Talking Tax – Issue 66


Uber B.V. v Commissioner of Taxation [2017] FCA 110

The Federal Court has dismissed the application of Uber in an action against the Commissioner of Taxation (Commissioner).

The topical dispute stands as the landmark decision that Uber drivers are required to be registered for GST purposes.

The ATO has released an announcement following the decision, stating that it will continue to administer the law according to its published advice until a different decision has been made by the courts.

Until such time as this occurs, practitioners are reminded to advise clients with a ride-sourcing enterprise to keep records, have an ABN, register for GST (regardless of how much they earn), pay GST on the full fare received from passengers, lodge activity statements and include income from ride-sourcing in their income tax returns. Under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act), enterprises with an annual turnover less than $75,000 do not need to register for GST. Section 144-5 of the GST Act contains an exemption to this threshold, requiring taxi and limousine operators to register for GST regardless of their turnover.

The Taxpayer submitted that Uber drivers did not provide ‘taxi travel’ within the meaning of section 144-1 as they do not possess the ‘features of tax travel which are inherent in the operation of the taxi industry as regulated’ by States and Territories. Specifically, Uber identified the following features as characteristics of the regulated tax industry that distinguished it from the provision of Uber services:

  • the requirement that the vehicle be registered and that the driver be licenced to drive a taxi
  • the vehicle be marked as a taxi and have a light indicating availability
  • the vehicle be marked in a certain way and the driver wear a uniform as required by law
  • the driver is required to accept hires under certain circumstances
  • prescribed information must be displayed in the vehicle
  • the vehicle must include a taximeter calculating the fare
  • the payment of the fare by the hirer by cash or other method at the end of the journey
  • the vehicle must be fitted with a security camera and
  • the calculation of the fare, or maximum fare, is defined or regulated by or under the relevant State or Territory law.

Further, Uber identified several privileges afforded to those providing ‘taxi travel’, including the right to wait in a taxi rank, accept a booking and use special purpose lanes.

Uber submitted that Division 144 was enacted with the intention that the provisions would apply to the settled meaning of ‘taxi’ at the time, which did not include any service akin to that provided by Uber. It was argued that as section 144-1 is a specific exemption to an otherwise broad provision, it was not intended to extend beyond the meaning of ‘taxi’ at the time to encompass future technological developments that merely achieved the same result, being point to point transport.

Uber referred to the regulatory developments in NSW and the ACT that distinguish the Uber service from taxis, and impose different regulatory requirements.

Uber also distinguished Uber services from those of ‘limousines’ as referred to in the definition of ‘taxi travel’ on similar basis to taxis, as well as the physical different between a large limousine vehicle and an Uber vehicle.

The Commissioner argued that ‘taxi travel’ should be construed as a whole phrase, and was ‘transportation, by a person driving a private vehicle, of a passenger from one point to another at the passengers direction and for a fare, irrespective of whether the fare is calculated by reference to a taximeter’. Alternatively, he submitted that the supplies made by the Uber driver had the essential features or transport by taxi or limousine.

The Commissioner distinguished between the meaning of taxi and limousine in a State regulatory concept on the basis that the GST Act is a federal taxing statute operating nationally, and the GST Act specifically states (at section 9-10(3)) that a supply occurs irrespective of compliance with State and Territory laws.

The Court agreed with the Commissioner that Division 144 and the concept of ‘taxi travel’ was introduced to ensure that all persons who supplied ‘taxi travel’ were captured under the GST regime, and the meaning should be construed broadly not technically. The Court held that a practical, common sense approach to the term ‘taxi travel’ should be taken and that the GST Act was ‘always speaking’ - meaning it was not determinative that the technology used in providing the Uber service was not developed at the time Division 144 was enacted.

Applying these principles, Justice Griffiths held that the term ‘taxi travel’ should be given its ordinary meaning rather than a trade or specialised meaning. His Honour found that this meant that the Uber services could fall within the meaning of the word ‘taxi’, but not ‘limousine’. Accordingly, the Driver was supplying ‘taxi travel’ as defined in section 144(5)-1 when providing the Uber service and was required to be registered for GST.

ATO guidance

Diverting personal services income to self-managed superannuation funds

The Australian Taxation Office (ATO) have released a statement announcing that they are reviewing arrangements where individuals are diverting personal services income to their self-managed superannuation fund (SMSF) to avoid income tax.

These arrangements arise where an individual who performs a service directs their client to pay the fees for the service to an entity that distributes that income to the individual’s SMSF.

The purported outcome of the arrangement is that the income is not subject to tax at the individual’s marginal tax rate but is either exempt from tax, or taxed at a concessional rate.

Taxpayer Alert TA 2016/6 provides a detailed overview of the ATO’s views on these arrangements.

Practitioners are reminded to review any such arrangements that are in place for their clients, as penalties may apply to participants and promoters.

The due date to contact the ATO in relation to TA 2016/6 has been extended to 30 April 2017, in light of the significant superannuation reforms since the 2016 budget.


Revenue Legislation Amendment Bill 2016

The Revenue Legislation Amendment Bill 2016 (No 2) (ACT) (Bill) has been passed, amending several pieces of tax legislation to adopt a ‘barrier free’ model to collect conveyance duty.

The amendments to implement the barrier free model include:

  • amending the conveyance duty process so that payment of duty occurs after settlement
  • requiring the registration of dutiable instruments under the Land Titles Act
  • authorising collection of information on behalf of the Commissioner for ACT Revenue (Commissioner) for the purpose of duty assessment
  • abolishing $20 and $200 nominal duty and
  • allowing unpaid duty debt to be secured as a charge against the relevant property.

The Bill also makes amendments to other tax legislation to implement requirements stemming from the Revenue Collection Transformation Program and, in particular, requirements relating to the release of a new IT system for revenue collection.

Treasury Laws Amendment (GST Low Value Goods) Bill 2017

Parliament has released the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 (Bill) to amend the GST laws in accordance with the announcement in the 2016-17 Budget. The amendments will ensure that goods and services tax (GST) is payable on certain supplies of low value goods that are purchased and imported into Australia.

Under the current regime, Australian consumers can purchase and import low value goods to the indirect tax zone without the consumption being subject to GST. However, this measure was first introduced at a time when it was unusual for consumers to purchase goods from overseas. The Bill brings the GST regime in line with the current market, where consumers regularly import goods from outside the indirect tax zone.

The Bill proposes that supplies of goods valued at $1,000 or less (low value goods) will be connected with the indirect tax zone if the goods are, broadly, purchased by consumers and brought to the indirect tax zone with the assistance of the supplier. Where the goods are an inbound intangible consumer supply, the operator of the electronic distribution platform will be the supplier of those low value goods.

Under this model, overseas vendors that have an Australian turnover of $75,000 or more will be required to register for, collect and remit GST on low-value goods supplied to consumers in Australia as well as any other taxable supplies they make. As such, is may be necessary for offshore vendors and their advisers to review current arrangements to ensure compliance.

As reported in the 2016-17 Budget, the amendments are estimated to result in a $300 million increase in GST revenue in 2019-2020.

The amendments as outlined in the Bill would apply in working out net amounts for tax periods commencing on or after 1 July 2017 and the GST treatment of importations occurring on or after 1 July 2017.

SRO Guidance

State Revenue Office Victoria Publication GAIC-01-2017: public purpose land subdivisions

The SRO has released a bulletin explaining the recent amendments to the Planning and Environment Act 1987 (Cth) to ensure the Growth Areas Infrastructure Contribution (GAIC) is effectively implemented.

The GAIC is a single contribution payable when an ‘event’ occurs in relation to urban property development. The concept of an ‘event’ includes buying, subdividing or applying for a building permit in relation to the land. The amendments:

  • ensure that the GAIC is payable on the subdivision of public purpose land
  • remove the exemption from the GAIC for compulsory acquisitions by government bodies and
  • ensure that the GAIC may be apportioned where land is subdivided.


Adam Dimac

Adam is an experienced tax lawyer, advising on a range of matters, including Division 7A, CGT and corporate restructuring.

Vanessa Murphy

Corporate & commercial lawyer Vanessa's experience includes M&A, funds, capital markets transactions and regulatory advice.

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