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Uber Loses ATO Battle, Drivers To Pay GST

A Federal Court has rejected Uber’s argument that its drivers should not have to pay GST because it is not providing “taxi travel”, siding with the Australian Tax Office in a lawsuit over unpaid taxes that could have broad implications for the popular app.

Justice John Griffith of the Federal Court said the phrase “taxi travel” should be “construed broadly and not technically” and accepted the Tax Office’s definition of a “taxi” as a “vehicle available for hire by the public and which transports a passenger at his or her direction for the payment of a fare that will often, but not always, be calculated by reference to a taxi meter”.

As a result of the ruling, Uber drivers will have to pay 10 per cent GST on top of the 25 per cent commission to Uber.

A statement released by the company today said “We are disappointed in the federal court’s decision today. We are reviewing the decision and will provide our driver-partners with more information as soon as we can.”

Uber was also ordered to pay the ATO’s legal costs.

The legal battle between the ATO and Uber began in 2015, after the on-demand transport company disagreed with the tax office’s assertion that its drivers are providing a taxi service and should be taxed accordingly.

Australian Taxi Industry Association’s Chief Executive Officer Blair Davies has released a statement on the ruling, saying “This is a win for common sense. The Federal Court has vindicated the ATO’s ruling that uberX and other ride-sourcing drivers need to collect and remit GST just like regular taxi drivers. Whether you think you are in the sharing economy or some other part of the economy is not the issue, if you are providing commercial services in Australia you should be treated no differently taxwise from any other sellers of such services.”

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