RIDE-SOURCING IS TAXI TRAVEL

The Federal Court last month dismissed and appeal from Uber, and confirmed the ATO view that ride-sourcing (ride-sharing) does constitute ‘tax travel’ for GST purposes. Consequently, the ATO has advised that unless Uber appeals this decision, it will continue to administer the law in accordance with its published guidance. We now detail what this treatment is from a driver’s and passenger’s perspective.

DRIVER

Ride-sourcing drivers have a range of tax obligations as follows:
  • As ride-sourcing constitutes taxi travel, they must register for GST from when they sign up as a driver. The normal $75,000 GST registration threshold does not apply.
  • They must keep records of their expenses and income.
  • They must have an ABN.
  • They must pay GST to the ATO on the full fare (including any commission they pay to the facilitator e.g. Uber) for each trip they provide.
  • They must lodge Business Activity Statements
  • They or the facilitator must provide passengers with a tax invoice when they request it and where the fare exceeds $82.50 (GST-inclusive).
  • They must include the fares as income on their tax returns.

On the plus side, drivers are able to claim the GST and income tax deductions on expenses that they incur in driving such as insurance, petrol, registration, the facilitator’s commission, and also depreciation of the motor vehicle. However, these claims must be apportioned to take account of any private use of the vehicle.

PASSENGER

From a GST perspective if the fare is work-related, GST registered taxpayers can claim this component of the fare back on their Business Activity Statement. If the amount of the fare is under $82.50 (GST-inclusive) you will not need a tax invoice to do so. If the fare is over this amount, you should request a tax invoice in order to claim the GST.

From an income tax perspective, passengers can claim a tax deduction if the fare is work-related and would be deductible if you were driving that route yourself.