Uber GST & Tax Questions and Answers
1. How can an Uber driver provide a tax invoice?
Is Uber a taxi?
Must they now be registered for GST or do they wait for ATO & Uber discussions to be completed?
Will the ATO issue a ruling or why not treat it as a test case?
Tax invoices Refer to www.ato.gov.au/ridesourcing particularly ‘Will the driver give me a tax invoice?
Facilitators may issue invoices on behalf of drivers. If your facilitator does not, you may use a tax invoice book. If the fare is more than $82.50 (including GST) and the passenger requests a tax invoice, you are required to give a tax invoice. If the fare is $82.50 or less, or if the passenger does not request a tax invoice, you are not required to issue one. In that case, you can choose to issue a tax invoice. Note that a tax invoice must include certain details that can be found at www.ato.gov.au/Business/GST/Issuing-tax-invoices/ Is Uber a taxi?
For GST purposes, 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. If you provide ride-sourcing services, you are providing ‘taxi travel’ services. This is because you make a car available for public hire and use it to transport passengers for a fare. Under the GST law, if you carry on an enterprise and provide taxi travel services in that enterprise, you are required to be registered for GST regardless of your turnover. State and territory laws regulating transportation of passengers contain specific definitions of the term ‘taxi’. As such, it is possible a vehicle may be a taxi for GST purposes, but not for state and territory regulatory purposes. We express no view about whether ride-sourcing vehicles are taxis within the state and territory specific definitions.
Time of registration We expect ride-sourcing drivers to have registered for GST with effect from 1 August 2015, and not to delay registration pending the outcome of the court case. Drivers that have not yet registered for GST may do so, but their registration will be backdated to 1 August 2015. This means they will need to pay GST on all fares received from 1 August 2015. However, they may also claim GST credits for the business portion of any fuel or other ride-sourcing expenses they acquired from 1 August 2015. Ruling / test case The ATO has issued guidance to assist drivers to comply with their tax obligations (see www.ato.gov.au/ridesourcing). The ATO will review this guidance following the completion of the court proceedings. In the meantime, the ATO is obliged to administer the law in accordance with its view.
2. I am having difficulty determining some GST issues – The ride-sourcing facilitator has an office located here in Perth, so should they not: a) have an ABN (which I’ve not been able to determine so far!), b) be GST-registered here in Australia & c) be providing tax Invoices to drivers for the commission they withhold?
If the facilitator is not carrying on a business in Australia, and the services they provide to you are not performed in Australia, they will not be entitled to an Australian Business Number (ABN) and will not be required to be registered for GST. If the facilitator’s service is not performed in Australia there is no GST on the commission and they will not issue a tax invoice. A non-resident facilitator may have a related entity in Australia that provides services to them, but not to you for a fee. However, this does not mean that the non-resident facilitator is entitled to have an ABN or needs to register for GST.
3. I only drove Uber in July and August and have been overseas since then, do I still need to register for GST?
For the month of July 2015 — no, you do not need to register for GST. Drivers were required to be registered for GST on 1 August 2015, if
they were carrying on an enterprise. If you were carrying on an enterprise of ride-sourcing services in August, you will need to register for GST with effect from 1 August 2015. Refer to What you need to do for more information. You will also need to report the income you received in July and August in your 2015-16 income tax return. If you do not intend to provide any further ride-sourcing services, you may cancel your GST registration from the end of August. If you do this, we will only send you one Business Activity Statement (in which you will need to report your activity for August).
4. How do you view Uber drivers earning only $10,000 and under with GST?
Do they register for GST?
All ride-sourcing drivers that are carrying on an enterprise are required to be registered for GST. As noted in www.ato.gov.au/ridesourcing we consider all ride-sourcing drivers are likely to be carrying on an enterprise – and this includes those that earn $10,000 or less. If you consider that you may not be carrying on an enterprise (because, for example, you operate very infrequently or your activities are otherwise non-commercial) you may write to us for a private ruling.
5. Does a service provider need an ABN and to register for GST?
We consider that by service provider you mean facilitator rather than driver. This depends on various matters such as whether the service provider is carrying on an enterprise in Australia. Non-resident service providers (such as a ride-sourcing facilitator) that do not carry on an enterprise in Australia and that do not perform services in Australia will not be entitled to an Australian Business Number (ABN) and will not be required to be registered for GST. Australian service providers (such as a ride-sourcing driver) that are carrying on an enterprise in Australia may have an ABN. They also
will be required to be registered for GST if their annual turnover is $75,000 or more or if a special rule (such as the ‘taxi travel’ rule) applies to them.
6. Are Uber drivers treated like taxi drivers, as GST registered, income tax small business entity?
Yes. Refer to www.ato.gov.au/ridesourcing Note that although drivers will generally be small business entities, a part-time driver may carry on more than one business. Drivers will need to take into account all relevant income in working out whether they are a small business entity.
7. I am overseas at the moment how can I register for GST?
Even though you are overseas, you will still be able to register for GST. Refer to What you need to do. You will need to apply for an ABN at abr.gov.au/Apply-for-an-ABN If you have been overseas since 1 August 2015 and you plan to be there for some time, you do not need to register for GST until you return to Australia as you will not be providing any ride-sourcing services in Australia. If you provide ride-sourcing services overseas, they will not be subject to GST in Australia.
8. I did not drive Uber since 1 August, still with an active ABN and Uber account; will I have any issue if I did not register for GST?
No, there is no issue at this point in time. However, if you resume driving you must be registered for GST. We have explained that we will not take compliance action in respect of your GST obligations if you were not a ride-sourcing driver on and after 1 August 2015. However, your income tax obligations are not subject to the same concession as for GST. Refer to What you need to do for more information.
9. What are the GST tax implications and GST registration requirements?
Refer to www.ato.gov.au/ridesourcing particularly under the headings ‘GST consequences in providing ride-sourcing services’ and ‘What you need to do’.
10. Clarification needed on contradictory GST laws for ride-sourcing and what is the rationale behind why taxi drivers have to be GST registered?
Taxi drivers are required to be registered irrespective of their turnover. Refer to www.ato.gov.au/business/taxi-industry-issues
register (which also contains an explanation of the policy rationale). The same GST law that applies to taxi drivers applies to ride-sourcing drivers. The GST law requires anyone providing ‘taxi travel’ in carrying on an enterprise to be registered for GST. Others who carry on an enterprise (other than providing taxi travel) are required to be registered if their turnover is $75,000 or more. There is no ‘contradiction’ in the GST law as it applies to ride-sourcing.
11. If I become GST registered for ride-sharing and I also do ridesharing work while I am overseas, I understand that the overseas income will be income for income tax purposes, but for GST purposes would you like me to show that overseas ride-sharing income on my BAS as GST-free income or leave it off the BAS altogether?
Fares charged to passengers for ride-sourcing provided overseas are not subject to GST in Australia. If you earn income overseas but you are an Australian resident taxpayer you need to include your overseas income in your Australian tax return. If you have paid any tax on your overseas income you may get a credit for the foreign tax paid.
12. What about GST for 2014-15, should I pay GST for this year?
In effect, our GST advice applies to activities on and after 1 August 2015. If you were not registered for GST prior to 1 August 2015, you do not need to pay GST and you cannot claim GST credits for your pre-1 August 2015 activity. However, if you were registered for GST prior to 1 August 2015, you should have paid GST on your fares and you may be entitled to claim GST credits (from the time you registered).
13. When a taxi driver becomes bankrupt and still continues to be a taxi driver, do they still have to lodge tax and BAS?
You must still remit GST if you are carrying on an enterprise of providing ride-sourcing services. However, there are GST special rules that apply to bankruptcy that, broadly, mean that the trustee in bankruptcy may be liable to pay GST on activities that fall within the scope of their responsibility for managing your affairs. Refer to Registration requirements for more information. If you and the trustee in bankruptcy are not clear about who should
be lodging BAS’s and paying GST, you may write to us for a private ruling or further advice.
14. Do we have to pay BAS every three months at first?
Do we do one or two years before starting quarterly BAS?
The frequency with which you must lodge your BAS’s (monthly or quarterly) depends on your preference. There is no one or two year initial period. Refer to ‘Choosing a GST reporting option’ at www.ato.gov.au/business/choosing-a-gst-reporting-option
15. GST reporting (quarterly or annually)?
You cannot lodge and pay annually, as this option is only available to voluntary registrants. You must lodge a BAS either monthly or quarterly. You may be able to pay GST by quarterly instalments if eligible. Refer to Choosing a GST reporting option for more information.
16. Example fare: $10 user fare, I receive $8 from Uber, neglect any costs. How much should I write on my BAS?
You must write $10 on your BAS (not the $8 net amount you receive from the facilitator. GST
17. What are the GST implications of ride-sourcing?
Refer to www.ato.gov.au/ridesourcing particularly under the headings ‘GST consequences in providing ride-sourcing services’ and ‘What you need to do’.
18. Is Uber a taxi?
Are Uber drivers expected to register, collect and charge GST without reaching the GST threshold?
Is Uber a taxi?
– see response to Question 1 above. Ride-sourcing drivers that are carrying on an enterprise must register and account for GST, even if their turnover is less than $75,000. Refer to GST consequences in providing ride-sourcing services for more information
19. Do taxi driver rules about GST apply to Uber drivers?
Yes. Refer to www.ato.gov.au/ridesourcing for more information.
20. The question of whether Uber is a taxi will answer a lot of questions. ABN is not a problem, but if they are not a taxi then are they permitted to use the GST threshold?
Refer to responses for Question 1 (Is Uber a taxi?)
and Question18 above.
21. Is it a legal business?
If not how could it be legal?
Is a business with turnover of less than $75,000 entitled to pay GST?
The ATO expresses no view on the legality of ride-sourcing arrangements. A driver carrying on a ride-sourcing business is required to register for GST irrespective of the turnover. Refer to www.ato.gov.au/ridesourcing for more information.
22. Are commissions paid to an overseas facilitator subject to GST?
No. See Question 2 and refer to www.ato.gov.au/ridesourcing
23. If I have unrelated income from other business activity which comes nowhere near the GST threshold do I have to collect GST on that too?
Yes, if you are carrying on that other business as a sole trader (rather than as a company or under some other structure).
24. Do we assume that GST is charged by the facilitator on the commission?
No. See Question 2 and refer to www.ato.gov.au/ridesourcing
25. Why are we obliged to pay GST as sole traders if we don’t earn more than the threshold?
If you carry on an enterprise of providing ride-sourcing services, you are required to be registered for GST regardless of your turnover. Refer to www.ato.gov.au/ridesourcing for more information.
26. Can you elaborate on why bonuses are not subject to GST?
Bonuses paid to you by non-resident facilitators for referring customers to them will not be subject to GST. GST is a tax on consumption in Australia only. The transport service you provide to passengers is consumed in Australia, and is subject to GST. If you provide additional services to a facilitator based overseas (such as the referral service referred to above) these services will be GST-free.
27. Payment of GST on the full fare is incorrect – the gross earnings of the driver are 80% of the fare. The gross earning of Uber is 20% of the fare. Otherwise you are collecting the GST twice on the same fare. If you are not collecting GST on
As a driver, you provide a transport service to your passenger in return for the amount paid by the passenger (i.e. the full fare). Under your agreement with your facilitator, you pay them a 20%
the Uber 20%, why not?
commission for the services they provide to you. If, in processing payments, your facilitator only pays you the net amount, this does not change the fact that two services were provided (the transport service you provide for the full fare, and the facilitation service they provide for 20% of the fare). If the facilitator is based overseas the service it provides to drivers is not subject to GST. See Question 2. Refer to ‘How does GST apply to fares?
at www.ato.gov.au/ridesourcing
28. My Client is a Uber driver. He is registered for GST from the 1/8/2015.He received payment from Uber and Uber issued invoice but not a tax invoice that shows the GST component?
Is Uber aware of the requirement of the tax invoice?
My client received commission for introducing another driver.He claimed that he should not refund the GST to the ATO on this particular type of commission. Is there such an arrangement between UBER and ATO Thanks The overseas facilitator is remitting to the driver the fares, less commission, the driver has collected. If the invoice relates to the commission component and the facilitator is based overseas the service it provides to drivers is not subject to GST When the driver receives a payment from a facilitator for finding a new driver, and the facilitator is based overseas, the payment will be GST-free. See Question 26 for an explanation of why. Whether any facilitator will issue a tax invoice on a driver’s behalf is a matter for them to decide and you will need to ask them. GST on fares
29. If I have to calculate GST on a full fare can I claim credit on the facilitator’s share?
What about if the facilitator doesn’t send an invoice. How can I justify my credit?
If the facilitator is based oversea,s the service it provides and the commission charged to you is GST free. You may not claim a GST credit on the facilitator’s share. Refer to What you need to do for more information.
30. Why does the driver pay GST instead of Uber as the GST is not included in the passenger fare?
Will you ask Uber to change the fare?
GST is charged on the full fare to the customer and as you provide the service, you must pay the GST. Refer to What you need to do for more information.
GST credit
31. Can the 20% commission that the facilitator charges be considered as a GST credit?
No. See Questions 2 and 29.
32. From the point of view of the customer, what document do they need to claim GST credits?
Where the fare is $82.50 or less (including GST), a passenger will not need a tax invoice, but they will need to keep records to substantiate their GST credit claims (such as receipts). However, for fares of more than $82.50 the taxpayer will need a tax invoice. Refer to ‘As a passenger, what can I do if I don’t receive a tax invoice?
’ at www.ato.gov.au/ridesourcing
ABN
33. Do drivers have to have an ABN and be registered for GST?
Is it law now?
Yes. Refer to www.ato.gov.au/ridesourcing for more information.
34. . Do service providers need an ABN and need to register for GST?
See Question 5 above.
Cents per kilometre method and instant asset write off
35. As only two methods apply now does the 5000km apply to both cars and commercial vehicles?
The cents per kilometre method only applies to cars that are designed to carry less than one tonne and carry less than 9 passengers. The cents per kilometre method applies on a per car basis.
36. There should be a ratio for GST set by the ATO if using the cents per kilometre method
The Government has announced the cents per km to one rate of 66c per km regardless of the size of the engine for the 2015-2016 income year and onwards.
37. Does the instant $20,000 write off include the GST component or can it be $22,000?
The cost of the asset must be less than $20,000. However, in working out the cost of the asset you can deduct any GST credit that you are entitled to.
For example: • You buy a car for $20,900 (including $1,900 GST) that you will use 50% for business and 50% for private purposes. • You claim a GST credit of $950 (50% of $1,900). • The cost of the car will be $19,500 ($20,900 – $950). • As this amount is less than $20,000, you will qualify for the concession. Refer to https://www.ato.gov.au/General/New-legislation/Indetail/Direct-taxes/Income-tax-for-businesses/Small-Business–expanding-accelerated-depreciation/ for more information.
38. Does the 100% depreciation claim for assets costing less than $20,000 relate to the total price of the asset or the business use position of the asset?
In other words, if a car costs say $19,500 but is used 50% for ride-sourcing, can $9,750 be claimed for it?
The asset must cost less than $20,000 (exclusive of GST credits – see question 37). You then deduct the proportion that relates to your business use.
39. Can an asset be claimed that actually cost $22,000 including GST which equates to $20,000 exclusive of GST?
Please see the response for question 37 above.
40. If cents per kilometre method is chosen, and I drive 500km for ride-sourcing, my entitlement to input tax credits on motor vehicle expenses is 20%?
Is this correct?
The cents per kilometre method is only for income tax deductions for the car expenses where you are claiming less than 5,000 kilometres. The amount paid is for all your car expenses and it does not include your GST credits. You will still need to apportion your travel expenses to calculate the amount of GST credits you can claim?
41. Will the tax office have an industry benchmark of dollars per kilometre and how can this be recorded/checked as the car is also private?
There is no industry benchmark for ride-sourcing.
Compliance
42. What is being done to ensure ride-sourcing drivers are abiding by the same regulations and tax obligations as taxi drivers?
Refer to www.ato.gov.au/ridesourcing for information.
43. What are the tax treatments and required compliances?
You are required to register for GST from 1 August 2015. You will also have a continuing income tax liability for any income earned as a driver for all relevant financial years. Refer to What you need to do for more information.
44. If someone purchased a car after 12th May 2015 for $15000 and was using it as personal vehicle and started using it as Uber car in August 2015. Will he still be able to claim 100% for assets purchased under $20,000 for a business purpose?
No. You must have been running your small business when the asset was purchased to be able to claim the immediate deduction for assets purchased under $20,000 after 12 May 2015.
45. I am a full time truck driver employed by a company. As part of my job i have to keep my truck clean ie washing the exterior. If I take my truck to a truck wash facility and pay them to wash it, can I claim that cost?
If the cleaning of the truck is related to your employment income you can claim the expense as an income tax deduction for a work related expense.
46. What deductions can be claimed by ride-sourcing drivers?
Refer to www.ato.gov.au/ridesourcing for information.
47. How can I claim motor vehicle expenses when use will vary according to the rides sourced?
Refer to www.ato.gov.au/ridesourcing for examples of what kilometres you can claim and how to keep the necessary records
48. Are tolls tax deductible when you are online but do not have a passenger?
You can only claim a deduction for bridge and road toll where you have incurred the expense while producing ride-sourcing income. See www.ato.gov.au/ridesourcingfor examples of driving for ride sourcing and driving for personal use.
49. How costs associated with the car are deductible and GST components on that work?
Refer to ‘Claiming car expenses’ at www.ato.gov.au/ridesourcing
50. When a loss occurs how much can be claimed against normal income?
In limited circumstances, sole traders can offset a business loss against other income they earn, like salary and wages. To be eligible to do this you must meet the income requirement and
pass one of four tests. If you do not meet these conditions then you cannot offset your businesses losses against your other income, instead you carry forward your business loss to the next year to be offset against your business income from the same or a similar business activity.
For more information see Non-commercial losses
51. What expenses can I deduct from my tax/BAS?
Refer to ‘Claiming car expenses’ at www.ato.gov.au/ridesourcing
52. Are meal costs deductable during shifts?
No. Meals are generally considered a personal expense under the tax law and not deductible.
53. What are the allowable deductions?
Refer to www.ato.gov.au/ridesourcing for more information.
54. If I trade as a company do I need to transfer the ownership of the car to be able to claim car expenses and depreciation?
The rules for deducting car expenses are different for companies than sole traders. A company cannot claim depreciation for a car they don’t own or lease, but may be able to claim car running costs the company incurs. There may be fringe benefit tax consequences where a company meets car expenses and there is private use. We recommend that you seek professional advice so you can get advice on what is suitable in your circumstances.
55. Will my taxable income be calculated by my part time job as well as my ride-sharing income?
Or will this happen separately?
Your total income tax payable is calculated on all your taxable income combined.
56. If I provide the ride to work to another person and share the petrol cost, is this assessable income for me?
No – this is a personal arrangement and you are merely sharing a personal expense.
57. What are my tax obligations if I stopped driving before 1 August?
The ATO has explained that we will not take compliance action in respect of your GST obligations if you were not ride-sourcing driver
on and after 1 August 2015. However, your income tax obligations are not subject to the same concession as for GST. Refer to www.ato.gov.au/ridesourcing for more information.
Sole trading
58. Is running the ride share under a company name considered as sole trading?
No.
59. What is an enterprise?
If I am a sole trader do I still have to register for GST?
An enterprise includes an activity or a series of activity that are done in the form of a business. Yes, if you are a sole trader you are required to be registered for GST if your turnover meets the $75,000 threshold. If you provide ride-sourcing services you are required to be registered irrespective of the amount of your turnover. Refer to ‘Are you carrying on an enterprise’ at www.ato.gov.au/ridesourcing for more information.
60. Can a sole trader choose 1/3 or the 12% method?
From the 2015-2016 income year the Government is simplifying how motor vehicle expenses are claimed. The Government is removing the 1/3 and 12% method. These methods are available for motor vehicle claims up to the 2014-15 income year.
61. Will the driver be classified as a contractor of Uber?
Is it possible to argue ride-sourcing as a hobby if you are not driving frequently?
Ride-sourcing drivers are independent contractors. Refer to ‘Are ride-sourcing drivers’ employees or independent contractors?
’ at www.ato.gov.au/ridesourcing Whether any activity is a hobby or a business is a matter of fact and depends on the circumstances involved. However, as a general statement, we do not consider ride-sourcing would be a hobby. If you are uncertain about whether you are carrying on a business or enterprise, you may write to us for a private ruling. Refer also to GST consequences in providing ride-sourcing services for more information
62. Do I keep a log book for business kilometres only?
To be able to correctly apportion your car expenses you need to keep a log book for recording both business and personal travel for a 12 week period. Refer to Keeping a log book for more information.
63. Can I use the ATO app to keep track of my deductions and kilometres?
At the moment the ATO app (the mydeductions functionality) cannot be used for business records.
64. If not PSI are we saying that the income is generated by the use of the vehicle rather than the driver and if so, what business industry code would I use?
As a driver you are operating a business to provide ride-sourcing services. You can use industry code 46239 Road Passenger Transport or 46231 which covers Taxi Services. If you need to allocate an industry code, use one relating to driving or taxi services.
65. Which is the easiest way to keep the ride-sourcing revenue, log book, bank account transactions or both?
You need to keep your records in such a manner so that you have access to them for 5 years following your lodgement of your income tax return and you can substantiate expenses claimed, how you calculated any apportionment of expenses, and calculate the income that you earned. It is best if you can keep original or copies receipts/invoices of all expenses that you want to claim, income statements from the ridesourcing provider, and where you are apportioning expenses a log book or diary records showing business and personal use.
66. What about if I sold the car that I used for ride-sourcing, are there any capital gains tax issues?
Cars are exempt from capital gains tax
67. Is there any capital gain issues that we should consider since the car will generate an income?
Cars are exempt from capital gains tax Data matching
68. This may be an out of topic question but do you do data matching for the taxi industry as well?
Data matching is a process that can be used in respect of any industry and any taxpayer.
69. How is the ATO identifying ride-sourcing entities?
The ATO has third party information gathering and access powers that can be used to identify ride-sourcing entities. Sometimes information is voluntarily provided to us. Refer to www.ato.gov.au/data-matching-protocols/ for more information Technology based industries
70. How does the ATO intend to deal with new technology based industries that create income for others?
The ATO will continue to apply the tax laws to arrangements, including new technology based industries. Definitions
71. How does the definition in s195-1, in particular “…by taxi or limousine…” apply to a standard motor vehicle, when neither is defined and therefore takes their usual meaning?
As noted in our web guidance, we consider that, for GST purposes, the word ‘taxi’ takes on its broad ordinary meaning of a car made available for public hire that is used to transport passengers for fares.
72. What is ride-sourcing?
Ride-sourcing is an ongoing arrangement where: • a driver makes a car available for public hire • a passenger uses, for example, a website or smart phone app provided by a third party (facilitator) to request a ride • the car is used to transport the passenger for payment (a fare) with a view to profit for the driver. Ride-sourcing is one example of collaborative consumption in the sharing economy. Refer to www.ato.gov.au/ridesourcing for more information
73. I missed part 1 of the series is there a way to access an archived version online?
Yes, access part 1 of the webinar in the document library at http://lets-talk.ato.gov.au/ridesourcing
74. I want to understand any implications for my ‘designated driver’ service if we were to ultimately offer a ‘ride-share’ option.?
We understand that the designated driver service is similar to ride-sourcing in some aspects and different in others. We are happy to provide guidance on designated driver services to anyone providing those services. However, we would need to know a bit more about the specifics of any given arrangement before we could
provide definitive guidance on that arrangement.
75. Is there any possibility of getting notes of this webinar?
Yes, presentation is published to the document library on let’s talk http://lets-talk.ato.gov.au/ridesourcing 76. Are we able to have a PDF of the webinar points?
Yes, presentation is published to the document library on let’s talk http://lets-talk.ato.gov.au/ridesourcing
