Ride-sharing giant, Uber, has launched legal action against the Australian Tax Office seeking to overturn the GST demands on its drivers.
The company lodged an application with the Federal Court yesterday afternoon accusing the ATO of “clearly and unfairly targeting” its drivers while a review of the tax system was still underway.
“To be very clear, we believe all our driver-partners should pay their appropriate share of tax and meet their tax obligations,” the company said in a statement.
“However, we feel they have been unjustly singled out by the ATO for different tax treatment than truck drivers, bike messengers, Airbnb hosts or any other participant of the sharing economy.”
While today marks the deadline for Uber drivers in Australia to get an ABN, register and begin charging GST, the company has already asked all 9000 of its drivers to seek advice from their tax advisers on whether to ignore the ATO’s orders.
Earlier this year, the ATO announced that “people who provide ride-sourcing services are providing ‘taxi travel’ under the GST law” and would need to charge GST on the full fare fare as well as reporting income in their tax returns.
The move was spurred on by the Australian Taxi Industry Association (ATIA) who described Uber as “yet another example of multi-billion-dollar companies wanting to make money in Australia but not pay local taxes”.
“The ATO’s decision to make ride-hailing drivers register for GST simply treats them exactly the same as Australian taxi drivers,” ATIA chief executive Blair Davies told the ABC.
“UberX drivers provide point-to-point passenger transport services for commercial reward, it’s just a form of taxi service.”
But Uber’s director of public policy, Brad Kitschke, maintains that the ATO’s interpretation that ride-sharing is ‘taxi travel’ is inherently flawed.
“There needs to be a wake-up Australia moment on this,” Kitsche told the AFR.
“We’ve said to government, ‘let’s have a conversation about this and about how the market is changing and decide what is appropriate’. There are industrial relations, competition and tax issues.
“We think the decision they’ve taken is motivated by the wrong agenda.”
Uber has also called out on the ATO’s decision to apply outdated measures to the company’s ride-sharing business model.
“Over fifty jurisdictions around the world have recognised ride-sharing as a new model requiring updated regulations that reflect its unique attributes,” the company said in a statement.
“The guidance by the ATO has tried to fit a new technology model from today into a 1990s regulatory framework that was written long before this technology ever existed.”
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