ATO releases new advice on tax consequences

The ATO has released advice on the tax consequences of a range of collaborative consumption activities.

The advice concerns activities that include ride-sharing, provided as part of the “sharing economy”.

There is also advice on the provision of accommodation supplies, parking services and making offers to provide goods or services to a consumer.

The ATO has confirmed that people who provide ride-sourcing services are providing ‘taxi travel’ under the GST law. The existing tax law applies and so drivers are required to register for GST regardless of their turnover.

“Affected drivers must register for GST, charge GST on the full fare, lodge business activity statements and report the income in their tax returns,” said Deputy Commissioner James O’Halloran.

”We understand that people often don’t consider the tax consequences of new and emerging business models. Our first step is to assist taxpayers involved in the sharing economy to meet their tax obligations.”

Mr O’Halloran said drivers who do not have an ABN and are not registered for GST can easily apply online.

In an interview with Fairfax Media, David Rohrsheim, Uber's general manager in Australia, said the company disagrees with the ATO's interpretation and has written to drivers informing them of plans to challenge the ATO decision.

"We will be challenging this, so stay tuned," Mr Rohrsheim said.

Recognising that some taxpayers may need to take corrective actions, the ATO is allowing drivers until 1 August 2015 to get an ABN and register for GST.

The ATO has provided more detailed information on the sharing economy and tax requirements for ride-sourcing here.

 

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