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  • Ride-sourcing drivers – What you need to know

    Ride-sourcing is the term given to transporting passengers for a fare through the sharing economy. If you have a ride-sourcing enterprise, fares you receive are subject to goods and services tax (GST). Money received from ride-sourcing is also subject to income tax.

    Before registering to drive and signing up with a facilitator make sure you are aware of your tax obligations.

    On this page:

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    What you need to do

    Register

    If you have an enterprise of ride-sourcing, you must:

    • get an Australian business number (ABN) using the following details
      • type ‘taxi ride sourcing’ as your business description
      • select 'taxi driver (except owner/operator)' or 'taxi cab service'
       
    • choose to report your GST payments monthly or quarterly (you can't choose annually)
    • register for GST from the date you started ride-sourcing (you can do this when you get your ABN).

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    Keep records

    There are a number of records you need to keep:

    • statements showing income from ride-sourcing
    • receipts of any expenses you want to claim deductions for
    • a logbook to track your trips (only claim the business portion).

    Lodging

    You must declare income from your ride-sourcing activities on your tax returns and lodge by the due date.

    You are required to lodge business activity statements (BAS) and pay any GST by the due date.

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    Tips for ride-sourcing drivers

    Calculate GST on the full fare

    GST must be calculated on the full fare, not the net amount you receive after deducting any fees or commissions.

    If a passenger pays $55 for a fare:

    • the GST payable is $5
    • the ride-sourcing facilitator pays you $44 after taking out their commission ($11)
    • the $11 fee you pay the facilitator is a tax deduction you can claim.

    Keep records

    The easiest way to keep track of your deductions is by using the ATO app. Take a photo of receipts and log it in the app, then download it into myTax or send a report to your registered tax or BAS agent.

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    Keep a logbook

    You can use our app’s Add trip function as your logbook to keep your records. Use your GPS or odometer to calculate the distance travelled while you’re driving your passenger to their destination to accurately record your car trips.

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    Calculate GST credits on business purchases

    GST credits on your business purchases can be claimed, but you must work out the percentage that is business use (and not private use) and only claim this amount.

    If you use your car 20% for ride-sourcing and 80% for private purposes, and:

    • you buy a new car to use for ride-sourcing activities for $33,000 (including $3,000 GST) – you can claim 20% of the GST or $600 ($3,000 × 20%) you pay $110 for fuel (including $10 GST) – you can claim 20% of the GST or $2 ($10 × 20%)
    • you pay $220 for a service (including $20 GST) – you can claim 20% of the GST or $4 ($20 × 20%).

    There are other business purchases you may be able to claim a portion of GST credits for, but you should keep records.

    Issue tax invoices

    If a passenger requests a tax invoice (that is, an invoice that includes the amount of GST) for a fare over $82.50 including GST, you must provide one. If the facilitator you are going through:

    • can’t do this on your behalf, use a tax invoice book with your ABN on it – the tax invoice must contain certain details
    • does issue tax invoices on your behalf – find out the process before a passenger asks for a tax invoice.

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    Carrying on an enterprise

    If you provide ride-sourcing services to the public you are likely to be carrying on an enterprise.

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    Data matching

    We obtain data from all ride-sourcing facilitators operating in Australia and their financial institutions to identify ride-sourcing drivers. This information allows us to help drivers understand their tax obligations, including registration, lodgment, reporting and payment obligations.

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    Last modified: 14 Nov 2018QC 52956