Class Ruling CR 2019/66

What this ruling is about: 1. This Ruling sets out when the Entwined Signage Pty Ltd in-Vehicle Monitoring System (Entwined Signage IVMS) can be utilised to reduce the operating costs in both a logbook and non-logbook year of tax for the purposes of calculating the fringe benefits tax taxable value of a car fringe benefit using the cost basis method. 2. Broadly, sections 10A and 10B of the Fringe Benefits Tax Assessment Act 1986 [1] allow an employer to reduce the operating cost of a car for business journeys that are undertaken in the car during the period in which the car was held (either by the employer or another person). Such a reduction can only occur where certain conditions are met. 3. Full details of the Entwined Signage IVMS are set out in paragraphs 20 to 32 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product/service. Potential purchasers must form their own view about the product/service. Who this Ruling applies to 4. This Ruling applies to you if you are an employer who uses the Entwined Signage IVMS to keep car logbook and odometer records for the purposes of calculating the taxable value of a car fringe benefit using the cost basis method. When this Ruling applies 5. This Ruling applies from 1 April 2019 to 31 March 2023. Background to legislative requirements 6. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 7. Where the election is made, the taxable value of the car fringe benefit using the operating cost method is calculated according to the formula in subsection 10(2). In accordance with this formula, an employer intending to claim a reduction in the operating cost of a car, on account of business journeys undertaken during the holding period, must meet the requirements of either section 10A (if the year is a 'logbook year of tax' (as defined in subsection 136(1)) or section 10B (if the year is not a 'logbook year of tax'), as applicable. 8. Section 10A requires that in a logbook year: 9. Section 10B requires that in a non-logbook year: Logbook year of tax 10. A year in which the Entwined Signage IVMS is used will be a 'logbook year of tax' if: 11. The subsequent four years will be a 'non-logbook year of tax' if either dot points in paragraph 10 of this Ruling applies to the first year. 12. The Entwined Signage IVMS FBT logbook report must be retained for at least five years. [4] Logbook records 13. The Entwined Signage IVMS FBT logbook report is a document which satisfies the requirements of the definition of 'logbook records' in subsection 136(1), as over the time the FBT logbook reports are being kept [5] : Odometer records 14. The Entwined Signage IVMS FBT logbook report is a document which satisfies the requirements of the definition of 'odometer records' [6] as it provides details of the odometer reading for the car at the start of the journey and also the odometer reading for the car at the end of the journey that was undertaken during each reporting period. Business kilometres and business use percentage 15. The Entwined Signage IVMS calculation of the number of business kilometres and the total number of kilometres travelled by a car satisfies the requirements necessary for you to: Satisfaction of the requirements in section 10A in a logbook year of tax 16. You satisfy the requirements in section 10A and are entitled to claim a reduction of operating costs in a logbook year of tax on account of business journeys made in the car during the period you own or lease the car if you use the Entwined Signage IVMS continuously: 17. If you, in a logbook year of tax, use the Entwined Signage IVMS continuously for: you satisfy the requirements in section 10A and are entitled to claim a reduction of operating costs on account of business journeys made in the car during the period you own or lease the car provided you: Satisfaction of the requirements in section 10B in a non-logbook year of tax 18. If you use the Entwined Signage IVMS continuously for the whole period that you own or lease the car, you will meet all the necessary requirements of section 10B in a non-logbook year of tax and are entitled to claim a reduction of operating costs on account of business journeys made in the car during the period you own or lease the car as the FBT logbook report and or Entwined Signage IVMS: 19. If you, in a non-logbook year of tax use the Entwined Signage IVMS continuously for an applicable logbook period but: you satisfy the requirements in section 10B and will be entitled to claim a reduction of operating costs of the car on account of business journeys made in the car during the period you own or lease the car provided you: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. Entwined Signage IVMS 21. The Entwined Signage IVMS is a cloud-based logbook system which can be used to log the journeys of a vehicle during a pre-determined period. The Entwined Signage logbook solution is designed to remain implemented in the vehicle for either of two periods - a 12-week period and a 52-week period. 22. The Entwined Signage IVMS consists of: In-car device 23. The Entwined Signage IVMS is connected to the vehicle's OBD port, allowing the vehicle's odometer to be read. The IVMS is directly connected to the odometer and provides a one-to-one reading of the odometer. 24. In the event that the vehicle odometer is unable to be read (for example, an incompatible vehicle), or the IVMS is not connected to the OBD port, as a fall back method, the GPS odometer method as described in paragraph 27 of this ruling will be used. 25. The IVMS is powered by the vehicle and records the following information for each journey: Process 26. The IVMS assigns each journey to a driver. At the completion of the journey, the driver is prompted by the software, to classify the purpose of the journey as either business or personal. If prompts are not actioned, the driver's manager will be notified via email or SMS for follow-up. 27. If the vehicle odometer is unable to be read (for example, an incompatible vehicle, or the IVMS is not connected to the vehicle OBD port), then as a fall back the GPS odometer method will be used. After an initial odometer reading is entered, the GPS odometer is used to measure the distance travelled for each journey based upon GPS readings. Reporting 28. From the journey data collected, the Entwined Signage IVMS produces two reports. The FBT logbook report which provides the following details: 29. The 'FBT summary report' which provides the following details: 30. In cases where the selected period is not 52 weeks, the Entwined Signage IVMS FBT logbook report will also provide the odometer reading at the start and end of the holding period (for example 1 April and 31 March for a non-logbook year). 31. The Entwined Signage IVMS reports are in English. 32. All employers using the Entwined Signage IVMS will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'logbook year of tax'. Commissioner of Taxation 9 October 2019 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft

Class of entities or scheme: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Entwined Signage IVMS: 21. The Entwined Signage IVMS is a cloud-based logbook system which can be used to log the journeys of a vehicle during a pre-determined period. The Entwined Signage logbook solution is designed to remain implemented in the vehicle for either of two periods - a 12-week period and a 52-week period. 22. The Entwined Signage IVMS consists of: | In-car device: 23. The Entwined Signage IVMS is connected to the vehicle's OBD port, allowing the vehicle's odometer to be read. The IVMS is directly connected to the odometer and provides a one-to-one reading of the odometer. 24. In the event that the vehicle odometer is unable to be read (for example, an incompatible vehicle), or the IVMS is not connected to the OBD port, as a fall back method, the GPS odometer method as described in paragraph 27 of this ruling will be used. 25. The IVMS is powered by the vehicle and records the following information for each journey: | Process: 26. The IVMS assigns each journey to a driver. At the completion of the journey, the driver is prompted by the software, to classify the purpose of the journey as either business or personal. If prompts are not actioned, the driver's manager will be notified via email or SMS for follow-up. 27. If the vehicle odometer is unable to be read (for example, an incompatible vehicle, or the IVMS is not connected to the vehicle OBD port), then as a fall back the GPS odometer method will be used. After an initial odometer reading is entered, the GPS odometer is used to measure the distance travelled for each journey based upon GPS readings. | Reporting: 28. From the journey data collected, the Entwined Signage IVMS produces two reports. The FBT logbook report which provides the following details: 29. The 'FBT summary report' which provides the following details: 30. In cases where the selected period is not 52 weeks, the Entwined Signage IVMS FBT logbook report will also provide the odometer reading at the start and end of the holding period (for example 1 April and 31 March for a non-logbook year). 31. The Entwined Signage IVMS reports are in English. 32. All employers using the Entwined Signage IVMS will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'logbook year of tax'. Commissioner of Taxation 9 October 2019 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Ruling: 1. This Ruling sets out when the Entwined Signage Pty Ltd in-Vehicle Monitoring System (Entwined Signage IVMS) can be utilised to reduce the operating costs in both a logbook and non-logbook year of tax for the purposes of calculating the fringe benefits tax taxable value of a car fringe benefit using the cost basis method. 2. Broadly, sections 10A and 10B of the Fringe Benefits Tax Assessment Act 1986 [1] allow an employer to reduce the operating cost of a car for business journeys that are undertaken in the car during the period in which the car was held (either by the employer or another person). Such a reduction can only occur where certain conditions are met. 3. Full details of the Entwined Signage IVMS are set out in paragraphs 20 to 32 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product/service. Potential purchasers must form their own view about the product/service. | Who this Ruling applies to: 4. This Ruling applies to you if you are an employer who uses the Entwined Signage IVMS to keep car logbook and odometer records for the purposes of calculating the taxable value of a car fringe benefit using the cost basis method. | When this Ruling applies: 5. This Ruling applies from 1 April 2019 to 31 March 2023. | Background to legislative requirements: 6. Section 10 allows employers to elect to calculate the taxable value of a car fringe benefit using the cost basis method (operating cost method). 7. Where the election is made, the taxable value of the car fringe benefit using the operating cost method is calculated according to the formula in subsection 10(2). In accordance with this formula, an employer intending to claim a reduction in the operating cost of a car, on account of business journeys undertaken during the holding period, must meet the requirements of either section 10A (if the year is a 'logbook year of tax' (as defined in subsection 136(1)) or section 10B (if the year is not a 'logbook year of tax'), as applicable. 8. Section 10A requires that in a logbook year: 9. Section 10B requires that in a non-logbook year: | Logbook year of tax: 10. A year in which the Entwined Signage IVMS is used will be a 'logbook year of tax' if: 11. The subsequent four years will be a 'non-logbook year of tax' if either dot points in paragraph 10 of this Ruling applies to the first year. 12. The Entwined Signage IVMS FBT logbook report must be retained for at least five years. [4] | Logbook records: 13. The Entwined Signage IVMS FBT logbook report is a document which satisfies the requirements of the definition of 'logbook records' in subsection 136(1), as over the time the FBT logbook reports are being kept [5] : | Odometer records: 14. The Entwined Signage IVMS FBT logbook report is a document which satisfies the requirements of the definition of 'odometer records' [6] as it provides details of the odometer reading for the car at the start of the journey and also the odometer reading for the car at the end of the journey that was undertaken during each reporting period. | Business kilometres and business use percentage: 15. The Entwined Signage IVMS calculation of the number of business kilometres and the total number of kilometres travelled by a car satisfies the requirements necessary for you to: | Satisfaction of the requirements in section 10A in a logbook year of tax: 16. You satisfy the requirements in section 10A and are entitled to claim a reduction of operating costs in a logbook year of tax on account of business journeys made in the car during the period you own or lease the car if you use the Entwined Signage IVMS continuously: 17. If you, in a logbook year of tax, use the Entwined Signage IVMS continuously for: you satisfy the requirements in section 10A and are entitled to claim a reduction of operating costs on account of business journeys made in the car during the period you own or lease the car provided you: | Satisfaction of the requirements in section 10B in a non-logbook year of tax: 18. If you use the Entwined Signage IVMS continuously for the whole period that you own or lease the car, you will meet all the necessary requirements of section 10B in a non-logbook year of tax and are entitled to claim a reduction of operating costs on account of business journeys made in the car during the period you own or lease the car as the FBT logbook report and or Entwined Signage IVMS: 19. If you, in a non-logbook year of tax use the Entwined Signage IVMS continuously for an applicable logbook period but: you satisfy the requirements in section 10B and will be entitled to claim a reduction of operating costs of the car on account of business journeys made in the car during the period you own or lease the car provided you: 20. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Entwined Signage IVMS: 21. The Entwined Signage IVMS is a cloud-based logbook system which can be used to log the journeys of a vehicle during a pre-determined period. The Entwined Signage logbook solution is designed to remain implemented in the vehicle for either of two periods - a 12-week period and a 52-week period. 22. The Entwined Signage IVMS consists of: | In-car device: 23. The Entwined Signage IVMS is connected to the vehicle's OBD port, allowing the vehicle's odometer to be read. The IVMS is directly connected to the odometer and provides a one-to-one reading of the odometer. 24. In the event that the vehicle odometer is unable to be read (for example, an incompatible vehicle), or the IVMS is not connected to the OBD port, as a fall back method, the GPS odometer method as described in paragraph 27 of this ruling will be used. 25. The IVMS is powered by the vehicle and records the following information for each journey: | Process: 26. The IVMS assigns each journey to a driver. At the completion of the journey, the driver is prompted by the software, to classify the purpose of the journey as either business or personal. If prompts are not actioned, the driver's manager will be notified via email or SMS for follow-up. 27. If the vehicle odometer is unable to be read (for example, an incompatible vehicle, or the IVMS is not connected to the vehicle OBD port), then as a fall back the GPS odometer method will be used. After an initial odometer reading is entered, the GPS odometer is used to measure the distance travelled for each journey based upon GPS readings. | Reporting: 28. From the journey data collected, the Entwined Signage IVMS produces two reports. The FBT logbook report which provides the following details: 29. The 'FBT summary report' which provides the following details: 30. In cases where the selected period is not 52 weeks, the Entwined Signage IVMS FBT logbook report will also provide the odometer reading at the start and end of the holding period (for example 1 April and 31 March for a non-logbook year). 31. The Entwined Signage IVMS reports are in English. 32. All employers using the Entwined Signage IVMS will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'logbook year of tax'. Commissioner of Taxation 9 October 2019 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Not previously issued as a draft




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


Legislative references: FBTAA 1986 10 FBTAA 1986 10(2) FBTAA 1986 10A FBTAA 1986 10B FBTAA 1986 123(2) FBTAA 1986 136(1) FBTAA 1986 162F FBTAA 1986 162 FBTAA 1986 162G FBTAA 1986 162G(1)(a) FBTAA 1986 162G(1)(b) FBTAA 1986 162H(1) TAA 1953