KPMG Australia and Geotab, the global leader in telematics technology, have announced a new alliance that enables KPMG’s clients to access Geotab technology, thereby expanding KPMG’s comprehensive fleet solution offering.
A key example is KPMG’s FTC Automator, which analyses vast amounts of data at speed and scale, and harnesses proprietary geo‐spatial analytics to process this data, before feeding it into the tax engine to produce Fuel Tax Credit (FTC) entitlement calculations.
The alliance coincides with a favourable ATO Product Ruling that ensures certainty over the tax implications of using the FTC Automator. Product rulings are important as they provide taxpayers with protection against penalty should the ATO subsequently dispute a claim made using the technology. PR 2024/1 | Legal database (ato.gov.au)
The technology helps organisations calculate their entitlements for credits on fuel excise, which apply to fuel used in plant, equipment, heavy vehicles and light vehicles (when not used on non‐public roads).
KPMG Australia’s National Leader for Workforce & Innovation, and Tax & Legal's Chief Technology Officer, David P Sofrà, said: “This is a direct response to market demand for a product that has undergone ATO review and testing ahead of its release of a formal, publicly available ruling.
“The ATO Product Ruling sets out the Fuel Tax Credit consequences for KPMG Australia clients using Geotab to calculate their FTC entitlement using KPMG’s proprietary FTC Automator solution.
“Our ability to provide businesses with access to Geotab’s market‐leading technology means not only are we able to support our clients with a holistic, end‐to‐end fleet technology solution that fulfils their needs, we also have a high degree of confidence in the quality, accuracy and frequency of the data we are able to ingest into the FTC Automator.”
The FTC Automator is also able to surface important insights on safety, carbon emissions, fleet optimisation, as well as how viable it is for some, or all, of an organisation’s fleet to be electrified.
Sofrà added: “Our clients are increasingly focused on other aspects of fleet management, such as Environmental, Social & Governance (ESG) concerns, including safety and electrification. Having access to Geotab’s analytics and insights from over 4 million connected vehicles that use Geotab technology globally is a real boon for our clients and will support them in making informed decisions that are aligned with their strategic goals.”
David Brown, Geotab’s AVP Sales – APAC, concurs: “KPMG Australia’s FTC Automator, now backed by an ATO Product Ruling, is a very welcome and timely addition to the Geotab ecosystem and we look forward to partnering with KPMG’s tax technology experts to develop additional, new solutions in the ever‐evolving fleet space. Beyond tax, the telematics data KPMG is able to harness for its clients using Geotab will enable it to provide sector insights and industry‐peer comparisons on a number of key metrics such as CO2 emissions, fleet utilisation and various others relating to safety.”
Background/notes to editors:
FTC Automator is a technology-based FTC apportionment, calculation, and reporting platform that is used by KPMG to ascertain fuel use for the purposes of calculating FTC entitlement for its clients. PR 2024/1 relates specifically to KPMG clients that use Geotab in their light and heavy vehicles.
FTC and the use of telematics in calculating entitlement
Fuel used in heavy vehicles (vehicles with a Gross Vehicle Mass of greater than 4.5 tonnes) for travelling on a public road are entitled to a partial FTC, with the current rate being 20.8 cents per litre for liquid fuels such as diesel or petrol.
Liquid fuel used for all other business purposes (e.g. to power machinery, for travelling off public roads in either heavy or light vehicles) are entitled to a full FTC, with the current rate being 49.6 cents per litre.
Where a vehicle travels on both public and non-public roads or uses fuel to power machinery, it is necessary to apportion the fuel used between these activities to claim FTC and the apportionment methodology used must be “fair and reasonable”. Because the difference between the two rates is material (currently 28.8 cents) and because ‘fair and reasonable’ is not a specifically defined term, taxpayers have understandably been hesitant to claim FTC at the higher rate for vehicles known to have mixed use (i.e. both on road and offroad/auxiliary fuel use) due to concerns that they might not be able to substantiate claims their claims in an ATO review or audit.
The ATO has previously released guidance (Taxpayer Alert TA 2021/3) that outlines its concerns around the use of Global Positioning System (GPS) technology products for the substantiation of FTC claims.
The ATO’s concerns largely relate to whether assumptions made, and samples used, in making GPS-based FTC claims result in a fair and reasonable outcome that can be substantiated.
Product rulings and FTC
Not to be confused with class rulings, a product ruling is a specific type of public ruling under the Taxation Administration Act 1953 that gives certainty to participants (or potential participants) on the tax consequences of an arrangement, provided it is carried out as described in the ruling.
For further information
Ian Welch – KPMG
iwelch@kpmg.com.au
0400 818 891
Nicole Lambert – Edlerman (for Geotab)
nicole.lambert@edelman.com
0418 640 081