# Private ruling request from ATO re GST treatment of Uber appreciation awards (bonuses)



## Jack Malarkey (Jan 11, 2016)

I have just made an application to the Australian Taxation Office for a private ruling on whether or not Uber’s appreciation awards (bonuses) are subject to GST.

I will report back here when I receive a reply.


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## UberDriverAU (Nov 4, 2015)

It's been a while since I've had a look at this type of thing, but would this be the type of situation that warrants a public ruling given the potential number of drivers involved? ?

My guess would be that they're GST free as there's insufficient connection between the individual supplies made and the bonus payment made. They'll definitely be subject to Income Tax.

This may offer some (non- binding) insight as to how the ATO will view these payments:

https://community.ato.gov.au/t5/Gen...-as-income-and-subject-to-GST-when/td-p/12654


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## Jack Malarkey (Jan 11, 2016)

UberDriverAU said:


> It's been a while since I've had a look at this type of thing, but would this be the type of situation that warrants a public ruling given the potential number of drivers involved? ?
> 
> My guess would be that they're GST free as there's insufficient connection between the individual supplies made and the bonus payment made. They'll definitely be subject to Income Tax.
> 
> ...


@UberDriverAU, many thanks.

Earlier today, I made the following observation in the Brisbane forum:

'I have seen some evidence that relatively inexperienced Tax Office staff are answering these enquiries (including from tax agents) and they are not taking sufficient care in analysing the question and applicable law.

'They seem to be simply looking at their ride-sourcing guidelines (https://www.ato.gov.au/General/Ride-sourcing-and-tax/) and reaching conclusions based on the discussion of amounts paid by a foreign entity that are not part of a specific fare and without giving sufficient weight to the fact that the payments are now made by an Australian entity.

'What I'd like to see is a public or private ruling or other statement in writing where the answer has been subject to proper escalation processes within the Tax Office'.

(https://uberpeople.net/threads/one-off-uber-payment.323616/page-3)

[end of quote]

I agree that a public ruling would be appropriate. Yet the Tax Office's internal procedures for public rulings are so labyrinthine that any public ruling would be expected to issue many months after the due date for the next BAS.

In the absence of a public ruling, some other form of public announcement would be highly desirable.


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## Jack Malarkey (Jan 11, 2016)

For the record, here’s the text of my private ruling request:

REQUEST FOR PRIVATE RULING 

1. I hereby apply for a private ruling relating to the GST treatment of an ‘appreciation award’ (bonus) received as a rideshare driver on the Uber platform.

2. My appreciation award was for $700. To be eligible, I ‘completed a minimum of 5,000 trips/deliveries as of 2019-04-07, and taken at least one trip between 2019-01-01 and 2019-04-07’. Other drivers have received awards of nil, $140, $1,400, and $14,040 depending on the number of rides or deliveries completed.

3. I understand that the award payment was made by an Australian entity (Uber Pacific). The payment did not relate to a specific fare or trip.

4. Please advise whether or not this award is subject to GST.

Jack MALARKEY


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## UberDriverAU (Nov 4, 2015)

For GST to become liable, a supply must have been made for consideration. This is different from the typical bonus where Uber notifies in advance that they will pay $X for completing Y trips between certain hours. In that case it is fair to say that a service has been made _for_ consideration. In this case though, any services that have been supplied have occurred prior to any consideration, so can it be said that such supplies have been made _for_ consideration? That seems dubious to me. ?


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## Jack Malarkey (Jan 11, 2016)

UberDriverAU said:


> For GST to become liable, a supply must have been made for consideration. This is different from the typical bonus where Uber notifies in advance that they will pay $X for completing Y trips between certain hours. In that case it is fair to say that a service has been made _for_ consideration. In this case though, any services that have been supplied have occurred prior to any consideration, so can it be said that such supplies have been made _for_ consideration? That seems dubious to me. ?


Thanks, @UberDriverAU. You have brought out a fact that's definitely relevant but which I didn't allude to in my private ruling request.

I therefore propose in the next day or so to send a follow-up letter to the Tax Office bringing out this matter and asking them to incorporate it into my private ruling request.

I'll share the text of my follow-up communication here.


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## Jack Malarkey (Jan 11, 2016)

I have now submitted to the Tax Office the additional information given by @UberDriverAU above.

Here's the text of my additional communication:

ADDITIONAL INFORMATION FOR INCORPORATION INTO PRIVATE RULING REQUEST

1. I refer to my private ruling request of 1 May 2019 (copy attached) relating to the GST treatment of an 'appreciation award' (bonus) received from Uber.

2. Would you please treat the information in the following paragraphs as part of that ruling request:

3A. These driver bonuses differ from the typical bonus where Uber notifies in advance that they will pay a specified bonus for completing a specific number of trips between certain hours.

3B. In contrast, these appreciation awards came to the attention of drivers only some time after becoming eligible. The news came as a complete surprise to drivers, albeit a welcome surprise.

3C. The awards were gratuitous (a gift) in that Uber was under no contractual or other legal obligation to make them.

3. If you need more information, you are welcome to contact me by whatever means you consider appropriate.

Jack MALARKEY


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## RoboRider (Aug 26, 2018)

Interesting that Uber haven't given me a Recipient Created Tax Invoice for the Appreciation Payment yet even though they paid me on Monday .. maybe this is an indication they aren't seeing it as a GST supply but I guess we will have to wait and see what the ATO says. @Jack Malarkey how long does it usually take for them to reply to a request like this?


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## Jack Malarkey (Jan 11, 2016)

RoboRider said:


> @Jack Malarkey how long does it usually take for them [ATO] to reply to a request like this?


About one month.


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## Jack Malarkey (Jan 11, 2016)

Today (Friday 17 May 2019), I received an emailed response from the Australian Taxation Office advising that the Uber appreciation awards are NOT subject to GST.

Here's the text of the reply:

Hello Jack

We recently received your request for a private ruling relating to Uber appreciation rewards.

The reward amount received by drivers is not consideration for a taxable supply made by the driver and therefore there are no GST implications.

While not my area of expertise, I understand that for income tax purposes, payments will fall into the category of 'voluntary payments' and are assessable as ordinary income under section 6-5.

Hopefully this answers your question.

If so, can you reply to me by email requesting your private ruling application be withdrawn.

Regards

Laurie Robinson
Senior Technical Adviser 
GTPL | Small Business
Australian Taxation Office
P 07 3213 5688

[end of response]

I have now withdrawn my private ruling request in accordance with the last paragraph of the response.

I consider that all drivers can now safely conclude that these appreciation awards are NOT subject to GST and can simply omit them from sales in their next business activity statement (BAS).


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## Silk Singh (Apr 29, 2018)

Well done Jack.

Now only if the ATO left us alone with the GST on this F*cken 23.2cents a minute Uber pass on from the passengers.


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## DannyM (Jul 31, 2016)

Jack Malarkey said:


> Today (Friday 17 May 2019), I received an emailed response from the Australian Taxation Office advising that the Uber appreciation awards are NOT subject to GST.
> 
> Here's the text of the reply:
> 
> ...


UBER promotion for taking more rides and driver's referral to my understanding should be GST exempt but taxable at the gross amount. Unlike tips where GST applies as clearly shown by Uber on their invoices since this basically form part of the passenger fare.

So the bonus that Uber gave us recently is clearly not subject to GST but should be included in our gross income. J


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## Spursman (Dec 8, 2016)

Jack Malarkey said:


> Today (Friday 17 May 2019), I received an emailed response from the Australian Taxation Office advising that the Uber appreciation awards are NOT subject to GST.
> 
> Here's the text of the reply:
> 
> ...


Thanks, Jack. Great work.


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## RoboRider (Aug 26, 2018)

DannyM said:


> UBER promotion for taking more rides and driver's referral to my understanding should be GST exempt but taxable at the gross amount. Unlike tips where GST applies as clearly shown by Uber on their invoices since this basically form part of the passenger fare.
> 
> So the bonus that Uber gave us recently is clearly not subject to GST but should be included in our gross income. J


Promotions for recruiting drivers or completing trips are payments for services so they attract GST. The"appreciation payment" is different which is why the ATO have said it doesn'tattract GST


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## Jack Malarkey (Jan 11, 2016)

RoboRider said:


> Promotions for recruiting drivers or completing trips are payments for services so they attract GST. The"appreciation payment" is different which is why the ATO have said it doesn'tattract GST


Agreed. The promotions for recruiting drivers or completing trips have been subject to GST from the date they have been paid by an Australian entity (ie, from 1 December 2017).


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## DannyM (Jul 31, 2016)

Jack Malarkey said:


> Agreed. The promotions for recruiting drivers or completing trips have been subject to GST from the date they have been paid by an Australian entity (ie, from 1 December 2017).


Did you get an invoice from Uber to determine whether it was paid by Uber Australia or Uber foreign. I have not seen any invoice yet for driver's referral, Uber promo and appreciation bonus and are shown only as other in the monthly Uber statements.

GST only applies if they are passenger related as per passenger invoice from the over app.

Unless there are current ATO ruling on this matter, I will not pay GST.


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## Jack Malarkey (Jan 11, 2016)

DannyM said:


> Did you get an invoice from Uber to determine whether it was paid by Uber Australia or Uber foreign. I have not seen any invoice yet for driver's referral, Uber promo and appreciation bonus and are shown only as other in the monthly Uber statements.
> 
> GST only applies if they are passenger related as per passenger invoice from the over app.
> 
> Unless there are current ATO ruling on this matter, I will not pay GST.


I am unaware of relevant invoices.

In the second half of 2017, Uber advised drivers by email that payments to them would be made by an Australian entity from 1 December 2017.

It would be surprising if bonuses for trips completed or for signing up new drivers came from a foreign entity while fare amounts came from an Australian entity.

This conclusion is reinforced by the fact that drivers receive a single amount each time in their bank account rather than two or more amounts.

I have been paying GST on those kinds of bonus paid from 1 December 2017 onwards.


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## DannyM (Jul 31, 2016)

Jack Malarkey said:


> I am unaware of relevant invoices.
> 
> In the second half of 2017, Uber advised drivers by email that payments to them would be made by an Australian entity from 1 December 2017.
> 
> ...


Following your logic of having not having. sighted any invoices for referral bonuses and Uber promotions, how is the appreciation bonus we got recently received make it any different from those bonuses. I will stick to what I am doing excluding GST on these items for the very simple reason that Gst that I charge the passenger generated in the Uber app are all accounted for.



RoboRider said:


> Promotions for recruiting drivers or completing trips are payments for services so they attract GST. The"appreciation payment" is different which is why the ATO have said it doesn'tattract GST
> [/QUOTE
> 
> Where do we get this invoices and I bet you your answer is I do not know. If this fall under Australian GST law, you as a driver should issue a Tax Invoice to Uber with GST and Uber as the paying entity should claim the tax credits accordingly.


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## Jack Malarkey (Jan 11, 2016)

DannyM said:


> Following your logic of having not having. sighted any invoices for referral bonuses and Uber promotions, how is the appreciation bonus we got recently received make it any different from those bonuses. I will stick to what I am doing excluding GST on these items for the very simple reason that Gst that I charge the passenger generated in the Uber app are all accounted for.


The relevant part of the Australian Taxation Office guidelines for ride-sourcing is as follows:

*Bonus or top-up payments*

GST is a tax on consumption in Australia only. If you receive a bonus or top-up payment from an overseas facilitator the service you are providing is not consumed in Australia and is GST-free.

GST-free services may include:

marketing and promoting the facilitator to potential customers for which you may receive bonus payment from the facilitator, for example when a new customer quotes your reference code or other identifier
operating during certain times, such as peak hours for which you receive a top-up payment from the facilitator - the top-up payment is not part of the fare and is in addition to the fare paid by the passenger.

[end of extract]

(https://www.ato.gov.au/general/ride-sourcing-and-tax/)

It seems clear that the relevant bonus is not subject to GST only if the payment is from a foreign entity so that the service provided is not consumed in Australia.

The position changes if the payment is made by an Australian entity so that the services are consumed in Australia.

The appreciation awards are different as the driver did not provide services with a view to obtaining them.


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## RoboRider (Aug 26, 2018)

DannyM said:


> Following your logic of having not having. sighted any invoices for referral bonuses and Uber promotions, how is the appreciation bonus we got recently received make it any different from those bonuses. I will stick to what I am doing excluding GST on these items for the very simple reason that Gst that I charge the passenger generated in the Uber app are all accounted for.


They issue these invoices as recipient created tax invoices. They appear in the partner invoices tab of your online account page. You can stick your head in the sand all you like but one day the ATO will come knocking ...


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## DannyM (Jul 31, 2016)

Really


RoboRider said:


> They issue these invoices as recipient created tax invoices. They appear in the partner invoices tab of your online account page. You can stick your head in the sand all you like but one day the ATO will come knocking ...
> [/QUOTE
> 
> Really. Screen shot please of Uber invoice for appreciation bonus.


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## UberDriverAU (Nov 4, 2015)

RoboRider said:


> They issue these invoices as recipient created tax invoices.


Those aren't recipent created invoices. They're issued in Uber's name and on their own behalf, i.e. they're stock standard supplier issued invoices.


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## RoboRider (Aug 26, 2018)

UberDriverAU said:


> Those aren't recipent created invoices. They're issued in Uber's name and on their own behalf, i.e. they're stock standard supplier issued invoices.


No I am talking about invoices for incentives.



DannyM said:


> Really. Screen shot please of Uber invoice for appreciation bonus.


They didn't issue an invoice for the appreciation bonus as it wasn't a payment for a service. For other incentive payments , if you look at your Partner Invoices page the Service will be called "Incentives" rather than "Intermediary", and the invoice looks like this. It was a $200 payment for driver referral - Uber stuffed the GST up and added it on top of the payment rather than making it part of the $200


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## UberDriverAU (Nov 4, 2015)

RoboRider said:


> No I am talking about invoices for incentives.
> 
> They didn't issue an invoice for the appreciation bonus as it wasn't a payment for a service. For other incentive payments , if you look at your Partner Invoices page the Service will be called "Incentives" rather than "Intermediary", and the invoice looks like this. It was a $200 payment for driver referral - Uber stuffed the GST up and added it on top of the payment rather than making it part of the $200
> 
> View attachment 322299


That's Uber playing funny buggers really. When did you actually ever agree that they could create RCTIs? Reading what they've put on the purported "RCTI" your non-action constitutes acceptance of an agreement.


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## UberDriverAU (Nov 4, 2015)

Jack Malarkey said:


> I have now withdrawn my private ruling request in accordance with the last paragraph of the response.


I wish you hadn't have Jack. Not even you can completely rely upon the advice given as it is non-binding.


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## Jack Malarkey (Jan 11, 2016)

UberDriverAU said:


> I wish you hadn't have Jack. Not even you can completely rely upon the advice given as it is non-binding.


Thanks, @UberDriverAU.

I'm not sure why they wanted me to do that but I decided to accede to their request.

I concluded in this specific context that the prospect the Tax Office would resile from the position stated in the reply was negligible and even close to non-existent.

Insisting on a private ruling would have caused further delay and it would have had a result that only I in any event could treat it as legally binding. I was keen to have something that would in a practical sense benefit drivers generally at the earliest opportunity even if it put me in the same legal position as other drivers.

Also influencing me was that the Tax Office staff member concerned is very experienced and has an excellent reputation for his knowledge of tax law and Tax Office administrative practice.

Finally, I was influenced by the fact that the Tax Office view expressed was wholly consistent with your own views on GST, which I greatly respect.


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## RoboRider (Aug 26, 2018)

RoboRider said:


> No I am talking about invoices for incentives.
> 
> They didn't issue an invoice for the appreciation bonus as it wasn't a payment for a service. For other incentive payments , if you look at your Partner Invoices page the Service will be called "Incentives" rather than "Intermediary", and the invoice looks like this. It was a $200 payment for driver referral - Uber stuffed the GST up and added it on top of the payment rather than making it part of the $200


I had to delete the original attachment as something went wrong with it. Here it is again












UberDriverAU said:


> That's Uber playing funny buggers really. When did you actually ever agree that they could create RCTIs? Reading what they've put on the purported "RCTI" your non-action constitutes acceptance of an agreement.


I agree. There is no mention of this RCTI process in the services agreement but,as you noted, if I didn't agree with it I should have raised an objection with them within 21 days. I also can't find the clause 4.9 of the Driver Services Agreement that the invoice refers to ...


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## Vegeta09 (Feb 11, 2019)

What I don't understand, is why the ATO are so obsessed with uber?

No workers are under as much scrutiny, as what uber drivers are.

Anyone who doesn't pay the GST, on say an $80 top up bonus, expect the ATO to send their SWAT team to pay you a visit, asking you for the GST on that bonus.


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## DannyM (Jul 31, 2016)

RoboRider said:


> I had to delete the original attachment as something went wrong with it. Here it is again
> 
> View attachment 322546
> 
> ...


Have you actually seen an invoice for Uber top up bonus? If so can you please send me a screen shot if you don't mind.


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## RoboRider (Aug 26, 2018)

I have one this week so will post when I get it


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