Tax Breaks for Taxi Rides

The Australian Taxi Office (ATO) has recently ruled that Uber and other ride-sharing companies do not qualify as taxis for the purpose of fringe benefits tax (FBT) exemptions.

This means that travelling to your work from home and vice versa are eligible to the FBT tax break. This decision has come after two years of industry consultation.

FBT is paid by employers on certain benefits they provide to their employees. For FBT purposes, an employee includes a current, future or past employee, a director of a company, or a beneficiary of a trust who works in the business.

“Employers are specifically exempted from paying FBT in respect of travel undertaken by their employees in a taxi to and from work or due to illness of the employee,” a Tax Office spokeswomen said. “However, there is no FBT on work related travel, whether by taxi or Uber and other ride-sharing companies”.

The ATO stance on this decision is that vehicle used in ride-sharing are not licensed as taxis, and therefor fall outside FBT exemption.

For more information on FBT relating to taxis, just Click Here.

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