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 statements; 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 according to their published advice (at least until there is a different decision).
The ride sourcing data matching program has been developed to address the compliance risk of the registration, lodgement and reporting of businesses offering ride sourcing services as a driver.
It is estimated up to 74,000 individuals (ride sourcing drivers) offer, or have offered, this service.
The ATO will request details of all payments made to ride sourcing providers from accounts held by a ride sourcing facilitator’s financial institution for the 2016/17 and 2017/18 financial years.
It will match the data provided by the facilitator’s financial institution against our records.
This will identify ride sourcing drivers that may not be meeting their registration, reporting, lodgement and or payment obligations.
Where the ATO is unable to match a driver’s details against ATO records, it will obtain further information from the financial institution where the driver’s account is held.
The objectives of the Ride Sourcing data matching program are to:
- Promote voluntary compliance and increase community confidence in the integrity of the tax system.
- Identify those individuals failing to meet their registration and/or lodgment obligations and assist them to comply.
- Gain insights from the data that may help to develop and implement treatment strategies to improve voluntary compliance; which may include educational or compliance activities as appropriate.
How the data will be used
The ATO will initially use the data they acquire to identify and inform ride sourcing providers of their taxation obligations as part of an information and education campaign.
Where necessary, the ATO will also initiate compliance action based on the data it acquires.
Should you have any queries in regards to the above article, please do not hesitate to contact our office on
02 4958 1829 or email our Client Support Manager on firstname.lastname@example.org
Ref: ATO website — Ride sourcing — 2016/17 and 2017/18 data matching program protocol