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ATO Interpretative Decision

ATO ID 2001/700

Goods and Services Tax

GST and supply of taxi travel
FOI status: may be released

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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, an employee, required to be registered for goods and services tax (GST) under section 144-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it drives for the owner of a taxi licence?

Decision

No, the entity, an employee, is not required to be registered for GST under section 144-5 of the GST Act when it drives for the owner of a taxi licence.

Facts

The entity is a bona fide employee. An owner of a taxi licence employs the entity. The entity is paid an hourly rate that is independent of the actual takings.

Reasons for Decision

Division 144 of the GST Act contains a special registration rule for suppliers of taxi travel and provides that they are required to be registered regardless of their annual turnover.

Under section 144-5 of the GST Act, an entity is required to be registered if, in carrying on an enterprise, it supplies taxi travel. It does not matter whether its annual turnover meets the registration turnover threshold or in carrying on an enterprise, it makes other supplies besides supplies of taxi travel.

However, under paragraph 9-20(2)(a) of the GST Act, an enterprise does not include activities done by a person as an employee. Accordingly, the entity, as the employee of the owner of a taxi licence, is not carrying on an enterprise for GST purposes, and therefore, is not required to be registered for GST under section 144-5 of the GST Act.

[Note: In this case, the employer, as owner of the taxi licence is carrying on an enterprise of providing the taxi travel and is required to be registered for GST in accordance with Division 144 of the GST Act. Where a driver operates under a bailment arrangement with the owner of the taxi licence, they are not considered to be an employee. In these circumstances, the taxi driver is required to be registered under Division 144 of the GST Act.]

Date of decision:  18 July 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   paragraph 9-20(2)(a)
   Division 144
   section 144-5

Other References:
Taxi Industry Partnership Issues Register

Keywords
Goods and services tax
Taxi industry

Business Line:  GST

Date of publication:  30 November 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 18 July 2001 Original statement
  15 June 2007 Archived

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