​Uber challenges ATO in court over GST

Uber has filed documents with the Federal Court against the Australian Taxation Office to overturn a directive that requires Uber drivers to register for the Good and Services Tax (GST).
Written by Aimee Chanthadavong, Contributor

Australian Uber drivers had until August 1 to register for the Good and Services Tax (GST), but the controversial ride-sharing app has lodged legal action against the Australian Taxation Office (ATO) to have this overturned.

In May, the ATO issued a directive that advised those providing a ride-sharing service needed to have an Australian Business Number and be registered for GST.

However, Uber lodged documents to the Federal Court last Friday arguing that the public issue by the ATO "unfairly targets Uber's driver-partners".

An Uber spokesperson told ZDNet that it believes the ATO's guidance should not have been issued, given that a federal tax review is currently underway.

"To be very clear, we believe all our driver-partners should pay their appropriate share of tax and meet their tax obligations," the company said.

"However, we feel they have been unjustly singled out by the ATO for different tax treatment than truck drivers, bike messengers, Airbnb hosts, or any other participant of the sharing economy."

The company went on expressing its disappointment in the ATO, saying it is unfairly targeting Uber's driver-partners, who "must register and remit this tax from the first dollar earned". This is in comparison to individuals who are only required to register for GST once they reach a turnover of more than AU$75,000 a year.

"The guidance by the ATO has tried to fit a new technology model from today into a 1990's regulatory framework that was written long before this technology ever existed. Common sense would tell you that isn't going to work," the company said.

However, the ATO has hit back at Uber saying that that the published advice is consistent with the current GST law, which says that if someone is using a car to transport passengers for a payment then they are considered to be providing "taxi travel".

An ATO spokesperson has also advised that the agency is considering possible legal proceedings lodged by Uber.

"Impacted drivers are reminded that they will need to pay the GST collected through their monthly or quarterly Business Activity Statement," the spokesperson said.

While Uber consistently finds itself back in court and under the microscope, the company has managed to score itself $100 million in investment capital. A person with knowledge of the matter told Bloomberg that Uber, which is currently valued at approximately $50 billion, has received an additional funding boost from Microsoft.

The last time the two companies were in talks was when Uber bought a series of mapping assets from Microsoft Bing as a way to improve its in-app map.

Uber has also said it will be investing $1 billion over the next nine months to drive its business in India, the company's largest market outside of the US. The company said the funds will be go toward expanding operations beyond the 18 cities where it currently operates. There also plans to clock up one million rides a day over the next six to nine months and provide 200,000 jobs by 2016.

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