Uber takes on the ATO over its ride-sourcing directive

Uber takes on the ATO over its ride-sourcing directive

Gavin: It seems that ride-sourcing (or ride sharing) is set to stay in the news after Uber has launched legal action against the ATO in relation to its latest directive that those providing “ride-sourcing” services must have registered for an ABN by 1 August and charge and remit GST. The ATO says that it does not plan to chase up GST that was not collected or remitted prior to 1 August as long as there is no evidence of fraud, etc. Uber’s legal action centres around its “Uber X” drivers who are basically just average punters providing their own private cars, rather than the Uber Black drivers, who are standard registered “limo” drivers. It’s hard to see how Uber can win the ATO’s stance that the word taxi takes on its broad ordinary meaning of a car (vehicle) made available for public hire that is used to transport passengers for fares.

Example

Gavin: For those providing ride-sourcing services, the ATO’s latest communication on this matter, which issued on 5 August, contained the following example.

If you provide ride-sourcing services to the public you ar elikely to be carying on an enterprise. If you are registered, or reuquired to be registered, GST must be calculation on the full fare, not the net amount you receive after deducting any fees or commissions. For example, if a passenger pays $55 and the facilitator pays you $44 (after deducting an $11 commission), the GST payable is $5 (not $4). GST credits on your business purchases can be claimed, but must be apportioned between business and private use.

For example, if you use your car 10% for ride-sourcing and 90% for private purposes, and you:

• buy a new car to use for your ride-sourcing activity for $33,000 (including $3,000 GST), you may claim a GST credit of $300;
• pay $110 for fuel (including $10 GST), you may claim a credit of $1; and
• pay $220 for a service (including $20 GST), you may claim a GST credit of $2.

Ref: ATO website – Providing taxi travel services through ride-sourcing and your tax obligations

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