Ride-sourcing and tax
Ride-sourcing is the term given to transporting passengers for a fare through the sharing economy. If you have a ride-sourcing enterprise, fares you receive are subject to GST. Money received from ride-sourcing is also subject to income tax.
Before registering to drive and signing up with a facilitator make sure you are aware of your tax obligations.
Ride-sourcing, is an ongoing arrangement where:
• You (a driver) make a car available for public hire for passengers
• A passenger uses a website or app provided by a third party (facilitator) to request a ride, for example Uber, GoCatch and others
• You use the car to transport the passenger for payment (a fare).
What you need to do:
Similar tax obligations for taxi drivers apply to ride-sourcing providers.
The following are the basics you need to know and do for tax purposes, including:
• Keeping records of all your expenses and income
• Apportioning expenses to the time you are providing a ride-sourcing service.
• Include the income you earn in your tax return
• Only claim deductions related to transporting passengers for a fare
GST – if you have a ride-sourcing enterprise
• Get an Australian Business Number (ABN)
• Register for GST regardless of how much you earn (ride-sourcing is taxi travel for GST purposes)
• Pay GST on the full fare
• Only claim GST credits related to transporting passengers for a fare
• Lodge business activity statements
• Know how to issue a tax invoice (you need to provide one for fares over $82.50 if asked)
Further information can be accessed via the ATO’s website https://www.ato.gov.au/General/Ride-sourcing-and-tax/?=redirected or contact us on 5970 8100 we will be more than happy to answer any of your queries.
Amy Bignell, Senior Accountant
MBA BUSINESS SOLUTIONS
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