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Businesses will no longer be taxed for using Uber and rideshare companies in good news for business travellers

Sharon Masige
  • The federal parliament has passed an amendment that allows rideshare companies to be exempt from the Fringe Benefits Tax (FBT).
  • It puts the likes of Uber, DiDi and Ola on equal footing, at least in the eyes of the taxman, for the first time.
  • It effectively makes rideshare companies a less expensive option for businesses if they choose to use them in lieu of taxis.
  • Visit Business Insider Australia’s homepage for more stories.

The federal parliament has passed an amendment which allows rideshare companies to be exempt from the Fringe Benefits Tax (FBT) for the first time.

The change to the FBT Assessment Act means tax, payable on perks offered by employers, will be scrapped on rides from the likes of Uber, DiDi, and Ola.

It puts rideshare companies on equal footing with taxi companies who have long been exempt from the tax, which is applied to workplace perks like free gym memberships.

As a result, businesses will be able to claim the same tax benefits as if they had used taxis instead, making it a cheaper option for business travellers.

Foster said the change allows businesses to save money on employee transport and cut down on the administration involved when doing trips.

"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," Uber for Business Country Manager, Australia and New Zealand Georgia Foster said in a statement. "The change represents an update to legislation created that did not anticipate advancements in transport options."

When rideshare companies like Uber started springing up in Australia, the ATO deemed that cars used for ridesharing services are not taxis and are therefore subject to the FBT.

"The FBT exemption for taxi travel was originally introduced in 1995 to ensure employers were not unduly penalised for providing safe transport for employees - for example, after hours travel or travel home for sick employees," Foster said. "However, at that time, ridesharing did not exist."

The extension of the FBT exemption to ridesharing companies comes as Aussies start looking to go back to work, and rideshare companies begin reporting an uptick in demand.

The move may just send some more business their way.