Government rules employee Uber rides now eligible for fringe benefits tax exemption

Uber fringe benefits tax exemption


The federal government has deemed that employers using ridesharing services, such as Uber, will be eligible for fringe benefits tax (FBT) exemptions, after the ATO claimed otherwise last year.

Previously, exemptions applied to taxi travel only, and did not include ridesharing.

The ATO deemed in July last year that even though ridesharing drivers pay GST, the service is not a ‘taxi’ for the purposes of the FBT exemption.

The change was reportedly one of several passed into legislation on Wednesday, and simply changes the word ‘taxi’, instead referencing “a motor vehicle used for taxi travel (other than a limousine)”.

In practical terms, it means employers will no longer have to require that staff take traditional taxis, if they wish to claim the cost. Those costs will now be eligible for the same tax benefits for the employer as traditional taxis would be.

Predictably, Georgia Foster, Uber for Business country manager for Australia and New Zealand, welcomed the change.

“Employees, too, will be able to claim transport costs from their employers, confident in the knowledge that their company won’t be liable for a fringe benefits tax as a result,” she said in a statement.

She suggested the previous legislation was outdated, and failed to reflect an evolution in transport options.

“The FBT exemption for taxi travel was originally introduced in 1995 to ensure employers were not unduly penalised for providing safe transport for employees,” she said.

“However, at that time, ridesharing did not exist. At that time, taxis were often the only transport option available to a number of employers.”

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