applied, and the data received by MTData is analysed by KPMG. 119. For vehicles, the apportionment methodology of fuel use is based on whether the client has an entire fleet with telematics coverage, partial fleet coverage of vehicles with telematics or whether the method is appropriate to the business operation (cost centre-based or activity-based). That is: 120. For light vehicles without telematics data there is no fuel tax credit apportionment or calculation performed. There is a calculation rule to ensure that there is no fuel tax credit if there is no telematics data for these vehicles. Fuel tax credits is calculated for fuel used off public roads for light vehicles only where there is telematics data. 121. For a client with telematics data less than the entire fleet of vehicles (telematics coverage of less than 100%) the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. Where a sample size-based method is used, a sample size is used based on the Australian Bureau of Statistics Sample Size Calculator to determine if the telematics coverage is acceptable. Similar to the steps outlined in paragraph 118 of this Ruling, a weighted FTC Automator percentage is determined and the steps involved in the apportionment methodology are outlined in paragraphs 69 to 75 of this Ruling. 122. Where the methodology is based on cost centre or activity approach, the vehicles are categorised into the cost centre or activity group. Applying a similar approach as outlined in paragraphs 69 to 75 of this Ruling, a weighted FTC Automator percentage is applied by dividing total off public road fuel use in vehicles quantified by telematics by total fuel use in vehicles quantified by telematics to vehicles of a similar type and used in a similar manner within those groups. This percentage is then applied to the fuel acquired for each of the vehicles with no telematics coverage within the cost centre or activity group. 123. For heavy vehicles with auxiliary equipment (as per the asset register), the ATO-accepted percentage will be applied where appropriate. 124. FTC Automator using MTData as a GPS data source has a step in the process for apportioning fuel for different uses (on and off public roads and in auxiliary equipment) as part of the methodology that will attract different fuel tax credit rates. 125. As such, the FTC Automator functionality provides a step in the apportionment of fuel based on the categorisation of use. | Whether the apportionment methodology is fair and reasonable: 126. Paragraph 2.86 of the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 explains that an entity needs to apportion fuel use between eligible and ineligible uses in calculating their fuel tax credit entitlement: 127. We consider that where an entity is required to apportion the use of fuel between eligible and ineligible uses or multiple eligible uses, the use of the words 'to the extent that' allows an entity to choose a method of apportionment that is fair and reasonable in the circumstances. 128. The principles to be applied in identifying situations where apportionment is appropriate in an income tax context, and the method to be employed where apportionment is required, were considered in an income tax context by the High Court in Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 (Ronpibon). The High Court considered what parts of expenses incurred by a taxpayer were referable to gaining or producing assessable income. The High Court considered both the allocation of distinct expenditure to specific activities, and apportionment. 129. Following the principles set out by the High Court in Ronpibon, an entity can use any method to apportion fuel to take into account the requirements of the entitlement and calculation provisions, but that method needs to be fair and reasonable in the circumstances. 130. There may be more than one fair and reasonable basis of apportionment. It follows that the calculation of fuel tax credit entitlements cannot necessarily be carried out with absolute mathematical precision. Rather, an entity is entitled to a fuel tax credit where the other requirements for entitlement are met and, to the extent that an apportionment is required, the amount arrived at is calculated by application of an apportionment method that is fair and reasonable in the circumstances. It is not necessary for an apportionment method to track the intended use of every last drop of fuel. 131. The apportionment methodology applied for FTC Automator is based on whether the entire fleet has telematics coverage or only partial fleet coverage. Also, the apportionment of fuel use depends on whether the method is appropriate to the business operation and whether a sample size-based methodology, cost centre-based or activity-based is considered appropriate. 132. Paragraphs 66 to 75 of this Ruling set out the steps for each apportionment method. The functionality in FTC Automator provides a step in apportioning fuel based on the categorisation of use, that is, fuel used on and off public roads. 133. For vehicles with MTData as the GPS source, the vehicle's location and distance travelled is recorded based on the satellite data. This information is used to determine the total distance travelled and verify location data. 134. No fuel tax credit is calculated or claimed for light vehicles without telematics data. For light vehicles with telematics data, only the off public road usage and fuel is claimed. 135. The classification of the public roads for FTC Automator is based on the views outlined in FTR 2008/1. That is, a public road is a road that is available for use by members of the public. 136. Geofences are reviewed to ensure they are correct. KPMG and the client review the results relating to the road classification prior to a fuel tax credit claim being submitted to us. If any roads have been misclassified a rerun of the fuel tax credit calculation occurs. For geofences set up for the client these are reviewed, and an end date set to ensure the correctness of road classification. Only approved geofences are used for the fuel tax credit calculation. 137. The methodology for the vehicle and equipment that is tracked by the satellites along with CAN bus information to be used by FTC Automator is considered a fair and reasonable apportionment of fuel. It is only fair and reasonable where: 138. Provided all the points in paragraphs 114, 131 to 136 of this Ruling are considered and reviewed regularly, including checks to ensure data and outcomes remain accurate, the apportionment methodology used by the FTC Automator is fair and reasonable. | Whether the FTC Automator generates fair and reasonable results for working out the amount of fuel tax credits in Division 43 of the Fuel Tax Act 2006: 139. The amount of fuel tax credits is determined with reference to Divisions 41 and 43. The 'fair and reasonable' principle applies in determining the extent of entitlement and the amount of fuel tax credits within these Divisions. 140. FTC Automator applies an apportionment methodology that is fair and reasonable. It has relevant checks and processes to ensure: 141. As a result, the FTC Automator provides fair and reasonable results for working out the amount of fuel tax credit for the class of entities identified in paragraphs 7 to 8 of this Ruling. | Whether the amount of fuel tax credits worked out by the FTC Automator can be used in working out the net fuel amount for a tax period: 142. The net fuel amount has the meaning given by section 60-5. 143. In working out the net fuel amount under section 60-5, the following formula applies: 144. The apportionment methodology applied within the FTC Automator to the taxable fuel is fair and reasonable in working out the extent of taxable fuel used both on and off public roads. The results generated in respect of that taxable fuel (for vehicles or equipment) are also fair and reasonable, subject to relevant checks and balances, including governance and assurance processes. The results can be used in working out the amount of fuel tax credits for that taxable fuel within Division 43. 145. As the results generated from the FTC Automator can calculate the amount of fuel tax credits for that taxable fuel, it assists in determining fuel tax credits to be included in the calculation of the net fuel amount for a tax period under Division 60. | Whether the FTC Report and the FTC Workpaper can be used for record-keeping purposes (but not the only record): 146. Subsection 382-5(1) of Schedule 1 to the TAA provides that you must keep records that record and explain all transactions and other acts you engage in that are relevant to acquisitions (for example, an entitlement to a fuel tax credit). 147. The records must be retained for at least 5 years after the completion of the transactions or acts to which they relate. 148. Subsection 382-5(8) of Schedule 1 to the TAA provides that the records must be in English, or easily translated into English, and enable an entitlement under an indirect tax law, that is, a fuel tax law to be ascertained. 149. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored and accessible for at least 5 years. 150. The FTC Report is compiled by FTC Automator and provided to clients. It contains details of the telematics apportionment, data, anomalies and calculations in multiple sections (refer paragraph 91 of this Ruling). 151. The tabs within the FTC Report show details of telematics information, Anomaly Report, fuel tax credit calculation and summary, FTC summary for BAS and fuel apportionment. 152. Depending upon the relevant tab, it may contain vehicle-related information, location information, tax invoice details including litres, distance, apportionment percentage, fuel usage and allocation, anomalies and relevant action and the fuel tax credit calculation. 153. Although the information is contained within relevant Microsoft Excel spreadsheets by KPMG, it enables the client to review the relevant information in conjunction with services provided by KPMG to identify any issues and their correction and, ensure that the data confirms actual events. The report can be used by KPMG and the client to verify the data apportionment calculations and amount of fuel tax credits. The information contained in the reports can be verified with source documentation. The information can then be used for preparing the fuel tax credit claim. 154. An FTC Workpaper is also provided in addition to the FTC Report for ease of review. 155. The FTC Workpaper also contains multiple sections including the claim, FTC rates, historical claims, fuel and apportionment, fuel usage workpaper, and apportionment rates (refer paragraph 96 of this Ruling). 156. The information (data and calculations) along with the reports are in English. 157. The client receiving the FTC Report or FTC Workpaper are advised to retain in their system for 5 years. 158. The FTC Report and FTC Workpaper are documents that are records for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 159. However, the reports in paragraph 157 of this Ruling will not be the only records that are used in determining apportionment for fuel tax credit purposes or supporting fuel tax credit claims by a client. Other records may include, but are not limited to, source data input information reports, fuel acquisition records (such as tax invoices), confirmation of location and time (such as driver job sheets) and environmental criteria compliance documentation. | Summary: 160. FTC Automator processes the GPS data sourced from MTData and applies a set methodology in determining the extent of fuel acquired for use in the nominated vehicles and auxiliary equipment. It can then be used in working out the amount of fuel tax credits for those nominated vehicles and auxiliary equipment under Division 43. Note: working out the amount of fuel tax credits will require the correct amount of fuel tax that was payable on the fuel at the rate in force on the relevant day using the table in subsection 43-5(2A). 161. The nominated reports (FTC Report and FTC Workpaper) generated from the FTC Automator can be used as a record (but not the only record) for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 162. There are governance and assurance processes that have demonstrated the accuracy and the fair and reasonable results of the FTC Automator. However, checks must continue to be undertaken regularly to ensure that any software or systems issues are rectified and the outcomes reflect actual events, any outliers or errors are corrected and the results are accurate. | Part 4-4  anti-avoidance: 163. Provided that the scheme ruled on is entered into and carried out as disclosed in this Ruling, and that the data, inputs and results generated are not manipulated or tailored to obtain fuel tax benefits by taking advantage of the fuel tax law in circumstances other than those intended by the fuel tax law, Part 4-4, Division 75 will not apply. © 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 the fuel tax credit consequences for fuel tax credit clients of KPMG and Mobile Tracking and Data Pty Ltd (MTData) that specifically use the FTC Automator platform (FTC Automator). 2. All legislative references in this Ruling are to the Fuel Tax Act 2006, unless otherwise indicated. This Ruling does not address the assessability of fuel tax credits for income tax purposes or other taxation obligations. 3. The FTC Automator is a telematics technology-based fuel tax credits product, designed to support apportionment, perform calculations and generate reports. The FTC Automator gathers a range of information and data that can be sourced from the Global Navigation Satellite System (GNSS), including Global Positioning System (GPS) and telematics technology. 4. The FTC Automator can process data from various sources. However, for the purposes of this Ruling, its scope is limited to high-quality high-resolution data obtained from telematics and GPS equipment sourced from MTData  primarily in heavy vehicles, and to a lesser extent, light vehicles  in conjunction with services provided by KPMG. The FTC Automator captures direct measurement of fuel use and has no assumptions or derivation. Specifically, the quantity reported in the FTC Report is obtained by subtracting a later fuel reading from an earlier one, and does not rely on fuel consumption rates, time, or any other estimation method. 5. The methodology to calculate fuel tax credits entitlement does not rely on idle time or idle rate of a vehicle and these are not incorporated into any of the fuel tax credit calculations. 6. Broadly, and subject to paragraphs 17 to 102 of this Ruling, this Ruling addresses whether: | Who this Ruling applies to: 7. This Ruling applies to you if you are registered for goods and services tax and: 8. This Ruling does not apply to you: 9. Prior to lodging a fuel tax return using the results from the FTC Automator, the client will need to ensure the: 10. The ATO must be promptly informed of any software or system updates or changes that may impact the tax outcomes of the scheme outlined in paragraphs 17 to 102 of this Ruling. | Qualifications: 11. If a vehicle is equipped with a GPS and telematics system, the data from that system must be used to determine entitlement, and not a percentage calculated from other sources. Some apportionment methods apply based on sample size or cost centre. 12. This Ruling does not address issues arising from system, malware or firmware updates. It also does not apply where such issues remain unresolved, even if mitigation steps were taken and timely notification was provided. 13. This Ruling applies to taxable fuel acquired on or after 1 July 2024 to 30 June 2030 by the class of entities defined in paragraphs 7 and 8 of this Ruling that enter the scheme for the fuel tax credit results from the FTC Automator with source telematics and GPS data from MTData. 14. However, this Ruling only applies to the extent that there is no change in the scheme as described in paragraphs 17 to 102 of this Ruling, or in the entity's involvement in the scheme. If the scheme carried out is materially different from the scheme described at paragraphs 17 to 102 of this Ruling, this Ruling cannot be relied upon and may be withdrawn or modified. 15. Entities who are considering participating in the scheme are advised to confirm with their taxation adviser that changes in the law have not affected this Ruling since it was issued. 16. Subject to paragraph 7 of this Ruling and the qualifications in paragraphs 11 and 12 of this Ruling: 17. The scheme is identified and described in the following documents: Note: certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under freedom of information legislation. 18. For the purposes of describing the scheme to which this Ruling applies, there are no other agreements, whether formal or informal, and whether or not legally enforceable, which an entity referred to in paragraph 7 of this Ruling, or any associate of such entity will be a party to, which are a part of the scheme. | Overview of the Scheme: 19. The FTC Automator is a telematics technology-based fuel tax credits apportionment, calculation and reporting platform that is used internally by KPMG to ascertain fuel use for the purposes of calculating fuel tax credits for their clients. It also incorporates validation and anomaly detection processes that are substantially automated. This is complemented with a manual review to ensure the accuracy of the fuel tax credit claim calculation. 20. FTC Automator ingests telematics data from MTData telematics and GPS devices that are installed primarily in heavy vehicles [1] but also, less frequently, light vehicles. The data is cleansed and validated to facilitate the apportionment of fuel use for the purpose of fuel tax credit calculations. 21. FTC Automator's way of apportioning fuel is based on the cumulative measurement of fuel actually used and whether the fuel was used on or off a public road. The apportionment methodology does not rely on vehicle activity such as idle time (and the related fuel consumption rate) and these are not incorporated into any of the fuel tax credit calculations. Where available, these metrics are captured and displayed and may be used to help validate the results. 22. By exception, where telematics fuel data is not available, fuel consumption rate or distance travelled on public roads (or both) is used to apportion fuel. KPMG takes supplementary steps to calculate and validate fuel tax credit entitlement. 23. The FTC Automator process consists of the following steps: 24. KPMG and MTData implement a 2-step data assurance and validation process: | Hardware: 25. The following components form the hardware system: 26. The MTData Tracking Unit is connected to the vehicle's on-board diagnostic port or installed via a 3-wire connection. 27. The installation of the device is either by the MTData authorised installer or by the client. Where installed by the client, they are responsible for the correct association of the device to the vehicle. 28. Once the device is installed behind the dashboard and out of reach, the installation is verified through software to confirm that the MTData Tracking Unit is installed and communicating with the network. The verification process includes the device serial number is correct, the installer is required to complete the vehicle name, and vehicle identification number or registration number. Other fields such as vehicle make, model, year and odometer can be completed by a fleet manager. 29. The MTData Tracking Unit collects fleet-related data such as telemetry data, odometer readings, locational data and trip details. This information is fed into MTData's proprietary analytics platform. The platform ingests, processes, stores and delivers data from telematics and Internet of Things devices. This data comprises a mix of both sensor and vehicle-based sources (that is, GNSS and CAN bus data). 30. Data is initially processed via MTData's data management system prior to making it available to KPMG via the Hawk-Eye Application Programming Interface (API) or via a secured file transfer. 31. All requested vehicle data is captured within the Hawk-Eye application. | Data upload: 32. High-quality high-resolution telematics data is made available to KPMG either through a secure comma-separated values (CSV) file transfer, or by KPMG accessing the Hawk-Eye Interface to retrieve the data directly. KPMG will upload this data, as well as associated client supplied information such as fuel records, vehicle and asset registers, and any other relevant data to FTC Automator. 33. The data upload frequency depends on the terms and conditions of the KPMG engagement. | Configuration: 34. The fields for the template to upload MTData data to FTC Automator are: | Records: 35. Not all data fields required by FTC Automator are available for every vehicle. When this occurs, an assessment is conducted during the validation process. If a vehicle's data is missing mandatory fields, it will be excluded. However, if the data meets the minimum requirements, it will proceed to the next stage of processing. 36. Details such as make, year, model, vehicle type, auxiliary equipment or GVM may not always be present in the telematics dataset. This information is typically found in the asset register. Clients are required to provide fuel usage data and vehicle and asset registers  including GVM and any auxiliary equipment (for example, sleeper cabins, tipping equipment for loading and unloading)  for the relevant claim periods. 37. Uploaded fuel transaction data includes the transaction date, fuel type, volume (litres), location and odometer reading. Vehicle and asset register data includes, but is not limited to, asset registration number, make, model, type, configuration and auxiliary equipment. Additional documentation used to support the client file or to verify time and location accuracy against telematics data may also be included, such as job sheets or fuel statements. | Validation: 38. Once uploaded, the data is subject to a range of cleansing, validation and quality checks to ensure that the data quality is acceptable for further processing and an accurate fuel tax credits calculation. KPMG will be alerted to vehicles with erroneous data that will need to be reviewed or removed from the sample size. The 'cleaner' data will then be uploaded again for further processing. 39. The validation rules and other quality checks undertaken during this stage include (but are not limited to): | Transmission information and data collection: 40. MTData's vehicle CAN Interface collects vehicle data as soon as the ignition is turned on. It has a built-in sensor which collects second-by-second GPS locational data, speed, and engine diagnostic inputs. The CAN Interpreter decodes the data into a format which can be used by the MTData Tracking Unit which then sends the data to the Hawk Eye cloud-based application via Telstra's network. 41. Data collection is sourced from the following 2 categories: 42. Where vehicles within a fleet do not have complete fuel and distance data, the distance data is sourced from the GNSS data. 43. The device is tamper-proof to ensure that data cannot be manipulated, and protection measures are in place. | Road map data and geofences: 44. OpenStreetMap is used in FTC Automator for the road data and then overlaid with road classification [4] , geotunnel and geofence application. 45. As the status of some roads may change over time, there are controls and governance processes in place to review details to ensure they are correct. These are undertaken prior to preparing a fuel tax credit claim to ensure the fuel tax credit entitlements are determined correctly. 46. The geotunnel parameter is set at 30 metres from the middle line on either side of a lane in a public road and is applied to all public road map layer data in the OpenStreetMap shapefiles road data for all of Australia. All GPS points within the geotunnel parameter are classified as being on public roads and all the others as off public, subject to the operation of geofences. 47. In FTC Automator a geofence is used to 'fence' off an area that is not considered a public road. There are KPMG geofences and KPMG client-level geofences. Certain geofences have a limited timeframe. Geofence boundaries are locked. Any changes to the geofence are logged in an audit trail. If an error in the geofence boundary is identified subsequent to a fuel tax credit claim already lodged, a recalculation will occur, and an adjustment or correction made accordingly. 48. KPMG sets relevant geofences based on a combination of geotunnel boundaries, satellite images and land parcel information based on guidance in Fuel Tax Ruling FTR 2008/1 Fuel tax: vehicle's travel on a public road that is incidental to the vehicle's main use and the road user charge. If necessary, KPMG will work with the client to set geofences applicable to their business. 49. As all claims are calculated by KPMG in the FTC Automator, KPMG users will review the locational data prior to consulting with the client. This includes reviews for any map anomalies. Where map anomalies are identified, they are rectified and approved by the Tax Lead Advisor. The amount of fuel tax credit is then recalculated. 50. FTC Automator has a visualisation function (hotspot analysis) where the hotspots will appear for the entire fleet by default. Specific selections such as vehicle, location, hot spots or other parameters can be viewed for a trip or routes of the fleet. This function enables KPMG to identify locations that may be incorrectly classified or require classification. | Distance calculation for display: 51. FTC Automator calculates travel distance by using odometer readings from each GPS ping. For every ping, it subtracts the previous reading from the current one to determine the distance travelled. These distances are then summed for the entire period and classified into on-road and off-road travel. 52. A total daily odometer distance is derived (FTC Report tab 'Vehicle Acty Daily Telematic') and is used to determine whether off public road distance and fuel use is reasonable. This is a way to identify potential anomalies and can easily be mapped to a driver's job sheet or fuel records where odometer readings are available. The distance calculation takes the approach that the transitioning distance, from the last 'ping' reading in an off the public road location to the public road and vice versa, is always classified as the distance travelled on the public road. This parameter (distance) may be used in some circumstances to apportion fuel use. | Idle fuel use and idle time: 53. Where available, idle fuel use and idle time (FTC Report tabs 'Vehicle Acty Daily Telematic' and 'Fuel Appt Rpt-Telematics') are used to derive the idle fuel consumption rate which is intended for display only and not used in any fuel tax credit calculations. 54. The fuel used-idling information may also be used to detect potential data quality issues. 55. If idle fuel and idle time data shows anomalies, data will be reviewed and if warranted, supporting documentation will also be reviewed to verify data integrity. Any errors will be corrected to ensure data integrity across the product. | Fuel consumption rate (public road): 56. Where the use of a fuel consumption rate is necessary to apportion fuel used on the public road, it is defined to include all fuel used on the public road such as driving, idling, and other fuel used captured while the vehicle was not in driving or idling mode. 57. The fuel consumption rate (public road) formula is: (driving fuel used on public road (l) + idling fuel used on public road (l) + non-driving or idling fuel used on public roads (L)) / total distance on public roads (km) | Fuel use apportionment and calculation: 58. Where vehicle data is available (engine management systems or CAN bus data) it will be used for the fuel use apportionment and calculation. Where CAN bus data for a vehicle is applied to other vehicles then it will only be used in limited circumstances and sufficient governance will be put in place to ensure that the data equally applies to other vehicles. 59. The CAN bus data is relied upon to report fuel use once it has been verified to be acceptable against fuel records. The amount of fuel used in a period is the sum of fuel determined by subtracting an earlier total fuel or fuel usage (millilitres) from a later total fuel or fuel usage (millilitres) for each ping in a period. 60. Where appropriate for heavy vehicles with the listed auxiliary equipment, the ATO-accepted percentages outlined in Practical Compliance Guideline PCG 2016/11 Fuel tax credits  apportioning taxable fuel used in a heavy vehicle with auxiliary equipment will be used. When these percentages are applied, they will not be used in conjunction with another methodology. [5] 61. For vehicles with CAN bus fuel data, the apportionment of fuel use is based on quantity of fuel used and disregards the vehicle activity (driving, idling and time). The apportionment is: 62. For vehicles where only telematics distance data are available and the fuel consumption rate is available from within the fleet vehicles the steps are [8] : 63. The fuel calculation is: 64. The fuel tax credit calculation is: 65. For vehicles where only telematics distance data are available and no fuel consumption data: | Apportionment methodology: 66. The apportionment methodology is guided by a client's specific facts and circumstances. 67. The apportionment methodology that is based on representativeness of the sampling of vehicles with telematics or GPS data coverage and, which can be for 100% or, a subset of the fleet and which can also be calculated based on cost centres or business activities. 68. In terms of light vehicles, the calculation rule is: | Clients with telematics data for every vehicle in their fleet: 69. For clients with telematics data (fuel and distance [16] ) for every vehicle (telematics coverage of 100%) in a tax period the apportionment method used is: 70. The fuel tax credit calculation is: | Clients with telematics data and distance data for some vehicles, but not their entire fleet: 71. For a client with telematics data for less than the entire fleet of vehicles (telematics coverage of less than 100%), the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. The 3 methods that can be used are: Sample-sized based apportionment 72. The fuel tax credit calculation for a sample-sized based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 73. To determine 'total fuel used off public road' and 'total fuel used on public road' for sample size-based apportionment, the following will apply: Cost centre-based and activity-based apportionment 74. The fuel tax credit calculation for cost centre-based and activity-based apportionment is: total fuel tax credits = (on public road fuel tax credit rate total fuel used on public road) + (all other business use (off-road) rate total fuel used off public road) 75. For the cost centre-based and activity-based apportionment, a broad extrapolation from a sample of vehicles may not be appropriate as it could skew the off-road fuel use percentages. When a client's business operation requires the cost centre and activity-based approach, applying the following will determine the 'total fuel used off public road' and 'total fuel used on public road': Clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles 76. For clients where only telematics distance data are available and the fuel consumption rate is available for the fleet's vehicles, the following applies: | Governance, assurance and internal controls: 77. To support this Ruling, examples of high-quality high-resolution GPS data, governance, assurance and internal controls, reports and the fuel tax credit results were provided. 78. The FTC Automator has built-in, automated governance and assurance processes. It also requires user intervention to review and rectify any exceptions prior to proceeding to the next step. 79. Controls and governance are in place to ensure: 80. Other governance undertaken includes: 81. As part of ongoing governance to address and resolve any potential anomalies, KPMG reviews all output showing in the Anomaly Report (including the apportionment percentages for each of the vehicles) and either resolves the potential anomaly or accepts it where there is an acceptable explanation based on the evidence available. KPMG verifies any records that support the claim. For example, if the off public road fuel use is considered to be higher than expected, KPMG will verify the routes and fuel use of the vehicle via the fuel records, job sheets, geofence areas, or delivery records to support or, modify the percentages. If an anomaly is not identified, KPMG will still continue review and check some samples against business records to ensure accuracy. 82. Other processes are in place to ensure accuracy and to avoid reliance on data limits or caps. These limits or caps are not used for apportionment as it is based on direct measurement of fuel use specific to each road classification. 83. Other checks are data validation rules including checking and treating data anomalies. The rules include but are not limited to checking for duplications such as vehicle and data information; checking all records and registers; source documents have been uploaded; checking distances and engine times for reasonableness. | Fuel tax credit calculation and reporting: 84. Where telematics fuel data are available the apportionment is a cumulative measurement of fuel and whether that fuel was used on or off a public road. 85. Where only telematics distance data is available supplementary steps are taken to apportion fuel used. 86. Validation rules are always applied to the data received and KPMG reviews all data, including addressing exceptions and resolving any potential anomalies showing in the 'Anomaly report'. KPMG gathers further evidence if warranted. Once the anomalies and exceptions are resolved, FTC Automator processes the data and calculates the amount of fuel tax credit entitlement in a report generated along with a summary in the user interface. The calculation is: 87. The fuel tax credit rates reference table is based on the fuel tax credit rates published on the ATO website and historical rates on data.gov.au . 88. The fuel tax credits calculation is supported by relevant evidence which may contain further documentation from the client. This aims to clarify and address the reason for any anomalies which are to be accepted or resolved (where applicable). 89. A final fuel tax credits calculation is created in the FTC Report and printed out electronically in portable document format (PDF) or Microsoft Excel format for review and discussed with the client. The PDF or Microsoft Excel file is locked to prevent it from being edited. If any changes are required, KPMG make the changes in the FTC Automator and share the final calculation with the client in an updated PDF or Microsoft Excel report. 90. Only after a discussion explaining all relevant details with the client can a fuel tax credit claim be lodged. This is to ensure that the client understands and agrees with the calculation prior to any fuel tax credit claim being included on a BAS that is lodged with us. The lodgment of the fuel tax credit claim can be made by KPMG on behalf of the client, or by the client as governed by the terms and conditions of the client engagement. 91. The FTC Report that is compiled by FTC Automator and provided to clients. contains multiple sections, comprising of: 92. The FTC Report enables KPMG to check the details, as it can be aligned with driver job sheets or fuel records (or both) for any given day. All these reports are provided to the client for discussion prior to submitting a claim. 93. The telematics information shows the hot spots analysis where routes of the vehicles can be visualised with filters to analyse specific vehicles and dates. 94. The anomaly report outlines potential anomalies in the data for the vehicle and auxiliary equipment. It identifies the date and the location of the anomaly and contains relevant fields to input whether the error has been resolved and the basis for the decision reached. It includes information such as: 95. The Fuel Apportionment Report generated by FTC Automator shows the apportionment percentages, litres allocated for the various uses on and off public roads for the vehicle and auxiliary equipment as following: 96. The FTC calculation tab not only shows the percentages allocated on and off public roads but provides the amount, in dollars, of fuel tax credits allocated to the full rate or, the amount allocated to heavy vehicles for travelling on public roads. 97. An FTC Workpaper is also provided for the apportionment methodology used for all clients. 98. The FTC Workpaper contains multiple sections, comprising of: | Record keeping: 99. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored for at least 5 years in the KPMG system. All the reports and supporting data can be accessed by the clients for at least 5 years. All of this information is in English. 100. In MTData's Hawk-eye application, the data can be viewed, retrieved, or exported via CSV for analysis in data analytical tools for up to 3 years. This data is retained by MTData for a minimum of 4 years. However, the data available to KPMG is stored in KPMG systems for at least 5 years. 101. Data is archived and replicated to separate regions in Australia to prevent any data loss during a disaster or any down period at a data centre. 102. Clients receive a fuel tax credits report or FTC Workpaper and are advised to retain in their own system for at least 5 years. Commissioner of Taxation 22 April 2026 | Whether apportionment is a requirement to work out the entitlement to a fuel tax credit: 103. An entity is entitled to a fuel tax credit for taxable fuel (referred to as fuel) that it acquires or manufactures in, or imports into, the indirect tax zone to the extent that the entity does do so for use in carrying on the entity's enterprise. However, to be entitled to a fuel tax credit in respect of the fuel, the entity must be registered or required to be registered for goods and services tax at the time the entity acquires, manufactures or imports the fuel (subsections 41-5(1) and (2)). 104. Section 41-20 confirms that there is no entitlement to a fuel tax credit for fuel to the extent that an entity acquires, manufactures or imports the fuel for use in a light vehicle travelling on a public road. 105. Division 43 sets out how to calculate the amount of a fuel tax credit. Fuel tax credits for fuel acquired for use in heavy vehicles are reduced by the road user charge to the extent that the fuel is for travelling on a public road under subsection 43-10(3). 106. The use of the phrase 'to the extent' in sections 41-5, 41-20 and subsection 43-10(3) contemplates apportionment between fuel acquired for an eligible use and fuel acquired for an ineligible use or uses which may give rise to different rates of fuel tax credit entitlement. 107. To determine the entitlement and the amount of fuel tax credit, an entity that acquires fuel for use in vehicles will need to apportion the fuel between: | Principles for apportioning fuel used in a vehicle: 108. The Fuel Tax Act 2006 contemplates apportionment but does not prescribe any set method for apportioning fuel between different uses. Fuel Tax Determination FTD 2010/1 Fuel tax: apportionment may apply when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 explains that fuel tax credit entities can use any apportionment method that is fair and reasonable to their circumstances. 109. Paragraph 33 of FTD 2010/1 states: 110. Apportionment of fuel for the purpose of working out an entitlement and calculating the amount of the entitlement are distinct phases. An entity can generally perform separate calculations where there are one or more types of fuel for use in the same or multiple activities. A single calculation may be performed for example, where there is the same type of equipment that uses different types of liquid fuel and at the same fuel consumption rate for both types of fuel. 111. The amount of the entitlement calculated should be the same whether a single step process or a discrete step calculation is performed. The apportionment should not result in more fuel being taken into account than has been acquired, manufactured or imported or used and that the apportionment of fuel is reasonable (for example, fuel used in a heavy vehicle for travelling on public roads is reasonable compared to fuel used off public roads for loading, unloading, or idling purposes). 112. To apportion the fuel an entity has acquired to the different activities for which the fuel was used, a reliable measure can be used as part of an apportionment methodology for calculating the amount of fuel that is acquired for use in an eligible activity. 113. Examples of reliable known measures that can be supported by source documentation include: 114. Although these are commonly used measures, because of the diverse range of eligible activities, paragraph 113 of this Ruling is not an exhaustive list and there may be other measures that are appropriate to an entity's circumstances. There also needs to be assurances in place to ensure that any measure used does not distort results. 115. The FTC Automator is a telematics technology product that can be used as a measure in the apportionment process as it has functionalities for data to be transmitted and events to be categorised on use. It will be a reliable measure provided that: | Whether the FTC Automator provides a step in the apportionment of fuel: 116. There are 2 types of installation of the device that is used to collect data before it is transmitted to FTC Automator. The installation is either by the MTData authorised installer or by the client. Data is transmitted, formatted, and analysed. The client provides fuel records and vehicle or asset registers relating to the tax period applicable to the relevant data. 117. The reporting of fuel readings is from the vehicle itself via CAN bus, it is not derived or implied. These readings are consistent with that displayed to the driver in the dashboard. Also, fuel invoices for the tax period are supplied to KPMG to support fuel use and for the relevant apportionment of fuel. 118. The validation rules are applied, and the data received by MTData is analysed by KPMG. 119. For vehicles, the apportionment methodology of fuel use is based on whether the client has an entire fleet with telematics coverage, partial fleet coverage of vehicles with telematics or whether the method is appropriate to the business operation (cost centre-based or activity-based). That is: 120. For light vehicles without telematics data there is no fuel tax credit apportionment or calculation performed. There is a calculation rule to ensure that there is no fuel tax credit if there is no telematics data for these vehicles. Fuel tax credits is calculated for fuel used off public roads for light vehicles only where there is telematics data. 121. For a client with telematics data less than the entire fleet of vehicles (telematics coverage of less than 100%) the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. Where a sample size-based method is used, a sample size is used based on the Australian Bureau of Statistics Sample Size Calculator to determine if the telematics coverage is acceptable. Similar to the steps outlined in paragraph 118 of this Ruling, a weighted FTC Automator percentage is determined and the steps involved in the apportionment methodology are outlined in paragraphs 69 to 75 of this Ruling. 122. Where the methodology is based on cost centre or activity approach, the vehicles are categorised into the cost centre or activity group. Applying a similar approach as outlined in paragraphs 69 to 75 of this Ruling, a weighted FTC Automator percentage is applied by dividing total off public road fuel use in vehicles quantified by telematics by total fuel use in vehicles quantified by telematics to vehicles of a similar type and used in a similar manner within those groups. This percentage is then applied to the fuel acquired for each of the vehicles with no telematics coverage within the cost centre or activity group. 123. For heavy vehicles with auxiliary equipment (as per the asset register), the ATO-accepted percentage will be applied where appropriate. 124. FTC Automator using MTData as a GPS data source has a step in the process for apportioning fuel for different uses (on and off public roads and in auxiliary equipment) as part of the methodology that will attract different fuel tax credit rates. 125. As such, the FTC Automator functionality provides a step in the apportionment of fuel based on the categorisation of use. | Whether the apportionment methodology is fair and reasonable: 126. Paragraph 2.86 of the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 explains that an entity needs to apportion fuel use between eligible and ineligible uses in calculating their fuel tax credit entitlement: 127. We consider that where an entity is required to apportion the use of fuel between eligible and ineligible uses or multiple eligible uses, the use of the words 'to the extent that' allows an entity to choose a method of apportionment that is fair and reasonable in the circumstances. 128. The principles to be applied in identifying situations where apportionment is appropriate in an income tax context, and the method to be employed where apportionment is required, were considered in an income tax context by the High Court in Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 (Ronpibon). The High Court considered what parts of expenses incurred by a taxpayer were referable to gaining or producing assessable income. The High Court considered both the allocation of distinct expenditure to specific activities, and apportionment. 129. Following the principles set out by the High Court in Ronpibon, an entity can use any method to apportion fuel to take into account the requirements of the entitlement and calculation provisions, but that method needs to be fair and reasonable in the circumstances. 130. There may be more than one fair and reasonable basis of apportionment. It follows that the calculation of fuel tax credit entitlements cannot necessarily be carried out with absolute mathematical precision. Rather, an entity is entitled to a fuel tax credit where the other requirements for entitlement are met and, to the extent that an apportionment is required, the amount arrived at is calculated by application of an apportionment method that is fair and reasonable in the circumstances. It is not necessary for an apportionment method to track the intended use of every last drop of fuel. 131. The apportionment methodology applied for FTC Automator is based on whether the entire fleet has telematics coverage or only partial fleet coverage. Also, the apportionment of fuel use depends on whether the method is appropriate to the business operation and whether a sample size-based methodology, cost centre-based or activity-based is considered appropriate. 132. Paragraphs 66 to 75 of this Ruling set out the steps for each apportionment method. The functionality in FTC Automator provides a step in apportioning fuel based on the categorisation of use, that is, fuel used on and off public roads. 133. For vehicles with MTData as the GPS source, the vehicle's location and distance travelled is recorded based on the satellite data. This information is used to determine the total distance travelled and verify location data. 134. No fuel tax credit is calculated or claimed for light vehicles without telematics data. For light vehicles with telematics data, only the off public road usage and fuel is claimed. 135. The classification of the public roads for FTC Automator is based on the views outlined in FTR 2008/1. That is, a public road is a road that is available for use by members of the public. 136. Geofences are reviewed to ensure they are correct. KPMG and the client review the results relating to the road classification prior to a fuel tax credit claim being submitted to us. If any roads have been misclassified a rerun of the fuel tax credit calculation occurs. For geofences set up for the client these are reviewed, and an end date set to ensure the correctness of road classification. Only approved geofences are used for the fuel tax credit calculation. 137. The methodology for the vehicle and equipment that is tracked by the satellites along with CAN bus information to be used by FTC Automator is considered a fair and reasonable apportionment of fuel. It is only fair and reasonable where: 138. Provided all the points in paragraphs 114, 131 to 136 of this Ruling are considered and reviewed regularly, including checks to ensure data and outcomes remain accurate, the apportionment methodology used by the FTC Automator is fair and reasonable. | Whether the FTC Automator generates fair and reasonable results for working out the amount of fuel tax credits in Division 43 of the Fuel Tax Act 2006: 139. The amount of fuel tax credits is determined with reference to Divisions 41 and 43. The 'fair and reasonable' principle applies in determining the extent of entitlement and the amount of fuel tax credits within these Divisions. 140. FTC Automator applies an apportionment methodology that is fair and reasonable. It has relevant checks and processes to ensure: 141. As a result, the FTC Automator provides fair and reasonable results for working out the amount of fuel tax credit for the class of entities identified in paragraphs 7 to 8 of this Ruling. | Whether the amount of fuel tax credits worked out by the FTC Automator can be used in working out the net fuel amount for a tax period: 142. The net fuel amount has the meaning given by section 60-5. 143. In working out the net fuel amount under section 60-5, the following formula applies: 144. The apportionment methodology applied within the FTC Automator to the taxable fuel is fair and reasonable in working out the extent of taxable fuel used both on and off public roads. The results generated in respect of that taxable fuel (for vehicles or equipment) are also fair and reasonable, subject to relevant checks and balances, including governance and assurance processes. The results can be used in working out the amount of fuel tax credits for that taxable fuel within Division 43. 145. As the results generated from the FTC Automator can calculate the amount of fuel tax credits for that taxable fuel, it assists in determining fuel tax credits to be included in the calculation of the net fuel amount for a tax period under Division 60. | Whether the FTC Report and the FTC Workpaper can be used for record-keeping purposes (but not the only record): 146. Subsection 382-5(1) of Schedule 1 to the TAA provides that you must keep records that record and explain all transactions and other acts you engage in that are relevant to acquisitions (for example, an entitlement to a fuel tax credit). 147. The records must be retained for at least 5 years after the completion of the transactions or acts to which they relate. 148. Subsection 382-5(8) of Schedule 1 to the TAA provides that the records must be in English, or easily translated into English, and enable an entitlement under an indirect tax law, that is, a fuel tax law to be ascertained. 149. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored and accessible for at least 5 years. 150. The FTC Report is compiled by FTC Automator and provided to clients. It contains details of the telematics apportionment, data, anomalies and calculations in multiple sections (refer paragraph 91 of this Ruling). 151. The tabs within the FTC Report show details of telematics information, Anomaly Report, fuel tax credit calculation and summary, FTC summary for BAS and fuel apportionment. 152. Depending upon the relevant tab, it may contain vehicle-related information, location information, tax invoice details including litres, distance, apportionment percentage, fuel usage and allocation, anomalies and relevant action and the fuel tax credit calculation. 153. Although the information is contained within relevant Microsoft Excel spreadsheets by KPMG, it enables the client to review the relevant information in conjunction with services provided by KPMG to identify any issues and their correction and, ensure that the data confirms actual events. The report can be used by KPMG and the client to verify the data apportionment calculations and amount of fuel tax credits. The information contained in the reports can be verified with source documentation. The information can then be used for preparing the fuel tax credit claim. 154. An FTC Workpaper is also provided in addition to the FTC Report for ease of review. 155. The FTC Workpaper also contains multiple sections including the claim, FTC rates, historical claims, fuel and apportionment, fuel usage workpaper, and apportionment rates (refer paragraph 96 of this Ruling). 156. The information (data and calculations) along with the reports are in English. 157. The client receiving the FTC Report or FTC Workpaper are advised to retain in their system for 5 years. 158. The FTC Report and FTC Workpaper are documents that are records for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 159. However, the reports in paragraph 157 of this Ruling will not be the only records that are used in determining apportionment for fuel tax credit purposes or supporting fuel tax credit claims by a client. Other records may include, but are not limited to, source data input information reports, fuel acquisition records (such as tax invoices), confirmation of location and time (such as driver job sheets) and environmental criteria compliance documentation. | Summary: 160. FTC Automator processes the GPS data sourced from MTData and applies a set methodology in determining the extent of fuel acquired for use in the nominated vehicles and auxiliary equipment. It can then be used in working out the amount of fuel tax credits for those nominated vehicles and auxiliary equipment under Division 43. Note: working out the amount of fuel tax credits will require the correct amount of fuel tax that was payable on the fuel at the rate in force on the relevant day using the table in subsection 43-5(2A). 161. The nominated reports (FTC Report and FTC Workpaper) generated from the FTC Automator can be used as a record (but not the only record) for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 162. There are governance and assurance processes that have demonstrated the accuracy and the fair and reasonable results of the FTC Automator. However, checks must continue to be undertaken regularly to ensure that any software or systems issues are rectified and the outcomes reflect actual events, any outliers or errors are corrected and the results are accurate. | Part 4-4  anti-avoidance: 163. Provided that the scheme ruled on is entered into and carried out as disclosed in this Ruling, and that the data, inputs and results generated are not manipulated or tailored to obtain fuel tax benefits by taking advantage of the fuel tax law in circumstances other than those intended by the fuel tax law, Part 4-4, Division 75 will not apply. © 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).


Appendix: Whether apportionment is a requirement to work out the entitlement to a fuel tax credit: 103. An entity is entitled to a fuel tax credit for taxable fuel (referred to as fuel) that it acquires or manufactures in, or imports into, the indirect tax zone to the extent that the entity does do so for use in carrying on the entity's enterprise. However, to be entitled to a fuel tax credit in respect of the fuel, the entity must be registered or required to be registered for goods and services tax at the time the entity acquires, manufactures or imports the fuel (subsections 41-5(1) and (2)). 104. Section 41-20 confirms that there is no entitlement to a fuel tax credit for fuel to the extent that an entity acquires, manufactures or imports the fuel for use in a light vehicle travelling on a public road. 105. Division 43 sets out how to calculate the amount of a fuel tax credit. Fuel tax credits for fuel acquired for use in heavy vehicles are reduced by the road user charge to the extent that the fuel is for travelling on a public road under subsection 43-10(3). 106. The use of the phrase 'to the extent' in sections 41-5, 41-20 and subsection 43-10(3) contemplates apportionment between fuel acquired for an eligible use and fuel acquired for an ineligible use or uses which may give rise to different rates of fuel tax credit entitlement. 107. To determine the entitlement and the amount of fuel tax credit, an entity that acquires fuel for use in vehicles will need to apportion the fuel between: | Principles for apportioning fuel used in a vehicle: 108. The Fuel Tax Act 2006 contemplates apportionment but does not prescribe any set method for apportioning fuel between different uses. Fuel Tax Determination FTD 2010/1 Fuel tax: apportionment may apply when determining total fuel tax credits in calculating the net fuel amount under section 60-5 of the Fuel Tax Act 2006 explains that fuel tax credit entities can use any apportionment method that is fair and reasonable to their circumstances. 109. Paragraph 33 of FTD 2010/1 states: 110. Apportionment of fuel for the purpose of working out an entitlement and calculating the amount of the entitlement are distinct phases. An entity can generally perform separate calculations where there are one or more types of fuel for use in the same or multiple activities. A single calculation may be performed for example, where there is the same type of equipment that uses different types of liquid fuel and at the same fuel consumption rate for both types of fuel. 111. The amount of the entitlement calculated should be the same whether a single step process or a discrete step calculation is performed. The apportionment should not result in more fuel being taken into account than has been acquired, manufactured or imported or used and that the apportionment of fuel is reasonable (for example, fuel used in a heavy vehicle for travelling on public roads is reasonable compared to fuel used off public roads for loading, unloading, or idling purposes). 112. To apportion the fuel an entity has acquired to the different activities for which the fuel was used, a reliable measure can be used as part of an apportionment methodology for calculating the amount of fuel that is acquired for use in an eligible activity. 113. Examples of reliable known measures that can be supported by source documentation include: 114. Although these are commonly used measures, because of the diverse range of eligible activities, paragraph 113 of this Ruling is not an exhaustive list and there may be other measures that are appropriate to an entity's circumstances. There also needs to be assurances in place to ensure that any measure used does not distort results. 115. The FTC Automator is a telematics technology product that can be used as a measure in the apportionment process as it has functionalities for data to be transmitted and events to be categorised on use. It will be a reliable measure provided that: | Whether the FTC Automator provides a step in the apportionment of fuel: 116. There are 2 types of installation of the device that is used to collect data before it is transmitted to FTC Automator. The installation is either by the MTData authorised installer or by the client. Data is transmitted, formatted, and analysed. The client provides fuel records and vehicle or asset registers relating to the tax period applicable to the relevant data. 117. The reporting of fuel readings is from the vehicle itself via CAN bus, it is not derived or implied. These readings are consistent with that displayed to the driver in the dashboard. Also, fuel invoices for the tax period are supplied to KPMG to support fuel use and for the relevant apportionment of fuel. 118. The validation rules are applied, and the data received by MTData is analysed by KPMG. 119. For vehicles, the apportionment methodology of fuel use is based on whether the client has an entire fleet with telematics coverage, partial fleet coverage of vehicles with telematics or whether the method is appropriate to the business operation (cost centre-based or activity-based). That is: 120. For light vehicles without telematics data there is no fuel tax credit apportionment or calculation performed. There is a calculation rule to ensure that there is no fuel tax credit if there is no telematics data for these vehicles. Fuel tax credits is calculated for fuel used off public roads for light vehicles only where there is telematics data. 121. For a client with telematics data less than the entire fleet of vehicles (telematics coverage of less than 100%) the apportionment of fuel use depends on which method is appropriate for the client's specific business operations. Where a sample size-based method is used, a sample size is used based on the Australian Bureau of Statistics Sample Size Calculator to determine if the telematics coverage is acceptable. Similar to the steps outlined in paragraph 118 of this Ruling, a weighted FTC Automator percentage is determined and the steps involved in the apportionment methodology are outlined in paragraphs 69 to 75 of this Ruling. 122. Where the methodology is based on cost centre or activity approach, the vehicles are categorised into the cost centre or activity group. Applying a similar approach as outlined in paragraphs 69 to 75 of this Ruling, a weighted FTC Automator percentage is applied by dividing total off public road fuel use in vehicles quantified by telematics by total fuel use in vehicles quantified by telematics to vehicles of a similar type and used in a similar manner within those groups. This percentage is then applied to the fuel acquired for each of the vehicles with no telematics coverage within the cost centre or activity group. 123. For heavy vehicles with auxiliary equipment (as per the asset register), the ATO-accepted percentage will be applied where appropriate. 124. FTC Automator using MTData as a GPS data source has a step in the process for apportioning fuel for different uses (on and off public roads and in auxiliary equipment) as part of the methodology that will attract different fuel tax credit rates. 125. As such, the FTC Automator functionality provides a step in the apportionment of fuel based on the categorisation of use. | Whether the apportionment methodology is fair and reasonable: 126. Paragraph 2.86 of the Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 explains that an entity needs to apportion fuel use between eligible and ineligible uses in calculating their fuel tax credit entitlement: 127. We consider that where an entity is required to apportion the use of fuel between eligible and ineligible uses or multiple eligible uses, the use of the words 'to the extent that' allows an entity to choose a method of apportionment that is fair and reasonable in the circumstances. 128. The principles to be applied in identifying situations where apportionment is appropriate in an income tax context, and the method to be employed where apportionment is required, were considered in an income tax context by the High Court in Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 (Ronpibon). The High Court considered what parts of expenses incurred by a taxpayer were referable to gaining or producing assessable income. The High Court considered both the allocation of distinct expenditure to specific activities, and apportionment. 129. Following the principles set out by the High Court in Ronpibon, an entity can use any method to apportion fuel to take into account the requirements of the entitlement and calculation provisions, but that method needs to be fair and reasonable in the circumstances. 130. There may be more than one fair and reasonable basis of apportionment. It follows that the calculation of fuel tax credit entitlements cannot necessarily be carried out with absolute mathematical precision. Rather, an entity is entitled to a fuel tax credit where the other requirements for entitlement are met and, to the extent that an apportionment is required, the amount arrived at is calculated by application of an apportionment method that is fair and reasonable in the circumstances. It is not necessary for an apportionment method to track the intended use of every last drop of fuel. 131. The apportionment methodology applied for FTC Automator is based on whether the entire fleet has telematics coverage or only partial fleet coverage. Also, the apportionment of fuel use depends on whether the method is appropriate to the business operation and whether a sample size-based methodology, cost centre-based or activity-based is considered appropriate. 132. Paragraphs 66 to 75 of this Ruling set out the steps for each apportionment method. The functionality in FTC Automator provides a step in apportioning fuel based on the categorisation of use, that is, fuel used on and off public roads. 133. For vehicles with MTData as the GPS source, the vehicle's location and distance travelled is recorded based on the satellite data. This information is used to determine the total distance travelled and verify location data. 134. No fuel tax credit is calculated or claimed for light vehicles without telematics data. For light vehicles with telematics data, only the off public road usage and fuel is claimed. 135. The classification of the public roads for FTC Automator is based on the views outlined in FTR 2008/1. That is, a public road is a road that is available for use by members of the public. 136. Geofences are reviewed to ensure they are correct. KPMG and the client review the results relating to the road classification prior to a fuel tax credit claim being submitted to us. If any roads have been misclassified a rerun of the fuel tax credit calculation occurs. For geofences set up for the client these are reviewed, and an end date set to ensure the correctness of road classification. Only approved geofences are used for the fuel tax credit calculation. 137. The methodology for the vehicle and equipment that is tracked by the satellites along with CAN bus information to be used by FTC Automator is considered a fair and reasonable apportionment of fuel. It is only fair and reasonable where: 138. Provided all the points in paragraphs 114, 131 to 136 of this Ruling are considered and reviewed regularly, including checks to ensure data and outcomes remain accurate, the apportionment methodology used by the FTC Automator is fair and reasonable. | Whether the FTC Automator generates fair and reasonable results for working out the amount of fuel tax credits in Division 43 of the Fuel Tax Act 2006: 139. The amount of fuel tax credits is determined with reference to Divisions 41 and 43. The 'fair and reasonable' principle applies in determining the extent of entitlement and the amount of fuel tax credits within these Divisions. 140. FTC Automator applies an apportionment methodology that is fair and reasonable. It has relevant checks and processes to ensure: 141. As a result, the FTC Automator provides fair and reasonable results for working out the amount of fuel tax credit for the class of entities identified in paragraphs 7 to 8 of this Ruling. | Whether the amount of fuel tax credits worked out by the FTC Automator can be used in working out the net fuel amount for a tax period: 142. The net fuel amount has the meaning given by section 60-5. 143. In working out the net fuel amount under section 60-5, the following formula applies: 144. The apportionment methodology applied within the FTC Automator to the taxable fuel is fair and reasonable in working out the extent of taxable fuel used both on and off public roads. The results generated in respect of that taxable fuel (for vehicles or equipment) are also fair and reasonable, subject to relevant checks and balances, including governance and assurance processes. The results can be used in working out the amount of fuel tax credits for that taxable fuel within Division 43. 145. As the results generated from the FTC Automator can calculate the amount of fuel tax credits for that taxable fuel, it assists in determining fuel tax credits to be included in the calculation of the net fuel amount for a tax period under Division 60. | Whether the FTC Report and the FTC Workpaper can be used for record-keeping purposes (but not the only record): 146. Subsection 382-5(1) of Schedule 1 to the TAA provides that you must keep records that record and explain all transactions and other acts you engage in that are relevant to acquisitions (for example, an entitlement to a fuel tax credit). 147. The records must be retained for at least 5 years after the completion of the transactions or acts to which they relate. 148. Subsection 382-5(8) of Schedule 1 to the TAA provides that the records must be in English, or easily translated into English, and enable an entitlement under an indirect tax law, that is, a fuel tax law to be ascertained. 149. All data and records, including MTData telematics data, relating to the fuel tax credit calculations is stored and accessible for at least 5 years. 150. The FTC Report is compiled by FTC Automator and provided to clients. It contains details of the telematics apportionment, data, anomalies and calculations in multiple sections (refer paragraph 91 of this Ruling). 151. The tabs within the FTC Report show details of telematics information, Anomaly Report, fuel tax credit calculation and summary, FTC summary for BAS and fuel apportionment. 152. Depending upon the relevant tab, it may contain vehicle-related information, location information, tax invoice details including litres, distance, apportionment percentage, fuel usage and allocation, anomalies and relevant action and the fuel tax credit calculation. 153. Although the information is contained within relevant Microsoft Excel spreadsheets by KPMG, it enables the client to review the relevant information in conjunction with services provided by KPMG to identify any issues and their correction and, ensure that the data confirms actual events. The report can be used by KPMG and the client to verify the data apportionment calculations and amount of fuel tax credits. The information contained in the reports can be verified with source documentation. The information can then be used for preparing the fuel tax credit claim. 154. An FTC Workpaper is also provided in addition to the FTC Report for ease of review. 155. The FTC Workpaper also contains multiple sections including the claim, FTC rates, historical claims, fuel and apportionment, fuel usage workpaper, and apportionment rates (refer paragraph 96 of this Ruling). 156. The information (data and calculations) along with the reports are in English. 157. The client receiving the FTC Report or FTC Workpaper are advised to retain in their system for 5 years. 158. The FTC Report and FTC Workpaper are documents that are records for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 159. However, the reports in paragraph 157 of this Ruling will not be the only records that are used in determining apportionment for fuel tax credit purposes or supporting fuel tax credit claims by a client. Other records may include, but are not limited to, source data input information reports, fuel acquisition records (such as tax invoices), confirmation of location and time (such as driver job sheets) and environmental criteria compliance documentation. | Summary: 160. FTC Automator processes the GPS data sourced from MTData and applies a set methodology in determining the extent of fuel acquired for use in the nominated vehicles and auxiliary equipment. It can then be used in working out the amount of fuel tax credits for those nominated vehicles and auxiliary equipment under Division 43. Note: working out the amount of fuel tax credits will require the correct amount of fuel tax that was payable on the fuel at the rate in force on the relevant day using the table in subsection 43-5(2A). 161. The nominated reports (FTC Report and FTC Workpaper) generated from the FTC Automator can be used as a record (but not the only record) for the purposes of subsection 382-5(8) of Schedule 1 to the TAA. 162. There are governance and assurance processes that have demonstrated the accuracy and the fair and reasonable results of the FTC Automator. However, checks must continue to be undertaken regularly to ensure that any software or systems issues are rectified and the outcomes reflect actual events, any outliers or errors are corrected and the results are accurate. | Part 4-4  anti-avoidance: 163. Provided that the scheme ruled on is entered into and carried out as disclosed in this Ruling, and that the data, inputs and results generated are not manipulated or tailored to obtain fuel tax benefits by taking advantage of the fuel tax law in circumstances other than those intended by the fuel tax law, Part 4-4, Division 75 will not apply. © 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. | This Ruling has been given on the basis that the entity who applied for the Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Ruling. | This Ruling provides certainty for potential participants by confirming that the tax benefits set out in the Ruling part of this document are available, provided that the scheme is carried out in accordance with the information we have been given and have described in the Scheme part of this document. If the scheme is not carried out as described, participants lose the protection of this Ruling. | Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends a financial (or other) adviser be consulted for such information. | It is not necessary for an apportionment method to track the intended use of every last drop of fuel. A method may be fair and reasonable without doing so provided that the application of the method reasonably reflects the extent to which taxable fuel is acquired for an eligible activity. | If a taxpayer acquires, manufactures or imports fuel for both eligible and ineligible activities, they will need to apportion the use of that fuel between eligible and ineligible uses to determine the amount of the fuel that is eligible for a fuel tax credit.


Related rulings: FTR 2008/1 FTD 2010/1
Legislative references: TAA 1953 Sch 1 382-5(1) TAA 1953 Sch 1 382-5(8) FTA 2006 Div 41 FTA 2006 41-5 FTA 2006 41-5(1) FTA 2006 41-5(2) FTA 2006 41-10(3) FTA 2006 41-10(4) FTA 2006 Subdiv 41-B FTA 2006 41-20 FTA 2006 41-25 FTA 2006 Div 43 FTA 2006 43-5(2A) FTA 2006 43-10(3) FTA 2006 Div 60 FTA 2006 60-5 FTA 2006 Pt 4-4 FTA 2006 Div 75
Case references: Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 78 CLR 47 [1949] ALR 785 8 ATD 431 23 ALJ 139
Other references: PCG 2016/11 Revised Explanatory Memorandum to the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provision) Bill 2006 data.gov.au abs.gov.au