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Do Uber Drivers Deserve to Be Taxed Like Everyone Else?

Uber drivers and taxes

There is no doubt that there is a lot a controversy and animosity amongst the taxicab drivers and the Uber drivers.   The first question that has to come to mind is that those that are involved in Uber driving are not doing so as a hobby, and coming to the realization that they are operating a business.

In order to determine this they need to look at what the CRA uses as criteria for identifying a business. T  he main frame that the CRA will use for determining this is how much time is devoted to the driving and what the expectations of profit are.  Based on this the CRA has determined that Uber is a business. As such, they are being taxed as sole proprietor business owners in Canada.

As a business this means that they must register for a HST account.  Then based on their annual income if this is over $30,000 they will have to collect the GST HST. In most cases this tax is included in the taxi and limo fares. What is important to realize is that Uber drivers are considered as independent contractors this means that they must do their taxes according to the rules for contractors.

Some Uber drivers are under the impression that they do not have to collect the HST, however the Uber company has indicated that it is up to the individual drivers to do this collection and submit it to the tax department. Currently  taxi drivers which are fully regulated under the CRA laws have to be registered for the GST HST and they charge 13% on their fares.  In the case were passenger transportation fares are not being regulated by the province or the you municipality the approach is a little different.   In this case the drivers only have to register and charge this tax if their annual tax revenues are above the $30,000.

There is no doubt that this has become quite a controversy and is something that is going to have to be sorted out quickly. In order to make the transportation field a fair playing ground for both Uber drivers and the taxi industry.

The best approach the Uber drivers can take is to get themselves a good quality accountant who is going to be able to sort out all the rules and regulations that may pertain to their tax situation and do their taxes accordingly.   It is far better to try and play by the tax rules even though they may be somewhat unclear, then end up making a big tax mistake that could be costly.

 

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