Class Ruling CR 2019/65

What this ruling is about: 1. This Ruling sets out when Fleetcare Pty Ltd's vehicle telematics product (Fleetcare telematics product) 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 (FBT) 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 Fleetcare telematics product are set out in paragraphs 20 to 30 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential purchasers or users must form their own view about the product. Who this Ruling applies to 4. This Ruling applies to you if you are an employer who uses the Fleetcare telematics product, including the electronic FBT logbook, to keep 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 2024. 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 'log book year of tax' (as defined in subsection 136(1))) or section 10B (if the year is not a 'log book 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 Fleetcare telematics product 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 of the points in paragraph 10 of this Ruling apply to the first year. 12. The Fleetcare telematics product's electronic FBT logbook must be retained for at least five years. [4] Logbook records 13. The Fleetcare telematics product's electronic FBT logbook is a document which satisfies the requirements of the definition of 'log book records' in subsection 136(1), as over the time the electronic FBT logbook is being kept: [5] Odometer records 14. The Fleetcare telematics product's electronic FBT logbook 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 Fleetcare telematics product's 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 Fleetcare telematics product continuously: 17. If you, in a logbook year of tax, use the Fleetcare telematics product 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 Fleetcare telematics product continuously for the whole period in the FBT year 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 Fleetcare telematics product: 19. If you, in a non-logbook year of tax, use the Fleetcare telematics product 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. 21. Fleetcare Pty Ltd (Fleetcare) provides employers with a GPS tracking telematics product consisting of a device that is located in each car. The Fleetcare telematics product operates as follows: 22. An employee enters their details and the purpose of the trip at the end of each trip via in-car input or by the employee notifying their employer who will enter the information directly into the Fleetmanager database. 23. Once the location data has been transferred into the Fleetmanager database, it is merged with the travel information provided by the employee and can then be used by the employer to generate logbook and odometer records. 24. All drivers of an FBT logbook service vehicle will receive a daily summary logbook sent via email. This summary will contain a detailed overview of the vehicle journeys performed by the driver and allow the driver to make changes to the vehicle usage. Should the driver choose to assign a trip to 'business' usage, they will also be prompted to input a valid business purpose description for the trip. 25. Employers will have the ability to audit driver activity, and confirm drivers are actioning the logbooks as expected. Any trips undertaken but not actioned within a 90-day period will automatically be deemed to constitute personal usage. 26. The Fleetcare telematics product logbook solution is designed to remain installed in the vehicle for the entire FBT reporting period, and as such, the FBT logbook report contains vehicle logbook data for the entire FBT period, and not only for the minimum 12-week reporting window. 27. Upon completion of the FBT year, employers can then generate, in English, an electronic FBT logbook report for any selected period for each car that has the Fleetcare telematics product fitted and/or employee who uses the car that has the system fitted. 28. The Fleetcare telematics product's electronic FBT logbook provides the following information for each journey undertaken in the selected period: 29. All employers using the Fleetcare telematics product will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'log book year of tax'. 30. The logbook records and odometer records of the Fleetcare telematics product will be maintained by, or on behalf of, the provider (as defined for the purposes of sections 10A and 10B) for the logbook period and the holding period. If the provider is not the employer, the employer will hold the logbook records and odometer records prior to the declaration date. 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. 21. Fleetcare Pty Ltd (Fleetcare) provides employers with a GPS tracking telematics product consisting of a device that is located in each car. The Fleetcare telematics product operates as follows: 22. An employee enters their details and the purpose of the trip at the end of each trip via in-car input or by the employee notifying their employer who will enter the information directly into the Fleetmanager database. 23. Once the location data has been transferred into the Fleetmanager database, it is merged with the travel information provided by the employee and can then be used by the employer to generate logbook and odometer records. 24. All drivers of an FBT logbook service vehicle will receive a daily summary logbook sent via email. This summary will contain a detailed overview of the vehicle journeys performed by the driver and allow the driver to make changes to the vehicle usage. Should the driver choose to assign a trip to 'business' usage, they will also be prompted to input a valid business purpose description for the trip. 25. Employers will have the ability to audit driver activity, and confirm drivers are actioning the logbooks as expected. Any trips undertaken but not actioned within a 90-day period will automatically be deemed to constitute personal usage. 26. The Fleetcare telematics product logbook solution is designed to remain installed in the vehicle for the entire FBT reporting period, and as such, the FBT logbook report contains vehicle logbook data for the entire FBT period, and not only for the minimum 12-week reporting window. 27. Upon completion of the FBT year, employers can then generate, in English, an electronic FBT logbook report for any selected period for each car that has the Fleetcare telematics product fitted and/or employee who uses the car that has the system fitted. 28. The Fleetcare telematics product's electronic FBT logbook provides the following information for each journey undertaken in the selected period: 29. All employers using the Fleetcare telematics product will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'log book year of tax'. 30. The logbook records and odometer records of the Fleetcare telematics product will be maintained by, or on behalf of, the provider (as defined for the purposes of sections 10A and 10B) for the logbook period and the holding period. If the provider is not the employer, the employer will hold the logbook records and odometer records prior to the declaration date. 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 Fleetcare Pty Ltd's vehicle telematics product (Fleetcare telematics product) 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 (FBT) 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 Fleetcare telematics product are set out in paragraphs 20 to 30 of this Ruling. Note: By issuing this Ruling, the ATO is not endorsing this product. Potential purchasers or users must form their own view about the product. | Who this Ruling applies to: 4. This Ruling applies to you if you are an employer who uses the Fleetcare telematics product, including the electronic FBT logbook, to keep 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 2024. | 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 'log book year of tax' (as defined in subsection 136(1))) or section 10B (if the year is not a 'log book 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 Fleetcare telematics product 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 of the points in paragraph 10 of this Ruling apply to the first year. 12. The Fleetcare telematics product's electronic FBT logbook must be retained for at least five years. [4] | Logbook records: 13. The Fleetcare telematics product's electronic FBT logbook is a document which satisfies the requirements of the definition of 'log book records' in subsection 136(1), as over the time the electronic FBT logbook is being kept: [5] | Odometer records: 14. The Fleetcare telematics product's electronic FBT logbook 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 Fleetcare telematics product's 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 Fleetcare telematics product continuously: 17. If you, in a logbook year of tax, use the Fleetcare telematics product 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 Fleetcare telematics product continuously for the whole period in the FBT year 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 Fleetcare telematics product: 19. If you, in a non-logbook year of tax, use the Fleetcare telematics product 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. 21. Fleetcare Pty Ltd (Fleetcare) provides employers with a GPS tracking telematics product consisting of a device that is located in each car. The Fleetcare telematics product operates as follows: 22. An employee enters their details and the purpose of the trip at the end of each trip via in-car input or by the employee notifying their employer who will enter the information directly into the Fleetmanager database. 23. Once the location data has been transferred into the Fleetmanager database, it is merged with the travel information provided by the employee and can then be used by the employer to generate logbook and odometer records. 24. All drivers of an FBT logbook service vehicle will receive a daily summary logbook sent via email. This summary will contain a detailed overview of the vehicle journeys performed by the driver and allow the driver to make changes to the vehicle usage. Should the driver choose to assign a trip to 'business' usage, they will also be prompted to input a valid business purpose description for the trip. 25. Employers will have the ability to audit driver activity, and confirm drivers are actioning the logbooks as expected. Any trips undertaken but not actioned within a 90-day period will automatically be deemed to constitute personal usage. 26. The Fleetcare telematics product logbook solution is designed to remain installed in the vehicle for the entire FBT reporting period, and as such, the FBT logbook report contains vehicle logbook data for the entire FBT period, and not only for the minimum 12-week reporting window. 27. Upon completion of the FBT year, employers can then generate, in English, an electronic FBT logbook report for any selected period for each car that has the Fleetcare telematics product fitted and/or employee who uses the car that has the system fitted. 28. The Fleetcare telematics product's electronic FBT logbook provides the following information for each journey undertaken in the selected period: 29. All employers using the Fleetcare telematics product will make an election under paragraph 162G(1)(b) to treat a relevant current year of tax as a 'log book year of tax'. 30. The logbook records and odometer records of the Fleetcare telematics product will be maintained by, or on behalf of, the provider (as defined for the purposes of sections 10A and 10B) for the logbook period and the holding period. If the provider is not the employer, the employer will hold the logbook records and odometer records prior to the declaration date. 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 FBTAA 1986 10 FBTAA 1986 10A FBTAA 1986 10B FBTAA 1986 10(2) FBTAA 1986 123(2) FBTAA 1986 136(1) FBTAA 1986 162 FBTAA 1986 162F FBTAA 1986 162G(1)(a) FBTAA 1986 162G(1)(b) FBTAA 1986 162H(1) TAA 1953