Ride-Sharing Services

Notice to the reader 

This measure has received Royal Assent. 

1. What does Budget 2017 propose to change?

To ensure that the GST/HST applies consistently to taxi services and ride-sharing services, Budget 2017 proposes to amend the definition of "taxi business" for GST/HST purposes to also include commercial ride-sharing services.

A "taxi business" is currently defined to mean a business carried on in Canada of transporting passengers by taxi for fares that are regulated under the laws of Canada or a province. Budget 2017 proposes to amend the definition of a "taxi business" to generally include a business of transporting passengers for fares by motor vehicle within a municipality and its environs if the transportation is arranged or coordinated through an electronic platform or system, such as a mobile application or website.

2. When is the amendment proposed to become effective?

The amendment is proposed to become effective July 1, 2017.

3. What is the impact of the proposed amendment on providers of commercial ride-sharing services?

As a result of the proposed amendment, effective July 1, 2017, all providers of commercial ride-sharing services would be subject to the special GST/HST rules that currently apply to all taxi operators. By this date, self-employed commercial ride-sharing service drivers would be required to be registered for GST/HST purposes, even if their annual taxable ride-sharing revenues do not exceed the small supplier threshold of $30,000, and to collect GST/HST on those services.

Such drivers who are small suppliers would only be required to be registered in respect of their ride-sharing service activities. However, they may choose to have their registration also apply to their other commercial activities. 

Additional information regarding the obligations and entitlements of businesses that are GST/HST registrants can be found here.

4. How can a commercial ride-sharing service driver register for a GST/HST account?

The simplest way to register for GST/HST purposes is to use Business Registration Online. However, if you already have a business number (BN), for example as a result of having claimed a rebate, you will have to use another means of registration such as by mail or phone.

5. Can a commercial ride-sharing service driver register now for a GST/HST account even though the amendment is not proposed to come into effect until July 1, 2017?

Yes, commercial ride-sharing service drivers are encouraged to register as soon as possible. When applying for registration, a commercial ride-sharing service driver may request that the registration only become effective as of the proposed July 1, 2017, effective date.

6. Where can a person get more information on the proposed change?

The CRA is committed to providing taxpayers with up-to-date information. The Notice of Ways and Means Motion can be viewed on the Department of Finance Canada website. The CRA also encourages taxpayers to regularly check its website www.cra-arc.gc.ca.

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