A legal challenge by Uber that would have seen its drivers exempt from paying GST has failed after a Federal Court ruling in Sydney today.
At a hearing in Sydney today, the court ruled Uber provided a “taxi service” and must pay the tax, thereby ending an 18-month legal battle.
In August 2015, the Australian Taxation Office (ATO) ruled Uber drivers must register for the GST even if they earn less than the small business threshold of $75,000 per year.
This meant drivers paid 10 per cent GST and a commission of about 25 per cent to Uber from the first dollar they earn.
Unlike small businesses, taxis must pay GST on every dollar they earn. Unlike taxis, Uber does not accept cash.
During the case Uber argued its drivers were not taxi drivers because they could not use taxi ranks or pick up passengers on the roadside.
Uber responded to the 2015 ruling by lifting its prices by 10 per cent.
Because Uber drivers were treated as independent contractors, and not employees, they were responsible for their own tax arrangements.
Sydney-based Uber driver Mark Aliprandi, who has driven more than 13,000 trips for the company, said consumers were the ones affected.
The consumer has missed out on a potential discount if Uber had won, so I guess the consumer loses in this case
“For drivers, it’s not really going to change anything.
“Drivers who have not done their GST in the past 18 months, well I supposed the tax office could come after them.”