Share:

Uber Calls GST Ruling “Tax on Innovation”, Would “Hurt” 1 Million Canadians

Share:

Starting July 1, 2017, ride-sharing companies like Uber will start charging customers GST/HST, based on the Federal government’s latest budget proposal for 2017, made yesterday.

Uber has Ian Black, Regional General Manager for Uber Canada, said in a press release “This new tax on innovation would hurt over a million Canadians who use ridesharing to earn income and get around their cities.”

Black continued to say “At a time when Canadians spend far too much time stuck in traffic — and people should be encouraged to leave their cars at home, take public transit, and share rides — we should be supporting policies that make sustainable transportation more affordable, not more expensive.”

Uber says while Federal tax laws grant small business owners tax breaks on sales tax, it “unfairly” excludes taxi drivers, and the same exemption should be offered to taxis to “level the playing field”.

Black says many Canadians will be impacted by this tax, so “we ask for meaningful consultation on this proposal and hope to work with the Government on smart solutions that support innovation.”

What do you think? Should Uber be paying GST/HST in Canada?

Share:

  • David

    I have to say I agree with their point, this is not Uber that is collecting the GST/HST in Canada but the drivers who drive for Uber who are self employed and not employees. A self employed person in any other industry doesn’t have to charge or collect GST?HST until they earn $30,000. So why should a self-employed taxi driver be any different? Uber as a corporation shouldn’t be excluded from any tax a regular corporation would pay in Canada.

  • Joe

    I’m shocked that there was ever an exception. Uber should totally be paying GST. Why let them into Canada at all if they’re not going to bring in tax revenue?

  • Joe

    I’m not sure I understand your comment David. Can you explain?

    I was under the impression that Uber handles all the billing in-app, therefore they’re the ones who would collect and pay the tax. Are you saying the subcontractor (aka the driver) is going to be impacted by this?

    Because I don’t think that anybody wants to hurt the little guy, but a big corporation like Uber should definitely be paying tax.

  • FragilityG4

    If Uber believes so dearly that this is bad for Canadians, then perhaps they should absorb it to help out Canadians……

  • It’s Me

    There was never an exception that legitimately applied them them. They just pretended they were a small company as far as tax collection and remittance.

  • It’s Me

    It’s funny their best excuse is to call this a new tax. Sorry uber, GST has been around for decades. Not new.

    The drivers are independent operators operating for and on behalf of the company uber. Uber is being disingenuous here. They acknowledged years ago that they should be collecting and remitting gst. But they put the onus on the drivers and then told the drivers not too. This company is about as dirty as it gets. This was straight up tax evasion under the guise of a waiver that doesn’t apply to them.

  • Joe

    Thanks for elaborating. I’m still confused though: why do they have to start paying effective July 1st?

    Shouldn’t they be required to pay back taxes? Or at the very least, shouldn’t it be effective immediately then? I’m just trying to get a clear picture of exactly what’s going on.

  • It’s Me

    Good question. Guess it depends on how tough Justin wants to be. If the government doesn’t go after them for back taxes, the message is basically that anyone should avoid paying taxes until caught and then just start paying with no penalty.

    Uber’s argument is so much hot air. They require a GST registration number from drivers in Montreal. They even document that driver are responsible for collecting and remitting gst, which is impossible since the driver never handle the payments. Uber processes all of the payments, amounting to many millions of dollars, so of course they need to handle the taxes and of course they are well over the $30k waiver limit.

  • Joe

    Thank you, this clarifies things!

    I knew about the $30k waiver, but was confused because Uber is the party who handles the transaction.

    I guess Uber drivers also need to be GST registered, because they would need to bill Uber 5% GST when they invoice Uber for their “services” aka their wages.

    Either way, I guess this makes it pretty clear that all Uber rides should be billed a 5% GST plus whatever provincial tax there might be.

    And I agree with your point re: back taxes. The government really does need to make an example here, otherwise they’ll be taken for a ride by AirBNB and all the other sharing economy tax evaders.

    I pay my taxes like a regular person, I don’t see why a multi-national corporation funded by Saudi billionaires can’t do the same.

  • It’s Me

    I kind of expect them to pull “a Scientology” next and declare themselves to be a church or charity and claim they are a tax exempt entity.

  • dudemaster

    Wasn’t GST supposed to be a temporary tax? After all – GST is a tax on income that has already been taxed.

  • It’s Me

    Yup. Every liberal government has promised to scrap it since its inception, until the get elected that is. But every government has recognized that it is necessary as long as they want to keep spending as the do.

  • NOHoldsBar

    Uber is an unethical company. As a result why should anyone assume their drivers will be and actually forward the GST they collected to the government?

  • NOHoldsBar

    That’s not how government legislation usually works. It’s a new law and it’s effective July 2017.

  • NOHoldsBar

    One day the bubble you live in will burst Joe.

  • NOHoldsBar

    They’re not lying when they’re saying it’s a new tax. It’s a new tax for them. They will be ruthless and unscrupulous in finding a way not to pay the tax or minimizing the amount they have to reimburse the feds for the GST they will collect.

    Don’t be surprised when you hear of a CRA Uber audit and they’re found not paying the feds some of the GST they have collected.

  • NOHoldsBar

    Joe. This conversation is too advanced for you. Time to step away from the Internet for a while.

  • NOHoldsBar

    You’re wrong.

    Is an Uber driver going to refuse cash payment for a ride? The driver is handling payments. He must document how much exactly. We know they won’t though.

  • I was without work for six months time when my early Fellow worker ultimately recommended me to start off freelancing online… That was just after I earned $5000 in my first month when I seriously believed I really could do this for a living! Now a days I am joyful than ever… I work at home moreover I am my own boss now like I always wanted… I see a number of depressed people around me, working the same old boring job that’s sucking the life out of them day-after-day… Everytime I see somebody similar to that I say START FREELANCING MAN! This is where I started out >>>> http://rasp­.­is/PAJMyU

  • Paul LeBlanc

    No. It was brought in by the Mulroney Government to replace a hidden sales tax on Canadian manufactured goods which gave imports an unfair advantage. It was intended to be permanent. The Cretien Liberals had replacing it in their platform when they ran for the first time in the early 90s but had no real plan on what they would replace it with, and ultimately broke that promise.

  • It’s Me

    Umm, yeah, thanks. Never said otherwise…

  • It’s Me

    He won’t have to refuse. The payment is handled through the app you used to request the Uber. Unless you flagged him down without using the app that is, in which case he isn’t drving on behalf of uber that time.

  • It’s Me

    Umm, no, it’s not a new tax to them. They’ve required GST registration numbers from some drivers for years. Just because they didn’t pay the tax doesn’t mean it’s new to them.

    They should do everything they can to reduce their tax burden, but they have to do so within the law. The new law simply removes any doubt that they should be collecting and remitting.

  • Paul LeBlanc

    Sorry man, was replying to dudemaster.

  • raslucas

    Trudeau never promised to scrap GST. to be honest I get this tax. Like I don’t think Taxi drivers and Uber drivers should necessarily be exempted from that tax break, but since they are exempted, I’m happy it applies to both Uber and Taxis.

    Taxi drivers were already getting taxed, and to be honest the Libs shouldn’t be reducing any taxes until they get the finances back on track so this is the alternative.

  • raslucas

    Alright so the reason Uber’s stuff was exempt is more or less because from a business perspective, each and every driver are themselves their own private business. I think they then pay something to Uber. Therefore each driver’s revenue is under the 30k threshold.

  • It’s Me

    Yeah, you’re actually right about that. Guess it was only up to cretien.

  • IBoy

    No more unethical that the taxi cartel.

  • There seems to be a lot of confusion here about how GST works.

    Businesses DO NOT pay GST, the end user pays it. A business pays GST on whatever goods or services they pay for. All of the GST a business pays out is deducted from the amount that they collect as an “input tax credit” (which means that you get it back, in full, immediately by withholding it from the tax you collected from customers an the deduction is on the full amount as it is deducted from the tax, not the income .

    Although any business that has less than $30k is not REQUIRED to collect GST, it is usually in their best interest to do so because if you don’t collect GST you can’t get your GST back on any expenses, such as leasing or purchasing a car, maintenance, fuel, computers, cellphones, internet, etc.

  • mcfilmmakers

    You clearly dont know how uner works. Uber sets the rates. Uber takes the payment. No cash is ever involved. The driver only drives.

    Unlike a taxi driver, who doesnprocess these things himself and is effectively self employed, an uber driver is more like an employee of s takeout restaurant where the take out is people. Uber will never accept their drivers as employees however, but there are court cases intended to establish just that right now.

Deals