# Fringe benefits tax concessions for taxis extended to rideshare



## Jack Malarkey (Jan 11, 2016)

ABC Australia

https://www.abc.net.au/news/2020-06...can-finally-get-tax-breaks-rideshare/12363812
Extracts:

*Employers using Uber for staff can get tax breaks...*

By business reporter Nassim Khadem

Wednesday 17 June 2020

If a ride-sharing service such as Uber is just like a taxi when it comes to paying goods and services tax (GST), then it's just like a taxi when it comes to getting generous tax breaks.

*Key points:*

Several tax changes have passed Federal Parliament including one that gives employers using ridesharing services like Uber tax breaks

The change is a relief for many as it avoids employers being hit with big tax bills dating back several years

...

Employers across Australia who have been letting their staff use ride-sharing services, rather than a licensed taxi, will now be able to get tax benefits under new laws that passed Federal Parliament this morning.
...

Previously the Australian Taxation Office (ATO) had said while ride-sharing drivers have to register for and pay GST like the taxi industry does, ride-sharing is not a "taxi" for the purposes of fringe benefits tax (FBT) exemptions.

It meant that companies that had relied on services such as Uber, rather than licensed taxis, could have been hit with big tax bills dating back several years.

But after years of industry consultation, and lobbying from companies like Uber, on Wednesday Parliament passed an amendment to the Fringe Benefits Tax Assessment Act 1986 that changes the rules.

In the end, all it required was a simple change to the definition of "taxi".

The new law replaces references to a "taxi" with "a motor vehicle used for taxi travel (other than a limousine)".

*Employers urged to amend tax returns*

Uber for Business country manager, Australia and New Zealand, Georgia Foster, welcomed the law change.

"The Federal Government has taken an important step to enable more Australian businesses to reduce costs and provide a more reliable and convenient transport option for their employees," she said.

Thousands of Australian companies already choose Uber for Business as their corporate transportation partner &#8230; and more are turning to the Uber platform as employees look to return to work."

"Employees too will be able to claim transport costs from their employers, confident in the knowledge that their company won't be liable for a fringe benefits tax as a result."

Ms Foster said when the FBT exemption for taxi travel was originally introduced in 1995, ride-sharing did not exist in Australia.

"At that time, taxis were often the only transport option available to a number of employers," she said.

"There are 3.8 million Australians who actively use the Uber app to get from A to B, supported by more than 74,000 driver partners."

RSM Australia associate director Tracey Dunn said the change to the definition of taxi under the FBT Act has been long-awaited.

Ms Dunn encouraged employers who had incurred basic "taxi" travel expenses for employees in the 2020 FBT year to review and lodge an amendment to their return.

She said this included cases where the employee has used a taxi or rideshare service to travel to home or to obtain medical treatment due to sickness or injury.
...

[end of article extracts]

*Jack Malarkey comments:*

Good news.

These cases apply to cases such as where the employee has used a taxi or rideshare service to travel to home, or to obtain medical treatment, due to sickness or injury. Another example is where an employer pays for a taxi or rideshare service for the employee to travel to home after working overtime.

Fringe benefits tax (FBT) is a tax imposed on employers for non-salary benefits provided to employees. Frequently, employers recover the FBT liability from their employees.

FBT is imposed at the top rate of tax despite the actual income of the employee receiving the benefit.

Confusion about the precise circumstances in which FBT is payable for rideshare trips has meant that some employers have chosen to use taxis rather than rideshare services.


----------



## Jack Malarkey (Jan 11, 2016)

The new law replaces references to a 'taxi' with 'a motor vehicle used for taxi travel (other than a limousine)'.

it's not apparent why they quite deliberately excluded travel by limousine. This does seem unfair to limousine drivers and may raise issues about whether or not a particular vehicle is a limousine.

In a great many cases, the rider won't know the precise type of vehicle being sent until after the driver accepts the ride request made via an app.

My own representations to Treasurer Frydenberg (made in July 2019) did NOT seek an exclusion for limousines:


----------



## Uberguyken (May 10, 2020)

Didn't save me or make.me money... Therefore it's not newsworthy... Move along now....


----------



## Jack Malarkey (Jan 11, 2016)

The amendments apply to eligible trips made from 1 April 2019.


----------



## Jack Malarkey (Jan 11, 2016)

From the Australian Taxation Office's Small Business Newsroom:

https://www.ato.gov.au/Newsroom/sma...FBT-taxi-exemption-extended-to-ride-sourcing/

*FBT taxi exemption extended to ride-sourcing*








*14 July 2020*
The fringe benefits tax (FBT) taxi travel exemption now includes travel in ride-sourcing vehicles.
This means you'll be eligible for the exemption for travel provided to your employees in a single trip to or from the workplace:
on or after 1 April 2019
in a licenced taxi or or other vehicle (other than a limousine) involving the transport of passengers for a fare - such as a ride-sourcing vehicle.

Remember, you may also be eligible for the FBT taxi travel exemption where the travel is in relation to the sickness or injury of an employee.
As the changes apply from 1 April 2019, we've updated the 2020 FBT return instructions if you need to amend your FBT return.
*Next steps:*
Correct a mistake or amend a return - Fringe benefits tax returns
2020 FBT return instructions

*Find out about:*
Taxi travel expenses exemption


----------



## Westside Rider (Apr 12, 2020)

@Jack Malarkey does this include rideshare other than Uber?


----------



## Jack Malarkey (Jan 11, 2016)

Westside Rider said:


> @Jack Malarkey does this include rideshare other than Uber?


Yes, it does.


----------

