GST issues registers

Taxi Industry

Compliance

Updated	Issue	ATO decision
27/10/03	What happened to PPS and provisional taxpayers? Non-interpretative - straight application of the law.	The PAYG system replaced the Prescribed Payments System (PPS) and Provisional Tax system. Depending on your circumstances, you are either subject to withholding or PAYG instalments. You use a single form, called an activity statement, to report and pay PAYG instalments and withholding amounts. For further information on your obligations under the PAYG system, refer to: • Introduction to pay as you go (PAYG) instalments • PAYG withholding (NAT 8075). These products are available on our website or by phoning us on 1300 720 092.
01/07/06	Is the 'no ABN withholding' tax necessary when all drivers are required to be registered? Non-interpretative - straight application of the law.	Quoting an ABN on an invoice or some other document relating to the supply, also means that when you supply goods, services or anything else to another enterprise, they do not have to withhold tax (at 46.5%) from their payment to you. For taxi drivers, the supply to another business typically takes place when a passenger is undertaking a journey that is a creditable acquisition for the passenger's enterprise (that is, a business trip). One of the purposes of the ABN is to allow businesses to access basic identification information about other businesses that they are dealing with. This is essential to maintaining the integrity of the GST system. The business passenger needs to know that their claim for an input tax credit in respect of the GST paid on the fare for the business trip will not fail because the driver was required to be registered but wasn't. If this proves to be the case, and the driver cannot quote his or her ABN in relation to a supply of taxi travel that they make, the business passenger (or passenger that is carrying on an enterprise), is required to withhold 46.5% of the payment to the driver under the 'No ABN Withholding' provision.
01/07/06	What does the ATO do about dishonest operators? Non-interpretative - straight application of the law.	We commit significant resources to ensure all businesses, including taxi drivers, comply with their GST obligations. GST is a tax on goods and services that is borne by consumers. To achieve this, the GST law lets businesses claim input tax credits for the GST included in the price paid for business purchases. These are called input tax credits. An unregistered taxi driver is not only in breach of the GST law but is also at a disadvantage because he or she is not able to claim an input tax credit for the GST included in the price paid on these expenses. Normally a tax invoice will only be requested by a passenger when the trip is a business expense (creditable acquisition) to the passenger. In addition, a driver is subject to 'No ABN withholding' where the driver cannot quote an ABN in relation to a supply of taxi travel made to a passenger who is carrying on an enterprise. Accordingly, the business passenger (or passenger who is carrying on an enterprise) is required to withhold 46.5% of the metered fare and forward this amount to us. The Commissioner also has the power to register any business that does not apply if he is satisfied that the business should have been registered. The Commissioner can backdate registration in these cases. If this happens, it means that the Commissioner seeks to recover 1/11th of any fares from the deemed registration date. Any business that is liable to remit GST and fails to do so is subject to penalties. Members of the public, including other taxi drivers and operators, can call us to report instances of tax evasion to the Tax Evasion Referral Centre (TERC) by either: • reporting online using this secure Tax evasion reporting form • phoning 1800 060 062 • sending a fax to 1800 804 544 • writing to Australian Taxation Office Locked Bag 6050 Dandenong Victoria 3175.

Updated

Issue

ATO decision

27/10/03

What happened to PPS and provisional taxpayers?

Non-interpretative - straight application of the law.

The PAYG system replaced the Prescribed Payments System (PPS) and Provisional Tax system. Depending on your circumstances, you are either subject to withholding or PAYG instalments. You use a single form, called an activity statement, to report and pay PAYG instalments and withholding amounts. For further information on your obligations under the PAYG system, refer to:

•: Introduction to pay as you go (PAYG) instalments
•: PAYG withholding (NAT 8075).

These products are available on our website or by phoning us on 1300 720 092.

01/07/06

Is the 'no ABN withholding' tax necessary when all drivers are required to be registered?

Non-interpretative - straight application of the law.

Quoting an ABN on an invoice or some other document relating to the supply, also means that when you supply goods, services or anything else to another enterprise, they do not have to withhold tax (at 46.5%) from their payment to you. For taxi drivers, the supply to another business typically takes place when a passenger is undertaking a journey that is a creditable acquisition for the passenger's enterprise (that is, a business trip). One of the purposes of the ABN is to allow businesses to access basic identification information about other businesses that they are dealing with. This is essential to maintaining the integrity of the GST system.

The business passenger needs to know that their claim for an input tax credit in respect of the GST paid on the fare for the business trip will not fail because the driver was required to be registered but wasn't. If this proves to be the case, and the driver cannot quote his or her ABN in relation to a supply of taxi travel that they make, the business passenger (or passenger that is carrying on an enterprise), is required to withhold 46.5% of the payment to the driver under the 'No ABN Withholding' provision.

01/07/06

What does the ATO do about dishonest operators?

Non-interpretative - straight application of the law.

We commit significant resources to ensure all businesses, including taxi drivers, comply with their GST obligations. GST is a tax on goods and services that is borne by consumers. To achieve this, the GST law lets businesses claim input tax credits for the GST included in the price paid for business purchases. These are called input tax credits. An unregistered taxi driver is not only in breach of the GST law but is also at a disadvantage because he or she is not able to claim an input tax credit for the GST included in the price paid on these expenses. Normally a tax invoice will only be requested by a passenger when the trip is a business expense (creditable acquisition) to the passenger. In addition, a driver is subject to 'No ABN withholding' where the driver cannot quote an ABN in relation to a supply of taxi travel made to a passenger who is carrying on an enterprise. Accordingly, the business passenger (or passenger who is carrying on an enterprise) is required to withhold 46.5% of the metered fare and forward this amount to us. The Commissioner also has the power to register any business that does not apply if he is satisfied that the business should have been registered. The Commissioner can backdate registration in these cases. If this happens, it means that the Commissioner seeks to recover 1/11th of any fares from the deemed registration date. Any business that is liable to remit GST and fails to do so is subject to penalties.

Members of the public, including other taxi drivers and operators, can call us to report instances of tax evasion to the Tax Evasion Referral Centre (TERC) by either:

•: reporting online using this secure Tax evasion reporting form
•: phoning 1800 060 062
•: sending a fax to 1800 804 544
•: writing to

Australian Taxation Office
Locked Bag 6050
Dandenong Victoria 3175.

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