4 ms·

Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers - will they only have to pay taxes on their

Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers - will they only have to pay taxes on their cut?

prolly_a_moron 10y ago
>Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers That's the story their PR spins. Luckily they don't make the laws. You think this idea of, "He's not my employee, he's a contractor!" as a way to avoid employer obligations is new? That's a laugh, and it's the reason these laws exist.
- problems 10y ago
  But it's the truth - those Uber drivers don't get guaranteed work, they don't get hours, they don't get salary. Instead they find contracts via Uber and they keep their portion of the earnings. Just because Uber takes the payment makes them an employer? If Uber had the drivers take the payment and pay them out later would they not be an employer anymore? Seems like the exact definition of a contractor to me. I don't know how else you could define it really.
  - run4yourlives2 10y ago
    Are uber drivers allowed to be Lyft Drivers or regular Taxi drivers? If so, you have a good argument that they are not employees. If not, they will be seen by the CRA as employees, regardless of anything else in place. If they are not employees, drivers are obliged to collect GST from Uber for their services if they earn more than $30K. If Uber re-sells that service, they are also obliged to collect GST from the end user. They can claim an input tax credit on the contractor's GST to offset. This is normal business operation in Canada, and one of the main reasons the HST was so popular - it moved all the multiple people charging and remitting taxes to one spot - the end sale. If Uber's contractors are determined to be employees, that's a major issue for them, because at that point they have a ton of CPP and EI to pay that they have not been doing. Really, they don't have much of an argument here either way. There is no real reason they should be tax exempt.
  - nebabyte 10y ago
    > don't get guaranteed work Who does? And not all employees of every company are salaried. Some work on commission or other models.
run4yourlives2 10y ago
The consumer pays Uber. That is the point of sale. That is where the sales tax is collected. This isn't rocket science. To your - bad - analogy: If MS was selling templates created in word by you to a marketplace, you can bet that GST would be paid on them by the consumer to MS.
- LammyL 10y ago
  Yup. And if you, the template provider, had a GST number (you are a business or have sales over $30k), you would also be charging Microsoft the GST for the sale. It is not a problem for MS since they would just claim it back as an input tax credit and it would be net zero for them. Consumer pays GST to MS. MS pays GST to a GST collecting template provider. MS and template provider both pay GST to government, but MS gets an input tax credit for GST paid to template provider so that government doesn't double dip. This is what uber should be doing with their drivers but they prefer to have prices 5-15% lower than their competition by applying their own legal interpretation to Canada's tax laws.
  - MattRix 10y ago
    This is basically what happens on the Apple App Store, except that Apple submits the GST directly to the government on the behalf of the app creator. On paper it's the same as your example, it's just the GST money never actually goes into the account of the app creator.
    - run4yourlives2 10y ago
      It's likely that Apple is just forgoing the input tax credit in this case. They remit the GST on their sale and because they aren't charged any GST by the app creator, they don't look to offset. Now, the major issue here is that if the app creator is making $30K+, it is THEIR responsibility to charge GST, which means that if there is no mechanism to charge in addition to the price, it's automatically inclusive. The CRA doesn't care how you collect the tax you owe, they just care that you pay it. For a vast majority of app creators, $30K probably is a target they are on the lower side of, but I'd imagine people making a living on the apple store, the GST is coming out of their revenue directly. At least, that's how CRA would look at it. Now that being said, CRA might be treating this entire industry as an undefined gray area for the time being, particularly since they are getting the GST on the final sale by apple, but I don't think that will last long.

Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers - will they only have to pay taxes on their cut?

prolly_a_moron 10y ago

>Uber is essentially just a matcher and payment processor that takes a cut, they don't own vehicles or employ drivers That's the story their PR spins. Luckily they don't make the laws. You think this idea of, "He's not my employee, he's a contractor!" as a way to avoid employer obligations is new? That's a laugh, and it's the reason these laws exist.

problems 10y ago
But it's the truth - those Uber drivers don't get guaranteed work, they don't get hours, they don't get salary. Instead they find contracts via Uber and they keep their portion of the earnings. Just because Uber takes the payment makes them an employer? If Uber had the drivers take the payment and pay them out later would they not be an employer anymore? Seems like the exact definition of a contractor to me. I don't know how else you could define it really.
- run4yourlives2 10y ago
  Are uber drivers allowed to be Lyft Drivers or regular Taxi drivers? If so, you have a good argument that they are not employees. If not, they will be seen by the CRA as employees, regardless of anything else in place. If they are not employees, drivers are obliged to collect GST from Uber for their services if they earn more than $30K. If Uber re-sells that service, they are also obliged to collect GST from the end user. They can claim an input tax credit on the contractor's GST to offset. This is normal business operation in Canada, and one of the main reasons the HST was so popular - it moved all the multiple people charging and remitting taxes to one spot - the end sale. If Uber's contractors are determined to be employees, that's a major issue for them, because at that point they have a ton of CPP and EI to pay that they have not been doing. Really, they don't have much of an argument here either way. There is no real reason they should be tax exempt.
- nebabyte 10y ago
  > don't get guaranteed work Who does? And not all employees of every company are salaried. Some work on commission or other models.

run4yourlives2 10y ago

The consumer pays Uber. That is the point of sale. That is where the sales tax is collected. This isn't rocket science. To your - bad - analogy: If MS was selling templates created in word by you to a marketplace, you can bet that GST would be paid on them by the consumer to MS.

LammyL 10y ago
Yup. And if you, the template provider, had a GST number (you are a business or have sales over $30k), you would also be charging Microsoft the GST for the sale. It is not a problem for MS since they would just claim it back as an input tax credit and it would be net zero for them. Consumer pays GST to MS. MS pays GST to a GST collecting template provider. MS and template provider both pay GST to government, but MS gets an input tax credit for GST paid to template provider so that government doesn't double dip. This is what uber should be doing with their drivers but they prefer to have prices 5-15% lower than their competition by applying their own legal interpretation to Canada's tax laws.
- MattRix 10y ago
  This is basically what happens on the Apple App Store, except that Apple submits the GST directly to the government on the behalf of the app creator. On paper it's the same as your example, it's just the GST money never actually goes into the account of the app creator.
  - run4yourlives2 10y ago
    It's likely that Apple is just forgoing the input tax credit in this case. They remit the GST on their sale and because they aren't charged any GST by the app creator, they don't look to offset. Now, the major issue here is that if the app creator is making $30K+, it is THEIR responsibility to charge GST, which means that if there is no mechanism to charge in addition to the price, it's automatically inclusive. The CRA doesn't care how you collect the tax you owe, they just care that you pay it. For a vast majority of app creators, $30K probably is a target they are on the lower side of, but I'd imagine people making a living on the apple store, the GST is coming out of their revenue directly. At least, that's how CRA would look at it. Now that being said, CRA might be treating this entire industry as an undefined gray area for the time being, particularly since they are getting the GST on the final sale by apple, but I don't think that will last long.