GST and taxis

Fares paid to taxi drivers by passengers include goods and services tax (GST). If you're a taxi driver and you're not employed by someone else, you must:

• register for GST – regardless of how much you earn
• only claim GST credits related to your work
• lodge business activity statements (BAS) monthly or quarterly (you can't choose to lodge annually)
• pay your net GST

The net GST amount is the GST included in all fares that you've taken, minus any input tax credits for the GST included in your business purchases, including bailment payments.

You may have to use the cents per kilometre earnings rate in preparing your BAS if you don't have proper records of your earnings.

If you sell a taxi licence or plate, the transaction may be GST-free.

Note: If you provide ride-sourcing services, for example you drive for Uber or GoCatch, this advice does not apply to you.

See also  

• Ride-sourcing
• Registering for GST

Completing your BAS

This section covers issues specific to the taxi industry.

You need to use a business activity statement (BAS) to:

• report and pay the GST you've collected
• claim GST credits.

Find out about

• GST reporting methods
• Reporting sales and purchases
• Amount to pay

See also

• Business activity statements (BAS) – general instructions for completing your BAS

GST reporting methods

From 1 July 2017, Simpler BAS is the default reporting method for small businesses.

Taxi drivers must report GST using one of the following methods:

• Simpler BAS – this method allows you to only calculate and report G1, 1A and 1B in your BAS and pay your actual amounts quarterly.
• Pay a pre-determined GST instalment amount quarterly and report your actual GST information annually – to be eligible, you need to have reported actual GST amounts for at least four months (for example, two quarterly business activity statements) and you can't be in a net refund position.
• Full reporting – you must calculate and report all the GST labels in your BAS and pay your actual GST amounts quarterly.

Reporting annually is not available to taxi drivers.

Example of electronic Simpler BAS form

The following example of an electronic Simpler BAS form shows the three labels you need to complete.

Example of paper Simpler BAS form

The following is an example of a paper Simpler BAS form. Complete G1, 1A and 1B and do not complete the other GST labels. Option 2 is not available.

Reporting sales and purchases

You must include income and expenses from all of your business activities, including taxi driving, on your BAS.

G1 Total sales includes all your income from:

• taxi takings total sales (for example, cash, credit cards, Cabcharge) including tolls and extras such as baggage handling
• tips
• any WorkCover payments you have received.

1B GST on purchases includes the GST on all purchases.

Reporting using Simpler BAS

To report using Simpler BAS you only need to report:

• G1 Total sales
• 1A GST on sales
• 1B GST on purchases.

You can contact us to change your GST reporting method.

Reporting using the full reporting method

If you have chosen the full reporting method:

• in G1 Total sales include all your income from:      
  • taxi takings (cash, credit cards, Cabcharge, etc) including tolls and extras such as baggage handling
  • tips
  • any WorkCover payments you have received.
• in G11 Non-capital purchases include:      
  • the bailment payment or shift rent that you pay the taxi operator
  • fuel, oil and car washes you purchase
  • insurance payments
  • uniforms (where they are normally tax deductible)
  • business telephone expenses
  • accounting fees
  • payments without GST in the price (such as bank fees and license fees).

If you have chosen Option 3, there will be a figure in the box at G21. If you need to vary this amount, fill out the rest of Option 3.

Amount to pay

The figure at 9 Your payment or refund amount is the amount you must pay. If the result is a negative number, this is your refund amount.

Find out about

• Record-keeping requirements

Taxi cents per kilometre earnings rate

The cents per kilometre earnings rate is the average amount of income earned by a taxi for the total kilometres travelled by the taxi in a year.

The rate includes GST. It does not take expenses into account. It only measures gross taxi takings per kilometre of distance travelled.

Taxi operators and drivers can use the cents per kilometre rate to:

• compare their performance to the rest of the taxi industry
• check that their tax records accurately reflect their income.

Tax agents and accountants can use the cents per kilometre rate to assist them in preparing tax returns and business activity statements for their clients.

We use the cents per kilometre rate in cases where taxi operators or drivers do not have proper records.

The rate has been developed in consultation with taxi industry participants.

Current rate

The latest rate developed is $1.30/km

Selling taxi licences and plates

The sale of a business, including taxi plates and licences, is GST-free if the sale is of a going concern.

The sale of a going concern is where:

• the sale is for consideration
• the purchaser is registered or required to be registered for GST
• both parties agree in writing that the sale is of a going concern
• all of the things necessary for the continued operation of the business are supplied to the buyer
• the supplier carries on the business until the day it is sold.

See also  

• Sale of a business as a going concern – supporting information
• GSTR 2002/5 Goods and services tax: when is a 'supply of a going concern' GST-free?

Record-keeping requirements

You must keep proper records of all transactions, including:

• total kilometres travelled (including travel without passengers)
• number of shifts worked
• total income (including cash, credit card and Cabcharge)
• expenses (for example, petrol and car washes).

Your records should include documents such as invoices and receipts to verify your income and expenses.

You must keep these records for five years after they were prepared, obtained or the transaction was completed, whichever is later.

See also  

• Taxation Ruling TR 96/11 – Income tax: record keeping – taxi industry – guidelines for recording taxi takings
• Taxi industry – issues register

Practical advice to help taxi drivers correctly report business income and expenses for GST.