# Uber drivers complain to Inspector-General of Taxation about ATO approach



## Jack Malarkey (Jan 11, 2016)

https://www.google.com.au/amp/s/amp...-approach-to-gig-economy-20180405-p4z7zr.html

First two paragraphs:

Uber drivers caught by a GST ruling are among those complaining about the tax office's treatment of workers in the sharing economy.

"We have been approached by a number of taxpayers expressing concern about the ATO's approach to the gig economy as it has affected them personally," the Inspector-General of Taxation, Ali Noroozi, told an International Conference on Tax Administration held in Sydney on Thursday.

[Post edited on 7 April 2018 to include the following additional information:]

Here's a link to the Inspector-General of Taxation's speech: http://igt.gov.au/publications/publ...ternational-conference-on-tax-administration/.

And below is an extract from the speech. (Note in particular the interesting reference to 'smart contracts on blockchain' and associated commentary in paragraphs 1.13 and 1.14.):

*The challenge for revenue authorities*

1.8 For revenue authorities, such as the ATO, emerging technologies and platforms present a two-pronged challenge. The first is, of course, to ensure that tax and superannuation obligations are met and workers are appropriately classified and treated for tax purposes. The second is to discharge these obligations in a manner which does not hamper innovation.

1.9 These challenges are highlighted by some of the more recent experiences of the ATO and other regulatory bodies. Let's take the case of Uber. On the one hand, we had taxi drivers who have complained that (at the time) the ATO was not actively enforcing GST obligations on Uber driversleading to an uneven playing field. On the other hand, Uber drivers argued that it was unfair and unjust that they should be registered for GST as many worked part time and earned less than the requisite $75,000 threshold applicable to other small businesses.

1.10 Of course, the question of whether Uber drivers are taxi drivers and therefore needed to be registered for GST was settled by the Federal Court.[5] However, some challenges were evident. Firstly, while the ATO issued its initial directive for Uber drivers to register for Australian Business Numbers (ABN) and to charge and pay GST, the position was not officially settled until February 2017. In the intervening period, many drivers registered and charged GST while others chose not to do so despite the ATO messaging.

1.11 Secondly, once the position was settled by the Federal Court, a number of drivers who had not registered for ABNs or charged GST found themselves in the position of potentially needing backdated registrations, lodgments and payments of GST shortfall. This would not be an easy feat for someone who did not otherwise operate a business or who merely worked as an Uber driver on an ad hoc basis.

1.12 Whereas Uber drivers are required to register and pay GST, riders for delivery services such as Deliveroo and Foodora need not, subject to some conditions, namely if they earn less than $75,000per year and are not carrying on another enterprise. However, for a time, the question of whether Deliveroo and Foodora riders were employees or contractors was a topic of discussion.

1.13 The contractor and employee distinction is important and one which was examined in the IGT review into the ATO's approach to employer obligations.[6] The distinction is important as it presents obligations for both parties. Elsewhere in the world, we have been made aware that revenue authorities are making use of smart contracts on blockchain to easily access and assess the status of the relationship and to determine tax implications.

1.14 The use of blockchain is something that is being tested by government agencies in Australia, including the ATO and it may yield some benefits yet for this area of tax. As part of the IGT's review into the _Future of the Tax Profession_, we are also considering how different jurisdictions, such as the Netherlands, are using blockchain and whether these may be usefully adopted in Australia.

Jack Malarkey's additional comment:

Re 'smart contracts on blockchain', see https://blockgeeks.com/guides/smart-contracts/.

See also http://www.greenwoods.com.au/insights/tax-brief/11-november-2016-tax-in-the-age-of-blockchain/.


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## Stax (Feb 20, 2018)

it's nothing to do with the ATO's approach. It's law that taxi services are charged from zero dollars. There is no $75k threshold.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> it's nothing to do with the ATO's approach. It's law that taxi services are charged from zero dollars. There is no $75k threshold.


There were a few circumstances where that is not the case:

(1) where the activity is done as an employee.
(2) where the activity is done as a hobby. 
(3) where the activity is done without a realistic expectation of making a profit.

Where any of these apply, there is no requirement to have an ABN or register for GST.


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## Stax (Feb 20, 2018)

UberDriverAU said:


> There were a few circumstances where that is not the case:
> 
> (1) where the activity is done as an employee.
> (2) where the activity is done as a hobby.
> ...


not true, if you are supplying taxi services you must have an ABN and be registered for GST

https://www.business.gov.au/info/run/tax/register-for-goods-and-services-tax-gst

"You must register for GST if:


your business has a GST turnover of $75,000 or more
your non-profit organisation has a turnover of $150,000 per year or more 
you provide taxi travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover. This rule applies to both taxi owner drivers and people who just rent a taxi."


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## UberDriverAU (Nov 4, 2015)

Stax said:


> not true, if you are supplying taxi services you must have an ABN and be registered for GST
> 
> https://www.business.gov.au/info/run/tax/register-for-goods-and-services-tax-gst
> 
> ...


Perhaps that's exactly the kind of misinformation the ATO has been taken to task over. The law is quite clear if you care to read it.


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## Stax (Feb 20, 2018)

UberDriverAU said:


> Perhaps that's exactly the kind of misinformation the ATO has been taken to task over. The law is quite clear if you care to read it.


Don't post nonsense:

https://www.legislation.gov.au/Details/C2017C00361/Html/Volume_2#_Toc498004635

144‑5 Requirement to register

(1) You are* required to be registered* if, in *carrying on your enterprise, you supply *taxi travel.

(2) It does not matter whether:

(a) your *GST turnover meets the *registration turnover threshold; or

(b) in *carrying on your enterprise, you make other supplies besides supplies of *taxi travel.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> Don't post nonsense:
> 
> https://www.legislation.gov.au/Details/C2017C00361/Html/Volume_2#_Toc498004635
> 
> ...


Notice how it says "if, in carrying on your enterprise"? As it so happens, certain activities are explicity *not* enterprises:

http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/antsasta1999402/s9.20.html

The provisions you quote only apply to enerprises as defined by the GST act.


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## Stax (Feb 20, 2018)

Carrying passengers for money is carrying on an enterprise. Simples. Or do you think it's a hobby LOL.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> Carrying passengers for money is carrying on an enterprise. Simples.


Where does the law say that?


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## Stax (Feb 20, 2018)

UberDriverAU said:


> Where does the law say that?


It doesn't need to. It's a business so it falls under S9-20(1)(a).

And business is defined in section 195.1

*"business" *includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee


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## Jack Malarkey (Jan 11, 2016)

[I edited my original post on 7 April 2018 to add the following:]

Here's a link to the Inspector-General of Taxation's speech: http://igt.gov.au/publications/publ...ternational-conference-on-tax-administration/.

And below is an extract from the speech. (Note in particular the interesting reference to 'smart contracts on blockchain' and associated commentary in paragraphs 1.13 and 1.14.):

*The challenge for revenue authorities*

1.8 For revenue authorities, such as the ATO, emerging technologies and platforms present a two-pronged challenge. The first is, of course, to ensure that tax and superannuation obligations are met and workers are appropriately classified and treated for tax purposes. The second is to discharge these obligations in a manner which does not hamper innovation.

1.9 These challenges are highlighted by some of the more recent experiences of the ATO and other regulatory bodies. Let's take the case of Uber. On the one hand, we had taxi drivers who have complained that (at the time) the ATO was not actively enforcing GST obligations on Uber drivers leading to an uneven playing field. On the other hand, Uber drivers argued that it was unfair and unjust that they should be registered for GST as many worked part time and earned less than the requisite $75,000 threshold applicable to other small businesses.

1.10 Of course, the question of whether Uber drivers are taxi drivers and therefore needed to be registered for GST was settled by the Federal Court.[5] However, some challenges were evident. Firstly, while the ATO issued its initial directive for Uber drivers to register for Australian Business Numbers (ABN) and to charge and pay GST, the position was not officially settled until February 2017. In the intervening period, many drivers registered and charged GST while others chose not to do so despite the ATO messaging.

1.11 Secondly, once the position was settled by the Federal Court, a number of drivers who had not registered for ABNs or charged GST found themselves in the position of potentially needing backdated registrations, lodgments and payments of GST shortfall. This would not be an easy feat for someone who did not otherwise operate a business or who merely worked as an Uber driver on an ad hoc basis.

1.12 Whereas Uber drivers are required to register and pay GST, riders for delivery services such as Deliveroo and Foodora need not, subject to some conditions, namely if they earn less than $75,000 per year and are not carrying on another enterprise. However, for a time, the question of whether Deliveroo and Foodora riders were employees or contractors was a topic of discussion.

1.13 The contractor and employee distinction is important and one which was examined in the IGT review into the ATO's approach to employer obligations.[6] The distinction is important as it presents obligations for both parties. Elsewhere in the world, we have been made aware that revenue authorities are making use of smart contracts on blockchain to easily access and assess the status of the relationship and to determine tax implications.

1.14 The use of blockchain is something that is being tested by government agencies in Australia, including the ATO and it may yield some benefits yet for this area of tax. As part of the IGT's review into the _Future of the Tax Profession_, we are also considering how different jurisdictions, such as the Netherlands, are using blockchain and whether these may be usefully adopted in Australia.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> It doesn't need to. It's a business so it falls under S9-20(1)(a).
> 
> And business is defined in section 195.1
> 
> *"business" *includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee


The "requirement to register" clause does not mention "business", it mentions "enterprise", and section 9.20 defines both what an enterprise is and what it is not.


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## Stax (Feb 20, 2018)

UberDriverAU said:


> The "requirement to register" clause does not mention "business", it mentions "enterprise", and section 9.20 defines both what an enterprise is and what it is not.


LOL WHAT?

*A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 9.20*
*Enterprises*enterprise is an activity, or series of activities, done:

(a) in the form of a * business; or

You don't know what you're talking about.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> LOL WHAT?
> 
> *A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 9.20*
> *Enterprises*enterprise is an activity, or series of activities, done:
> ...


If section 2 applies, then section 1 does not.


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## Stax (Feb 20, 2018)

so you're wrong about business

and section 2 doesn't apply

you're not an employee, it's not a hobby and you are making a profit

give it up dude, you're guessing


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## UberDriverAU (Nov 4, 2015)

Stax said:


> so you're wrong about business
> 
> and section 2 doesn't apply
> 
> give it up dude, you're guessing


It's not guessing when I've read what the law says. You're ignoring parts of it to suit your agenda.


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## Stax (Feb 20, 2018)

you claimed it doesn't mention business, you haven't read it at all

and which part, be specific

don't wave at a section, which paragraph supports your assertion?


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## UberDriverAU (Nov 4, 2015)

Stax said:


> which part, be specific
> 
> don't wave at a section, which paragraph supports your assertion?


You say there are no exceptions, yet clearly 9.20 (2)(a-d) exclude activities from being an "enterprise", which means GST registration is not required in all circumstances.


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## Stax (Feb 20, 2018)

UberDriverAU said:


> You say there are no exceptions, yet clearly 9.20 (2)(a-d) exclude activities from being an "enterprise", which means GST registration is not required in all circumstances.


so which one applies to you or uber drivers in general?
spit it out
this should be good


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## UberDriverAU (Nov 4, 2015)

Stax said:


> so which one applies to you?
> 
> spit it out


None of them do, and I have never claimed any of them have. It would be very easy to have (c) apply, simply by turning the app off when your revenue covers your expenses.


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## Stax (Feb 20, 2018)

UberDriverAU said:


> None of them do, and I have never claimed any of them have. It would be very easy to have (c) apply, simply by turning the app off when your revenue covers your expenses.


Do you think you can own a gun without a licence because you don't intend to use it?

If you have no intention of making a profit then none of your expenses are deductible genius.

And you have already collected gst by that time. Duh.



Jack Malarkey said:


> https://www.google.com.au/amp/s/amp...-approach-to-gig-economy-20180405-p4z7zr.html
> 
> First two paragraphs:
> 
> ...


How many of those complaining are switching off their apps when their expenses matches their revenue? LOL

Or and you just relying on the absurd case? A case which even Uber itself didn't bring.


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## Jack Malarkey (Jan 11, 2016)

What are 'smart contracts on blockchain' as referred to by the Inspector-General of Taxation? See https://blockgeeks.com/guides/smart-contracts/.

See also http://www.greenwoods.com.au/insights/tax-brief/11-november-2016-tax-in-the-age-of-blockchain/.


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## UberDriverAU (Nov 4, 2015)

Stax said:


> Do you think you can own a gun without a licence because you don't intend to use it?
> 
> If you have no intention of making a profit then none of your expenses are deductible genius.
> 
> ...


Your arguments don't change what the law is. It's simply not true that driver's must register for GST in all circumstances, because the law provides very clear circumstances when it's not required. To contend otherwise isn't arguable in my opinion.


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## ricdam (Jan 25, 2016)

UberDriverAU said:


> Your arguments don't change what the law is. It's simply not true that driver's must register for GST in all circumstances, because the law provides very clear circumstances when it's not required. To contend otherwise isn't arguable in my opinion.


TR 92/3 says that profit doesn't have to be the sole or dominant intention, just a "significant purpose".

These occasional hobby drivers may say money was not a significant purpose to them, but the ATO will argue this: The Uber app does two key things. Connects drivers with riders, and manages payment. By applying to be an Uber driver, and by using the app, you are using both of these functions. If you didn't want to be paid, and just wanted to connect to riders without payment, you could approach people in taxi queues, post ads on Gumtree, or make offers on social media. By choosing to register with Uber, you elected to use their specific pricing and payment model, which clearly is structured to provide some level of profit to the driver.

Subjective and arguable perhaps, but this is likely to be their logic.

Ps: words from a professional accountant


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## UberDriverAU (Nov 4, 2015)

ricdam said:


> TR 92/3 says that profit doesn't have to be the sole or dominant intention, just a "significant purpose".
> 
> These occasional hobby drivers may say money was not a significant purpose to them, but the ATO will argue this: The Uber app does two key things. Connects drivers with riders, and manages payment. By applying to be an Uber driver, and by using the app, you are using both of these functions. If you didn't want to be paid, and just wanted to connect to riders without payment, you could approach people in taxi queues, post ads on Gumtree, or make offers on social media. By choosing to register with Uber, you elected to use their specific pricing and payment model, which clearly is structured to provide some level of profit to the driver.
> 
> ...


That ruling relates to income tax, so it has nothing to do with GST and requirements to register for GST. If you are not making a profit, then the ATO receives no income tax dollars from you whether or not your Uber income is included in your assessable income.


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## Sleepo (Dec 1, 2017)

UberDriverAU said:


> Your arguments don't change what the law is. It's simply not true that driver's must register for GST in all circumstances, because the law provides very clear circumstances when it's not required. To contend otherwise isn't arguable in my opinion.


Your belief in your argument is strong until such time as the law says if you are providing a taxi service, (ridesharing) then none of the other matters re GST apply


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## UberDriverAU (Nov 4, 2015)

Sleepo said:


> Your belief in your argument is strong until such time as the law says if you are providing a taxi service, (ridesharing) then none of the other matters re GST apply


Opposite way around. You must be carrying on an enterprise before the requirement to register can apply. If that wasn't the case, then every employee would be required to register for GST where the business they worked for exceeded the $75K threshold. Section 9.20 (2)(a) is what states that an activity done as an employee is *not* an enterprise. If you feel so strongly that you are correct, why don't you get onto the ATO and let them know that there are a stack of employees who should be registered for GST but are not? If what you are arguing were correct, what point could there be in having 9.20 (2) in the legislation?


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## Sleepo (Dec 1, 2017)

UberDriverAU said:


> Opposite way around. You must be carrying on an enterprise before the requirement to register can apply. If that wasn't the case, then every employee would be required to register for GST where the business they worked for exceeded the $75K threshold. Section 9.20 (2)(a) is what states that an activity done as an employee is *not* an enterprise. If you feel so strongly that you are correct, why don't you get onto the ATO and let them know that there are a stack of employees who should be registered for GST but are not? If what you are arguing were correct, what point could there be in having 9.20 (2) in the legislation?


the problem is you are carrying on an enterprise, it is not a hobby and I know you will argue that as well, so I will acknowledge your argument but believe in my own


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## UberDriverAU (Nov 4, 2015)

Sleepo said:


> the problem is you are carrying on an enterprise, it is not a hobby and I know you will argue that as well, so I will acknowledge your argument but believe in my own


My circumstances do not extrapolate to 100% of drivers:

(2) However, *enterprise *does not include an activity, or series of activities, done:

(a) by a person as an employee ... ; or

(b) as a private recreational pursuit or hobby; or

(c) by an individual ... or a partnership ... without a reasonable expectation of profit or gain; or

(d) as a member of a local governing body established by or under a State law or * Territory law ...
​Clearly there are circumstances where the requirement to register do not apply, because there are clear circumstances where by law an enterprise is by definition not being carried on.


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## Beepbeep41 (Apr 25, 2017)

I don’t see why Taxi or Uber drivers should have to pay GST if the earn under 75k, it ludicrous!! Taxi & Uber drivers are low paid workers, why make it worse for them?? Crazy!!


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## Who is John Galt? (Sep 28, 2016)

Beepbeep41 said:


> I don't see why Taxi or Uber drivers should have to pay GST if the earn under 75k, it ludicrous!! Taxi & Uber drivers are low paid workers, why make it worse for them?? Crazy!!


OK, Beep. OK !!

I believe you have mentioned this more than once, and it is obviously something which really sticks in your craw.

So, rather than let this feeling persist and the animosity and ill feeling fester and cause you any further anguish, I decided to do something about it.

You will be happy to know that I have just got off the 'phone after calling Chris Jordan AO, Commissioner of Taxation and Registrar of the Australian Business Register. And after having a good ol' yack, over several hours, which were very ably supported and helped along by the consumption of copious amounts of the very finest and most expensive bottles of South Australian premium red wines, paid for unknowingly and unwittingly by the very generous Australian taxpayers; I have been able to bring 'Jordy' around to your way of thinking.

As a result, and as from tomorrow, all taxi services, which obviously includes Über, will for tax purposes be treated exactly the same as any other business. So the threshold for GST reporting will be the same $75K.

Now, just a word of caution here. 'Jordy' is off his face. I mean, totally sheitfaced, so whether he remembers any of our conversation tomorrow is debatable. Nonetheless, and as you would expect, the entire conversation has been recorded and is currently being transcribed by the gorgeous, but highly volatile, Ricarda.

Fortunately, after 'Jordy' and I opened the fourth silky smooth bottle of Shiraz, he agreed to some vision in our communication, and there he is in all his glory sitting in nothing but a pair of jocks, a grin and Shiraz dribbling down his chin.

Ricarda is currently shopping this vision around to the major networks, and also NITV-SBS and Al Jazeera to provide some cultural balance to my reporting.

And so Beep, I believe with all the ATO whistleblower stuff going on at the moment, the Cranston/Walter White car wash money laundering through the ATO scandal, and all the other stories, which unfortunately, I have been gagged from reporting, I don't think the ATO will have the stomach for any additional dramas.

I think we are on a winner here and I expect your gracious and generous appreciation to flow through to my bank account commencing your next pay settlement.

.


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## tohunt4me (Nov 23, 2015)

UberDriverAU said:


> Opposite way around. You must be carrying on an enterprise before the requirement to register can apply. If that wasn't the case, then every employee would be required to register for GST where the business they worked for exceeded the $75K threshold. Section 9.20 (2)(a) is what states that an activity done as an employee is *not* an enterprise. If you feel so strongly that you are correct, why don't you get onto the ATO and let them know that there are a stack of employees who should be registered for GST but are not? If what you are arguing were correct, what point could there be in having 9.20 (2) in the legislation?


Shhhhh . . . !
Dont Give them Ideas !


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