Current law states that all taxi drivers and chauffers including ride-sharing must be registered for GST from the first dollar of income (division 144 of the GST Act). This is to avoid confusion about pricing, and results in all customers paying the same rates.
Uber challenged the ATO over the application of GST on the basis that “ride-sourcing drivers do not supply taxi travel”. The ATO view is that providing driving or ride-sharing services is the same as providing taxi travel services, because a car is made available for public transport use and as such the current law stands for Ride-Sharing drivers.
The ATO has previously admitted to “some uncertainty about how tax applies to various sharing economy models” and won’t be pursuing any Uber drivers regarding records and GST registration prior to August 2015. However, from August 2015 onwards, the ATO expects that all Uber drivers will be registered for GST, providing invoices and declaring Uber-related income.
Drivers offering services via Uber are doing so with Uber acting as an agent by providing the booking and payment gateway, therefore there are certain obligations the driver needs to meet.
- Registration for an ABN and GST is the obligation of the individual driver.
- Drivers must complete and lodge a quarterly BAS regardless of the amount of turnover. Because registration is mandatory drivers may not elect to report annually.
- Drivers must issue tax invoices, when requested within 28 days, if the transaction is over $82.50. If the transaction is less than $82.50, the proof of payment receipt from the customer’s credit card or the email receipt is sufficient for a customer to claim a GST credit.
- Income derived from Uber is declarable on the individual tax return at the end of the financial year.
Paying GST Using ATO Payment Card
Drivers, taxi drivers, chauffers, limousine drivers and rideshare drivers have the option to use an ATO activity statement payment card (this is only available to people in the taxi services industry).
The card can be used to make small frequent payments; however, the driver must record the payments to work out the final balance due when the BAS is due. The BAS must still be lodged by the due date, and any outstanding amount paid.