Uber drivers have until August 1 to get an ABN, register and begin charging GST.
As part of its crackdown on ride-sharing service, Uber, the Australian Tax Office has warned that drivers not complying with GST registration will risk being hit with a $3600 fine and be subject to review and possible auditing.
“We will be using data and information from various sources to identify drivers and check to make sure they are registered,” Mr Hardy said.
The ATO will also draw on bank records, vehicle registration information and private insurance records to identify Uber drivers, the Australian reports.
In its interpretation of existing tax law earlier this year, the ATO classified ride-sharing services like Uber like any other taxi service and would therefore need to pay GST.
The decision, which has been welcomed by the taxi industry, has come under fire by Uber’s head of public policy, Brad Kitschke, who writes that “ride-sharing trips as ‘taxi travel’ was an ‘uncertain area of the law’.”
“There would be no need or justification for new state and territory based legislation or regulations specifically dealing with ride-sharing, if indeed ride-sharing could legitimately be seen to constitute ‘taxi travel’,” Kitschke said in his letter to Tax Commissioner Chris Jordan yesterday.
“We maintain that the ATO’s interpretation that ride-sharing is ‘taxi travel’ is inherently flawed,” he says.
“We consider it irregular that the ATO rushed a decision with the knowledge of this ambiguity.”
To date, most Uber drivers have operated under the presumption that they like most businesses, must meet the $75,000 threshold before paying GST.
But the taxi industry has come out saying that Uber drivers should “pay their fair share of tax” and be subject to the same rules and regulations as taxi drivers.
“The ATO’s decision to make ride-hailing drivers register for GST and pay their fair share of tax, like taxi drivers, closes a loophole that should never have existed in the first place,” wrote Australian Taxi Industry Association CEO Blair Davies to the ATO.
“Hopefully the ATO won’t stop with the ‘little fish’ UberX drivers but will go after the big fish as well. Uber is a huge private company that has come to Australia for one purpose – to make money.
“It’s completely reasonable to say to Uber then, that it should ‘pay its own way’, and that means pay tax on every dollar of profit generated by rides brokered in Australia,” Davies said.
Earlier this year, the ATO indicated it was cracking down on digital businesses within the “sharing economy” with ATO deputy commission James O’Halloran saying that tax laws should apply regardless of technology.
“The existing law applies equally whether the buyer or seller come together at a bricks and mortar business or via a mobile phone app or a website,” he said.