In a recent case, the Federal Court has agreed with the ATO that ‘ride-sourcing’ (such as that provided using Uber) is ‘taxi travel’ within the meaning of the GST law.
The ATO has advised tax practitioners that, since a lot of people are taking up ride-sourcing to earn more income, clients with a ride-sourcing enterprise should:
- Keep records;
- Have an Australian Business Number (ABN);
- Register for GST, regardless of how much they earn;
- Pay GST on the full fare received from passengers for each trip they provide;
- Lodge activity statement; and
- Include income from ride-sourcing in their income tax returns.
Drivers are also entitled to claim income tax deductions and GST credits (for GST paid) on expenses apportioned to the ride-sourcing services they have supplied.
The ATO can match people who provide ride-sourcing through data-matching, and will continue to write to them to explain their tax obligations.
The ATO stated that, if the taxpayer appeals this recent decision, they will continue to administer the law per their published advice (at least until there is a different decision).
Ref: Uber B.V. v FCT [2017] FCA 110
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