The Federal Court has handed down a decision in a case that deems ride-sourcing is taxi travel within the meaning of the GST law. If the applicant in this particular case appeals this decision, the ATO has announced that it will continue to administer the law according to its already published advice until there is a different decision. Federal Court rules that ride-sourcing is taxi travel

The ATO says that a lot of Australian taxpayers are taking up ride-sourcing to earn more income, and some may be your clients. It therefore advises tax practitioners that they should advise clients with a ride-sourcing enterprise to:

  • 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
  • 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 emphasises in the same announcement that where it matches people who provide ride-sourcing through data matching, that it will continue to write to them to explain their tax obligations.

 

Related story: Tax and the sharing economy