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http://www.zdnet.com/article/ato-steers-gst-legal-case-away-from-uber/

ATO steers GST legal case away from Uber
The Australian Taxation Office (ATO) has disputed Uber's attempts to raise doubt around the "ordinary" definition of "taxi travel" as outlined by the Goods and Services Tax (GST), saying that the connotation of the phrase along with the words taxi and limousine need to be considered.

During the second hearing day at the Australian Federal Court, counsel representing the ATO said during his closing statement that Uber's argument that the definition of taxi travel under the GST Act is only applicable to taxis and limousines is not plausible.

He proposed for Justice John Griffiths to consider the connotations associated with the words taxi and limousine.

Pointing to the specific case of Sydney-based UberX driver Brian Fine as an example, counsel representing the ATO said Fine revealed during cross-examination that he would drive around -- much like a taxi would -- until someone wanted his service, before picking up a passenger, driving them to their destination, and charging a fare for the service.

"Like a taxi driver, [Mr Fine] pry the streets, and really effectively is hailed. We say functionally, he's hailed by users of the app," he said.

This goes against the argument that counsel representing Uber declared on Wednesday, which said the "real point of distinction" between UberX versus taxis and limousines is that taxis are the only vehicles that can pick up passengers from the curb side or be hailed.

Counsel representing the ATO further argued that regardless of whether taxi travel is provided by a taxi, limousine, or any form of other vehicle service, it does not mean that UberX is part of a different industry, and therefore its drivers should not be exempt from having to register for GST.

Blair Davies, Australian Taxi Industry Association CEO, told ZDNet that the case is addressing the "heart of the issue", which is creating a level playing field for taxi drivers in Australia.

"We're not running away from the fight. In fact, we are keen to take up the challenge and contest it in the marketplace based on everybody playing by the same rules, not by one side having an unfair advantage," he said.

"The case at the moment is the ATO is treating Uber drivers much like taxis, and we commend for that. We hope the court upholds that."

Uber lodged legal action against the Australian Taxation Office (ATO) back in August last year in the hope that the ATO would overturn its decision requiring Uber drivers to register for GST.

Last May, the ATO issued a directive that advised those providing a ridesharing service must have an Australian Business Number and be registered for GST.

However, in documents lodged to the Federal Court, Uber argued the public issue by the ATO "unfairly targets Uber driver-partners".

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

"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 to express its disappointment in the ATO, saying that 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 1990s 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.

On Monday, the NSW government announced that it is offering AU$20,000 in compensation grants to taxi drivers who have lost business due to Uber and other ridesharing services.

The AU$250 million industry transition package will allow the drivers to apply for upfront payments for up to two licences, AU$100 million of which will be paid for by a AU$1 levy on all taxi and ridesharing trips, meaning that NSW ridesharing and taxi users will have to collectively contribute AU$100 million to pay for the scheme. AU$142 million has also been set aside for hardship claims.

According to the Transport NSW website, eligible drivers' licences must include a condition that it may be transferred, and drivers have to have held their licence prior to July 1, 2016. Applications for the payments are currently open until January 13, 2017.

Uber was officially legalised in NSW by the state government in December last year, with a new regular and commissioner put in place to oversee the industry. A transition period was also put in place for a number of months for ridesharing drivers to obtain the correct accreditation to drive legally on NSW roads.

This was after the ACT became the first Australian state or territory to legalise ridesharinglast October. This included the same regulatory conditions that are enforced for taxi drivers, such as driver history checks and vehicle safety checks.

Uber was then deemed to be legal in Western Australia under major taxi industry reform in December, with the proviso that drivers had to obtain special "omnibus" licences in addition to their standard driving licences; while a decision passed by a Victorian County Court judge in favour of a Melbourne Uber driver effectively gave the service the green light to operate in Victoria in May.

While South Australia followed suit at the start of this month, Uber is still battling the Queensland government to become legal in that state. The Queensland government last month passed new legislation to crack down on Uber drivers, which included increased fines and more powers for traffic enforcement officers.

The Northern Territory government is still refusing to allow Uber to operate.
 

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In my view, Uber is correct that the ATO is unfairly targeting most Uber drivers. The ATO is not applying it's own interpretation of "taxi" consistently. For some hire car operators, they say that they're not a "taxi" because they are only available for private hire, but they say that all Uber operators are "taxis" even though they are also only available for private hire.
 

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UberX drivers do provide a service similar to taxis and hire cars. We do not provide a service similar to limousines only doing weddings and funerals.
 

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UberX drivers do provide a service similar to taxis and hire cars. We do not provide a service similar to limousines only doing weddings and funerals.
It's got nothing to do with the service provided, and everything to do with how hirings are made. Whether it's taxis, limousines, wedding hire cars, or UberX cars, everyone takes members of the public in their cars in exchange for fares/reward/cash/money/etc. Noone can dispute that.

The ATO's reasoning hinges on their view that Uber vehicles are available for public hire, but when you consider that:

(1) "available for public hire" means a random member of the public can approach you and ask to hire your vehicle, and you can approach them and ask if they want to hire you, ie. you can tout, ply for hire, and accept hails,

and

(2) "available for private hire" means your vehicle must be booked, with touting, plying for hire, and hails prohibited,

then it becomes clearer that Uber vehicles aren't a "taxi" within the ATO's chosen ordinary meaning for the word "taxi":

"a motor car for public hire, especially one fitted with a taximeter"

Basically, the ATO wants to have their cake, and eat it too. They declare that some operators are not taxis because they are only available for private hire, but declare that other operators who are also only available for private hire are taxis. You can't have it both ways.
 

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"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.

Like they do .... what taxes do Uber pay ???

The ATO has made special legislation for drivers, why don't they make special legislation to target 'rideshare' operators as well... probably because the ATO are happy to get million$ of GST $$ from drivers but if they targeted the company then Uber might pack up & leave.. which means ATO loses all the GST revenue they suck out of drivers atm...
 

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Am sure ATO is going to lose this case.
It's plain simple - Taxi is a mode transport which can be hailed, that is you show a hand and they would stop for you. That's why it is a public mode of transport
Whereas Private hire is where a car cannot just pick someone up. Unless they have a passenger who has prebooked a trip they cannot earn any trips. Hence it is a private but not a public transport.

Where the ATO has erred is to compare Uber to Taxis.
It should have been compared to Private Hire cars instead and applied all rules similar to them. Its just plain simple but in their efforts to placate the taxi industry they are creating a ruckus everywhere.
Plainly, ATO is going to lose all the way and Uber is going to have the last laugh
 

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I think a lot of people fail to realise hire cars and limousines all prebooked services must remit GST also from the first $1. Legislation dictates operators must have a prescribed amount of information about the clients and payment arrangement before making the trip.

Uber; download app, add payment details and enter verify code. Request Uber = This pax is a random stranger to the driver with a first name only which has been proved to be fake and unchecked. Nothing more than a digital hail.
 

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I think a lot of people fail to realise hire cars and limousines all prebooked services must remit GST also from the first $1. Legislation dictates operators must have a prescribed amount of information about the clients and payment arrangement before making the trip.
Many private hirings are caught because the criteria is "by taxi or limousine". That catches some private hirings, but not all of them.

Uber; download app, add payment details and enter verify code. Request Uber = This pax is a random stranger to the driver with a first name only which has been proved to be fake and unchecked. Nothing more than a digital hail.
There's nothing to stop anyone from booking under a fake name for any private hiring, unless ID is required.
 

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I think a lot of people fail to realise hire cars and limousines all prebooked services must remit GST also from the first $1. Legislation dictates operators must have a prescribed amount of information about the clients and payment arrangement before making the trip.

Uber; download app, add payment details and enter verify code. Request Uber = This pax is a random stranger to the driver with a first name only which has been proved to be fake and unchecked. Nothing more than a digital hail.
True but a lot people fail to realise that the gst legislation only apply to the taxi and limousine which was written I know how long ago . The main distinction between A taxi driver and an uber driver is that the taxi driver collect their fare directly from the pax nobody control them on how they run their business while an uber driver we are control by uber more like an employee or contractor . As an employee or contractor we don't need to registered gst if our turnover is below 75k . All uber Pax are payment by credit card or Paypal .all the pax detail are in the credit card and PayPal account
 

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"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.

Like they do .... what taxes do Uber pay ???

The ATO has made special legislation for drivers, why don't they make special legislation to target 'rideshare' operators as well... probably because the ATO are happy to get million$ of GST $$ from drivers but if they targeted the company then Uber might pack up & leave.. which means ATO loses all the GST revenue they suck out of drivers atm...
The corporations are the boss of the government that's why the ATO can't target uber
 

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True but a lot people fail to realise that the gst legislation only apply to the taxi and limousine which was written I know how long ago . The main distinction between A taxi driver and an uber driver is that the taxi driver collect their fare directly from the pax nobody control them on how they run their business while an uber driver we are control by uber more like an employee or contractor . As an employee or contractor we don't need to registered gst if our turnover is below 75k . All uber Pax are payment by credit card or Paypal .all the pax detail are in the credit card and PayPal account
No - technically Uber collects the fare on your behalf - for the app service and collection service you pay them a 25% commission. The real reason that you can only use your credit card in the Uber platform is that they don't trust you to give them 25% !
It is not a significant enough difference between Taxi and Uber from the ATO viewpoint - which is why this is a waste of time - the ATO will easily win - Uber lawyers really trying to split hairs.

Imagine one company gives you many various ways to pay your bill, and another only gives you one choice - which is the better customer service ?
 

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No - technically Uber collects the fare on your behalf - for the app service and collection service you pay them a 25% commission. The real reason that you can only use your credit card in the Uber platform is that they don't trust you to give them 25% !
It is not a significant enough difference between Taxi and Uber from the ATO viewpoint - which is why this is a waste of time - the ATO will easily win - Uber lawyers really trying to split hairs.
If the ATO's victory was as assured as you believe it is, then Uber's case would have been summarily dismissed. That clearly didn't happen.

Imagine one company gives you many various ways to pay your bill, and another only gives you one choice - which is the better customer service ?
I don't think I've ever had a pax ask if they could pay with cash rather than simply have funds charged to a card. People actually cite the convenience of hopping out immediately at the end of trip (at no extra cost) as a positive, compared with sticking their hand in their pocket and then getting slugged an outrageous 5%-10% surcharge for the "privilege" of using a card. People are sick of being ripped off like this.
 

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Discussion Starter · #16 ·
If the ATO's victory was as assured as you believe it is, then Uber's case would have been summarily dismissed. That clearly didn't happen.

I don't think I've ever had a pax ask if they could pay with cash rather than simply have funds charged to a card. People actually cite the convenience of hopping out immediately at the end of trip (at no extra cost) as a positive, compared with sticking their hand in their pocket and then getting slugged an outrageous 5%-10% surcharge for the "privilege" of using a card. People are sick of being ripped off like this.
Uber argues a meter is a fundamental ingredient to a taxi, but Uber has a meter too - just not displayed to pax during trip. Charging on a km and minute basis is what pushes me to think ATO will win.

In any case, I dont believe it will matter for us. Do you think Uber cares so much about you and wants to tuck you in at night without the hassle of accounting for GST?

No! It want to cut fares by 10% and tell drivers there's no real impact on your nett amount.

Wake up people.
 

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Uber argues a meter is a fundamental ingredient to a taxi, but Uber has a meter too - just not displayed to pax during trip. Charging on a km and minute basis is what pushes me to think ATO will win.
I don't think this will be a factor in the outcome. An Uber fare is not calculated or displayed in real-time, it is calculated after the trip has been completed. There is no taximeter in an Uber vehicle, unless it happens to also be a taxi.

In any case, I dont believe it will matter for us. Do you think Uber cares so much about you and wants to tuck you in at night without the hassle of accounting for GST?

No! It want to cut fares by 10% and tell drivers there's no real impact on your nett amount.

Wake up people.
It's entirely possible Uber will cut rates if they win, but it'd be one less thing for the vast majority of drivers to worry about. It's easy to see from these forums just how confusing drivers find dealing with GST.
 

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Discussion Starter · #18 ·
I don't think this will be a factor in the outcome. An Uber fare is not calculated or displayed in real-time, it is calculated after the trip has been completed. There is no taximeter in an Uber vehicle, unless it happens to also be a taxi.

It's entirely possible Uber will cut rates if they win, but it'd be one less thing for the vast majority of drivers to worry about. It's easy to see from these forums just how confusing drivers find dealing with GST.
Meter has been argued Uber, along with displaying a sign. Lo and behold there is a member of this forum flogging signs! I'll post another article below. If a person sees a car with an Uber logo in frontier them, and makes a request, the request should, according to the technology, go to that car. That is, in effect, a hail, with the booking a mere formality.

Confusion can be eliminated by learning the GST ropes or visiting an accountant.

http://www.afr.com/news/uber-argues-it-is-not-a-taxi-to-avoid-gst-20160719-gq9dna

After years of intense lobbying to get the privileges of the taxi industry, ride sharing app Uber has refused to be labelled a taxi in order to avoid GST.

If Uber loses, Uber passengers will have to start paying 10 per cent more for their rides as drivers will be required to collect GST.

The definition of "taxi service" was the central question that occupied much of the first day of the court hearing in the ride sharing app's legal fight against the Australian Tax Office over GST.

Uber sued the Tax Office on the eve of the GST deadline after the Tax Office said Uber drivers must pay GST regardless of how much they earn because they are providing a modern equivalent of taxi service from August 1, 2015.

Uber's argument is its drivers should not have to pay GST unless they earn more than $75,000 because they are not providing taxi services.

With the specific exception of taxi travel, there is a universal rule that businesses with less than $75,000 turnover do not need to collect GST.

Uber's lawyer, Tom Thawley, SC, told the court on Wednesday the tax law chose to target "two precisely identified industries" being the taxi and limousine industries.

He said Uber is not a taxi service for the purposes of the tax law, because taxis can pick up passengers without booking while Uber cannot.

"There's a sharp distinction that revolves around the rank and hail system. Taxis can share the pre-booked market but nobody else but a taxi can engage in rank and hail," Mr Thawley said.

According to Uber, other significant differences include the fact Uber does not run a taxi metre, taxis must have a label with a light on the roof
and taxis generally have an obligation to pick up all customers subject to limited exceptions.

Mr Thawley also said the Australian definition of taxi rather than the British version should be used because they have "come up with it by their own particular experiences".

Justice John Griffiths observed that in England there are minicabs which only operate in the pre-booked market.

"There is a curious creature in England called minicabs, which you can't hail or rank, you have to telephone," he said.

Uber used the example of driver Brian Fine to illustrate according to the Tax Office's guidance, he was due to pay GST on the $47,000 he earned in the 2015 financial year, even though he drove his private vehicle and he could not pick up an unbooked passenger through the rank and hail system.

'Uber is a brand'
In Uber's submission, economist Dr Peter Abelson said based on his analysis of industry reports, policy statements, regulatory and other documents, the term "taxi" is not used as a catch-all term that describes all point to point transport for a fare.

The Tax Office in its defence quoted a number of dictionary definitions to argue the term taxi should include ridesharing service such as Uber.

Macquarie dictionary editor Victoria Morgan told The Australian Financial Review she was unable to comment on the legal issues but from a linguistic point of view, the word "taxi" would be broad enough to capture ride sharing services such as Uber.

The dictionary defines taxi as a "car for public hire, especially one fitted with a taximeter".

"It's a car available for hire and it falls under that umbrella. Uber is a brand or a company - people know when they call an Uber, they're calling a car or a truck," she said.

"It's the same as Silver Service and Premier," she said, referring to the taxi company names.

However, the dictionary definition would not capture the legal requirements of a taxi, the same way the dictionary definition of the word "electrician" would not describe the qualifications required to do the job.

Uber is seeking a court declaration to say ATO's guidance on GST for Uber drivers is incorrect.

The hearing comes a day after a report commissioned by Uber found the $1 levy on every Uber ride to compensate taxi licence holders was unjustified.

The hearing before Justice John Griffiths is expected to continue for the next two days.
 

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Yes, Uber is challenging because of implications for itself not drivers ...
as explained to me, ..
if GST is applicable by ATo, then Uber has broken its contract with drivers:
Example is $110 fare .... Uber takes $22 .... then driver needs to remit max $10 GST (less GST deductables) to ATO
BUT GST Tax component is NOT part of the fare ..it is a TAX that is added by tax law and, as such, is not an entitlement (in entirety or part) to other parties such as contractors. That is, the $10 is protected from any negotiations or tradings between parties...it belongs to the Government via ATO and is only collected by temporary custodians providing good or a service.
So, Uber taking $22 from the $100 non-tax component is NOT 20% 'commission' but rather 22% ... this is contrary to contract with drivers and $2 should be either refunded to the driver (if they remitted the full 10%GST), or forwarded as Uber's GSt component to ATO, and subsequently refunded back to the driver as overpayment of the driver's GST component (max $8).

that then leads on to the next consideration that equally erks Uber... the GST deductables against GST liability ...
at the moment the driver is (wrongly) forwarding potentially the full 10% GST less any GST costs paid. Typically, the driver will list consumable items that had GSt like fuel, tolls, etc. to calculate a net GST to be paid, but what is mssing from the list is all of Uber's expenditure that had GST costs because the driver is unaware of these. Those would be deducted if Uber paid the GST debt of course. End result is that again the driver is overpaying the net GST due, because not all the true GST costs have been deducted for each ride. Uber's GST costs on their expenditure have not been offset at all on any ride GST payments... and that's the accounting hole that ATO also wants to address in these proceedings.

Understand that, in the bigger picture, ATO believes Uber is avoiding its full tax liabilities within Australia by undervaluing it's turnover .... it is hoping that forcing the GST issue, especially with regard to deductables will provide further evidence to clarify Uber's true turnover, expenditure and profits ... this is just one of its cannon balls.....but ATO is finding its arsenal has not put much of a ***** in the Uber armour....maybe some cracks are showing now...


dont believe for one moment this has anything to do with protecting the driver by either Uber or the ATO.... we are mere pawns, possibly prawns ...
 

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You guys need to be in court. You know stuff that even the participants don't know.
 
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