Uber is seeking a court declaration to say ATO's guidance on GST for Uber drivers is incorrect.

Max Bell

Member
By Misa Han Australian financial review 20 July 2016

After years of intense lobbying to get the privileges of the taxi industry, ride sharing app Uber has refused to be labelled a taxi in order to avoid GST.

If Uber loses, Uber passengers will have to start paying 10 per cent more for their rides as drivers will be required to collect GST.

The definition of "taxi service" was the central question that occupied much of the first day of the court hearing in the ride sharing app's legal fight against the Australian Tax Office over GST.

Uber sued the Tax Office on the eve of the GST deadline after the Tax Office said Uber drivers must pay GST regardless of how much they earn because they are providing a modern equivalent of taxi service from August 1, 2015.

Uber's argument is its drivers should not have to pay GST unless they earn more than $75,000 because they are not providing taxi services.

With the specific exception of taxi travel, there is a universal rule that businesses with less than $75,000 turnover do not need to collect GST.

Uber's lawyer, Tom Thawley, SC, told the court on Wednesday the tax law chose to target "two precisely identified industries" being the taxi and limousine industries.

He said Uber is not a taxi service for the purposes of the tax law, because taxis can pick up passengers without booking while Uber cannot.

"There's a sharp distinction that revolves around the rank and hail system. Taxis can share the pre-booked market but nobody else but a taxi can engage in rank and hail," Mr Thawley said.

According to Uber, other significant differences include the fact Uber does not run a taxi metre, taxis must have a label with a light on the roof and taxis generally have an obligation to pick up all customers subject to limited exceptions.

Mr Thawley also said the Australian definition of taxi rather than the British version should be used because they have "come up with it by their own particular experiences".

Justice John Griffiths observed that in England there are minicabs which only operate in the pre-booked market.

"There is a curious creature in England called minicabs, which you can't hail or rank, you have to telephone," he said.

Uber used the example of driver Brian Fine to illustrate according to the Tax Office's guidance, he was due to pay GST on the $47,000 he earned in the 2015 financial year, even though he drove his private vehicle and he could not pick up an unbooked passenger through the rank and hail system.
'Uber is a brand'

In Uber's submission, economist Dr Peter Abelson said based on his analysis of industry reports, policy statements, regulatory and other documents, the term "taxi" is not used as a catch-all term that describes all point to point transport for a fare.

The Tax Office in its defence quoted a number of dictionary definitions to argue the term taxi should include ridesharing service such as Uber.

Macquarie dictionary editor Victoria Morgan told The Australian Financial Review she was unable to comment on the legal issues but from a linguistic point of view, the word "taxi" would be broad enough to capture ride sharing services such as Uber.

The dictionary defines taxi as a "car for public hire, especially one fitted with a taximeter".

"It's a car available for hire and it falls under that umbrella. Uber is a brand or a company - people know when they call an Uber, they're calling a car or a truck," she said.

"It's the same as Silver Service and Premier," she said, referring to the taxi company names.

However, the dictionary definition would not capture the legal requirements of a taxi, the same way the dictionary definition of the word "electrician" would not describe the qualifications required to do the job.

Uber is seeking a court declaration to say ATO's guidance on GST for Uber drivers is incorrect.

The hearing comes a day after a report commissioned by Uber found the $1 levy on every Uber ride to compensate taxi licence holders was unjustified.

The hearing before Justice John Griffiths is expected to continue for the next two days.

Source : http://www.afr.com/news/uber-argues-it-is-not-a-taxi-to-avoid-gst-20160719-gq9dna
 

χ²(1)

Well-Known Member
well if uber lose and we are classed as taxi drivers then at least we will have somewhere to park in the cbd
Not exactly. Uber drivers will be classified as taxi drivers for the purpose of taxation.

Uber drivers will be classified as private vehicles for the purpose of parking rule enforcement.

The perils of multi-tiered government
 

Bob28

Well-Known Member
What ATO is asking drivers is illegal to pay GST on full fare amount
1. Uber driver not getting paid by pax
2.Uber driver not receiving full fare pay
3 U cant be forced u to collect GST on amount which u haven't banked
4 Ato cant force Uber drivers to collect GST for another entity and come out of their pay

Only way they can make u to pay GST on full amount is if u get paid the full fare amount then uber will invoice u and pay their commision
and if u sending pay to oversees entity u cant claim GST credits
 

LevelX

Well-Known Member
If Uber loses, Uber passengers will have to start paying 10 per cent more for their rides as drivers will be required to collect GST.
article gets this wrong.... can I trust the rest?

What ATO is asking drivers is illegal to pay GST on full fare amount
wrong

1. Uber driver not getting paid by pax
wrong, its all in the wording.

2.Uber driver not receiving full fare pay
also wrong, you receive the full amount, minus ubers commission.

3 U cant be forced u to collect GST on amount which u haven't banked
also wrong

4 Ato cant force Uber drivers to collect GST for another entity and come out of their pay
why stop now, also wrong, every retailer in australia is collecting GST for another 'entity' aka the government.
 

Bob28

Well-Known Member
As retailer or service provider u collect GST on amount which u banked or u invoce u costumer u don't collect GST for any other entity other business u only responsible for u dealings
Also u dont get paid by pax u get paid by Uber
Only way ATO can force u to collect full GST if u get paid full amount by UBER then uber sends u invoice u to pay Uber
Even banks charge commision from transaction and they invoice u for that no difference bank is registered for GST so u can claim GST credit
only difference is bank will deposit full amount of u sales and u need to pay GST on full amount
If u work as subcontractor u dont collect GST on amount which u contractor is charging end consumer
 
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LevelX

Well-Known Member
I have lodged official complaint with ATO hot line will let u know of outcome
Uber claims u are their contractor
Well the ATO deals in facts, so be good to know the outcome.

What directly are you going to get them to confirm?
 

LevelX

Well-Known Member
Yes I'm aware, but as above. What directly are you going to get them to confirm? ie what was your complaint about?
 

Bob28

Well-Known Member
Yes I'm aware, but as above. What directly are you going to get them to confirm? ie what was your complaint about?
ATO is forcing UBER driver to collect GST for dealing of another entity
If u work as subcontractor u dont collect GST on amount which u contractor is charging end consumer
 

LevelX

Well-Known Member
ATO is forcing UBER driver to collect GST for dealing of another entity
If u work as subcontractor u dont collect GST on amount which u contractor is charging end consumer
Ok... Good to get an answer then but I'm sure you'll be pointed to here https://www.ato.gov.au/Business/GST...rough-ride-sourcing-and-your-tax-obligations/

and be told that you do receive the full fare, minus a commission. So you're on the hook for GST on the entire fare, as per the above ATO link.

Your issue isn't so much paying the full fare GST amount, your issue is why doesn't the Uber commission have GST on it, which would give you a GST input credit to offset what is owed. Which is basically what your asking/saying.
 

Bob28

Well-Known Member
no u dont get the point
taxi driver bailment agreement driver must be GST registered they only pay GST on their pay %55 of the takings other %45 taxi plate owner si paying ATO not asking bailment driver to pay GST on full amount
 

Bob28

Well-Known Member
Your issue isn't so much paying the full fare GST amount, your issue is why doesn't the Uber commission have GST on it, which would give you a GST input credit to offset what is owed. Which is basically what your asking/saying.
Process for driver to be responsible for full fare GST will be u collect full amount then UBER invoicing service fee if UBER is entity not registered for GST u are liable full GST and u can't claim tax credit for their fee
 

LevelX

Well-Known Member
no u dont get the point
taxi driver bailment agreement driver must be GST registered they only pay GST on their pay %55 of the takings other %45 taxi plate owner si paying ATO not asking bailment driver to pay GST on full amount
As above, if ubers commission had GST on it, you wouldn't be paying 'GST' for them as you are today, only on your 'share'. Likewise in your taxi you need to look at how that money is split and if GST is part of it when split, which I'm guessing it would be, hence why the taxi driver is only paying GST on their share, and the plate owner is paying GST on theirs as well.

So.... as above, again your issue is that the Uber Commission doesn't have GST as part of it and they are not paying GST.
 

Bob28

Well-Known Member
As above, if ubers commission had GST on it, you wouldn't be paying 'GST' for them as you are today, only on your 'share'. Likewise in your taxi you need to look at how that money is split and if GST is part of it when split, which I'm guessing it would be, hence why the taxi driver is only paying GST on their share, and the plate owner is paying GST on theirs as well.

So.... as above, again your issue is that the Uber Commission doesn't have GST as part of it and they are not paying GST.
we going in circle u dont get the point let see what will be official ATO explanation they are bonded by law to respond
 
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