Uber the loser as Airbnb still exempt from GST

May 27th, 2015 | | Accommodation

uberUber has drawn the short straw next financial year with the Australian Tax Office announcing that the car sharing service will have to pay GST from August – but Airbnb, which is a similar business model, is still exempt from the tax. Australian Uber drivers will now have to apply for an ABN and pay 10% GST on every dollar they earn, meaning fares could jump.

As the ABC reported, “Uber is the loser and Airbnb the clear winner” in what accommodation lobby groups believe is a bit of a hypocritical move. “The ATO has determined that if you make a car available for public hire and use it to transport passengers for a fare, you are required to be registered for GST regardless of your turnover,” said the Association’s Chief Executive Officer, Richard Munro. “Yet, if you make a room in your property available for public hire and charge a fee, GST doesn’t apply.

“Surely, the most sensible approach would be for the ATO to ensure that all companies operating in Australia’s sharing economy pay the same taxes as ‘bricks and mortar’ companies, including GST and company tax.” Naturally, Airbnb welcomes the announcement by the ATO. “It’s another signal that the sharing economy is here to stay in Australia,” said Sam McDonagh, Australian general manager for Airbnb.

But Airbnb shouldn’t’ be counting their lucky chickens too soon, the tax office has suggested they are preparing to roll out further fees to parking rentals, odd jobs and room rentals. “The existing tax law applies equally whether a buyer and seller come together at a bricks and mortar business or via a mobile phone app or website,” an ATO spokesperson told The Courier-Mail.

In theory, most Airbnb rentals needn’t be worried: under the GST Act, you are required to be registered for GST if you are carrying on an enterprise and your GST turnover meets the registration turnover threshold (currently $75,000 per annum).

For most, it’s a little extra cash on the side, and not a fully-fledged business.

Should Uber be treated differently to Airbnb? Have your say.

Written by Alex Harmon

Source: ABC News