Uber says drivers are expected to collect HST
City councillor asks federal taxman to investigate after email states riders aren’t charged HST. Uber Canada says its drivers are responsible for collecting and remitting the tax.

thestar.com
July 21, 2015
By Betsy Powell

Uber Canada says it’s up to its drivers to collect the HST from customers and turn it over to the government.

And a spokeswoman said Tuesday the company pays all applicable taxes after taxi-industry supporter Councillor Jim Karygiannis launched his latest attack against the ride-sharing company.

He obtained an email purportedly sent from an Uber customer support representative to an UberX passenger that stated: “There is no tax charged on rides.”

Karygiannis has asked the Canada Revenue Agency to investigate whether the company is, in fact, paying the appropriate amount of tax.

“I am totally shocked and surprised that a Canadian corporation is able to get away without charging and paying (HST),” Karygiannis wrote in his email to Andrew Treusch, commissioner of revenue and CEO of the CRA.

Responding in email, Uber’s Susie Heath wrote there is, in fact, tax charged on rides, but it is up to drivers to collect and remit the tax.

“Eighty per cent of fares collected for Uber trips go to local and independent driver partners who must file their HST (harmonized sales tax) obligations,” she stated.

“As a registered Canadian business, Uber Canada pays all applicable taxes, and we regularly communicate to driver partners on how to file their HST as applicable.”

Karygiannis said he has seen many Uber passenger receipts and the fare breakdowns do not include an HST charge or registration number.

“If a mom-and-pop operation failed to comply with municipal, provincial or federal rules, governments would be all over it.”

Kim Hynes, a spokeswoman for the Canada Revenue Agency, would not respond to questions about Uber citing “specific tax affairs of taxpayers/registrants.”

Hynes also did not respond to the Star’s request for information on whether the agency is collecting tax from Uber drivers, nor how CRA would ensure the applicable amount of taxes are being paid.

She explained, in email, that self-employed cab drivers, whose fares are regulated under the laws of the province or municipality, must be registered with CRA for GST/HST purposes and charge 13 per cent on their fares.

If the fares for passenger transportation fares aren’t regulated by the province or municipality, drivers are only required to register and charge GST/HST if their worldwide annual taxable revenues exceed $30,000, she wrote.

Philomena Comerford, president of Baird MacGregor Insurance Brokers, said a key unanswered question is “who is billing the customer? Is it Uber or the driver or both?

“Carrying paying passengers is not an HST exempt service regardless of whether a licensed or unlicensed taxi is used,” she wrote in email, adding that Uber's Montreal office was raided by the CRA in May.

“The playing field is not level between Uber and taxi drivers on account of the differential between regulated taxi rates that are subject to HST and Uber’s unregulated rates that do not add an HST charge.”

Noah Zon, a researcher with the public policy think tank Mowat Centre, said taxation in the growing sharing economy presents a challenge to tax collectors far beyond Uber and the taxi industry. As increasing numbers of people work as independent contractors, they need their tax implications spelled out in plain, clear language.

“Governments in Canada and around the world can do a much better job” of this, Zon, co-author of Policymaking for the Sharing Economy, said Tuesday.