Ride-sourcing drivers use their own cars to
transport paying passengers who book the ride
through a smartphone app. The ATO believes this
constitutes taxi services. Uber disagrees.
The documents were filed by Uber B.V., a part of the
company registered in the Netherlands. An Uber
spokesman said it was appropriate for the Dutch
company to take action because that was the "company
that provides the platform and technology" and which
has a relationship with drivers.
Uber B.V. was being represented by a solicitor from
accounting firm Ernst and Young's Tax Controversy
division, Craig Jackson.
A spokeswoman for the ATO said it was considering
the legal proceedings, but that its advice to
drivers was "advice is consistent with the current
GST law".
The court documents also outline multiple meetings,
teleconferences and correspondence between Uber and
ATO representatives in the lead up to the ATO's May
20 declaration that GST rules would come into effect
on August 1.
Since August 1, the ATO has required ride-sourcing
drivers to register for and pay GST on fares. This
effectively reduces their earnings by 12.5 per cent
because they pay GST on the gross fare before Uber
deducts its 20 per cent commission.
It also means drivers must declare their earnings to
the tax office. Before August 1 many drivers were
not declaring their earnings or paying any tax on
money earned through ride-sourcing. Research by
Fairfax Media has found many drivers were unhappy
with the new rules.
Uber disputes the ATO's interpretation, but rather
than providing clear instructions to drivers has
been advising them to seek accounting advice,
particularly from H & R Block. Uber argues that
unless annual turnover reaches the ATO's $75,000
threshold, an UberX driver was not carrying on an
enterprise.
Director of tax communications at H&R Block, Mark
Chapman, said its advice to drivers was "to pass on
[to drivers] what the ATO has told them, which is
that they need to have an ABN and be registered for
GST".
Meanwhile, the ATO has been conducting a
communications campaign in online forums to tell
drivers they must register for and pay GST,
regardless of how much money they earn.
Source::
The Sydney Morning Herald , dated 04/08/2015. |