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Uber just lost a crucial court ruling - which might push up the price of a fare

Discussion in 'Melbourne | Uber Drivers Forum' started by Dimmi Quando, Feb 17, 2017.

  1. Dimmi Quando

    Dimmi Quando Member

    So it turns out an Uber is actually a taxi – at least for tax purposes.

    That's the upshot of a Federal Court judgment, handed down on Friday.
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    Uber ordered to pay GST

    Uber ordered to pay GST
    A Federal Court judgment on Uber raises GST issues over the entire sharing economy. Vision courtesy ABC News 24.

    Uber had fought an 18-month battle to avoid GST, but will now need to work out how to apply the ruling to its 50,000-plus partner-drivers.

    For the ride-sharing giant, it will mean having to pay the 10 per cent GST tax on trips.

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    For governments, meanwhile, the decision means a tax windfall.

    And, finally, for passengers, there is the prospect of potentially higher costs – if Uber decides to pass on the tax.

    In July 2015 Uber launched legal action against the Australian Tax Office, challenging the office's demand it and its drivers pay GST.

    Threshold question
    Enterprises that earn less than $75,000 a year do not need to register to pay GST. Uber claims most of its drivers earn less than $20,000 a year.

    • The Tax Office argued the legislation might say "taxi", but really meant all vehicles that drove people from place to place for a fare. It quoted six dictionary definitions of the word taxi to argue that it was a broad term, rather than specific to yellow-painted-cars with taxi metres.

      No special meaning
      In a ruling handed down on Friday Justice John Griffiths found the word "taxi" should be given "their ordinary, everyday meanings and not a trade or specialised meaning".

      "The ordinary meaning of the word 'taxi' is a vehicle available for hire by the public and which transports a passenger at his or her direction for the payment of a fare," the Justice wrote.

      The Justice also found a taxi did not need to have a taxi-metre, pick up fares without a booking or be able to use a taxi rank in order for it to be considered a taxi.

      In a brief statement Uber said it was disappointed with the court's decision.

      The ATO has been contacted for comment.
     
    Last edited: Feb 17, 2017
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  2. Dimmi Quando

    Dimmi Quando Member

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