There is a lot of confusion around GST registration for Uber drivers. According to the IRD “you must register for GST if you carry out a taxable activity and your turnover was $60,000 or more in the last 12 months or will be $60,000 or more in the next 12 months. If your turnover is under $60,000 you may register for GST voluntarily. This can be useful in situations where your business is operating at a loss.”
In short, carrying out a taxable activity with a turnover of less than $60,000 does not attract a GST liability. However, you have to register for GST regardless of your turnover if your prices include GST.
We reached out to Uber to see if they had a clear explanation, this was their reply:
“Because of new GST rules effective 1 October 2016, Uber is required to charge an additional 15% GST on the Service Fee to non-GST registered partners. This is why the Service Fee percentage is 28% for non-GST registered partners and 25% for GST registered partners. The advantage is that if you are not GST registered, you will not need to remit 15% GST on your gross trip fares to the IRD.”
This clears the air a bit more. If you’re unsure whether you need to register for GST you can call us for a consultation.
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