The CRA has issued GST/HST Info Sheet GI-196, “GST/HST and Commercial Ride-sharing Services” in relation to the proposed changes to the definition of “taxi business” introduced in the Federal Budget 2017 on March 22, 2017. Under the Excise Tax Act, small suppliers (generally, organizations with annual taxable supplies of less than $30,000) are not required to register for GST/HST. However, taxi operators cannot be considered small suppliers and are required to register and collect GST/HST on their fares regardless of their total sales. The amended definition of “taxi business,” effective July 1, 2017, includes persons engaged in the business of transporting passengers for fares by motor vehicle within a municipality where the transportation is arranged for or coordinated through an electronic platform. This will require a ride-sharing service operating through an electronic platform, such as Uber, to register and collect tax in the same manner as taxi operators, placing them in an equal playing field.
The info sheet contains information on the change to the definition of “taxi business” in addition to basic information on how to register, charge, and collect and report GST/HST.