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Australia: Ride-sharing services not eligible for FBT exemption

Australia: Ride-sharing services not eligible for FBT

The Australian Taxation Office (ATO) updated its website to confirm that ride-sharing services are not taxis for the purposes of the fringe benefits tax (FBT) exemption.

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The cost of any taxi travel beginning or ending at an employee’s place of work is exempt from FBT to the extent the travel is undertaken in a licensed taxi. The issue for the ATO was whether home-to-work travel in ride-sharing services could have access to this FBT exemption.

During the lengthy public consultation process, there were two key perceived unfair inconsistencies commonly noted:

  • Ride-sharing drivers are considered taxi drivers for goods and services tax (GST) purposes. It would seem contradictory to not allow them to be considered to be a taxi for purposes of the FBT exemption.
  • It seemed illogical that otherwise identical trips being undertaken in taxis compared to ride-share vehicles would have different treatments for FBT.

While the ATO attempted to get to a position that the FBT exemption could apply to ride-sharing services, it was concluded that the words of the legislation are clear and that legislative reform would be required to incorporate ride-sharing services into the FBT exemption.


Read a July 2019 report prepared by the KPMG member firm in Australia

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