Uber has decided to take the Australian Taxation Office to court over the latter’s GST demand.
Following a failed appeal in a letter to Treasurer Joe Hockey obtain by AFR Weekend, to mediate the feud the San Francisco-based ride-sharing service filed an application with the Federal Court to challenge the ATO’s GST demand. The company claims the agency is unfairly targeting its drivers using outdated laws that were written when the ride-sharing concept was non-existent.
Uber acknowledged drivers should pay an appropriate share of tax, but it argued they are treated differently than “any other participant of the sharing economy.” The ATO recently ruled that people who use Uber to offer rides using their private vehicles should pay GST from the first dollar. However, most small businesses only pay GST once they earn over $75,000 AUD a year.
Brad Kitschke, director of public policy for Uber Australia told AFR Weekend the ATO is applying an interpretation of tax law written in 1999 to a 2015 business model and claimed “there needs to be a wake-up Australia moment on this.” Kitschke wrote to the Treasurer urging him to ask the agency to delay the GST imposition until October.
The San Francisco-based company was unhappy with the fact that other fast-growing businesses such as room-sharing service Airbnb have not been ordered to collect GST. Uber has previously dismissed comments by tax commissioner Chris Jordan that the company has been playing dirty to win the media debate over the GST ruling.