Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Canada seeks to end Uber's tax advantage over taxi companies

reuters.com

Post reply on HN
Print view View original

171–180 of 185 posts

Re: Canada seeks to end Uber's tax advantage over taxi companies

#171

Post by rdiddly »

jimmywanger wrote: post #169
rdiddly wrote: post #151

Earlier quoted context omitted.

They need to collect GST because a Good or Service is being provided and that's what the Tax covers.

You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status…

I'm deliberately ignoring your point actually, because it's moot. The law is being changed to eliminate your first case (independent small suppliers) and declare those services to have been provided by a single entity (Uber). Both sides of your debate are now one.

There's a certain amount of circular reasoning inherent here, because a government ministry made a declaration. It's not just an objective observation of reality, it's a declaration of what that reality will be henceforth.

Was it a good decision? In my opinion yes, because it better reflects the original intent of this particular tax. Anyone trading on the brand-name of "Uber" and using Uber's infrastructure is not a small supplier (who has to build and market their own brand and build their own infrastructure). And they are clearly supplying a good or service, which was my point expressed in embryonic form above, so they can go ahead and collect the tax.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#172

Post by rdiddly »

jimmywanger wrote: post #169
rdiddly wrote: post #151

Earlier quoted context omitted.

They need to collect GST because a Good or Service is being provided and that's what the Tax covers.

You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status…

I'm deliberately ignoring your point actually, because it's moot. The law is being changed to eliminate your first case (independent small suppliers) and declare those services to have been provided by a single entity (Uber). Both sides of your debate are now one.

There's a certain amount of circular reasoning inherent here, because a government ministry made a declaration. It's not just an objective observation of reality, it's a declaration of what that reality will be henceforth.

Was it a good decision? In my opinion yes, because it better reflects the original intent of this particular tax. Anyone trading on the brand-name of "Uber" and using Uber's infrastructure is not a small supplier (who has to build and market their own brand and build their own infrastructure). And they are clearly supplying a good or service, which was my point expressed in embryonic form above, so they can go ahead and collect the tax.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#173

Post by jimmywanger »

rdiddly wrote: post #171
jimmywanger wrote: post #169

Earlier quoted context omitted.

You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status…

I'm deliberately ignoring your point actually, because it's moot. The law is being changed to eliminate your first case (independent small suppliers) and declare those services to have been provided by a single entity (Uber). Both sides of your debate are now one. There's a certain amount of circular reasoning inherent here, because a government ministry made a declaration. It's not just an objective observation of r…

If you look at the context of the thread, the parent basically said that the old laws should have applied to Uber and that they should have been collecting taxes all along but wasn't by exploiting legal loopholes.

My point is that Uber did not have to pay taxes, and their obligation to collect taxes was unclear. Under the new law they have the collect taxes. Under the old law, it was plausible that they didn't.

The main takeaway is that most aspects of the legal system, including definitions for commonly accepted terms, are not actually clear.

Especially your argument on intents of taxes. I don't believe that brand-name and infrastructure alone make an employee out of an independent contractor. Also, based on your brandname and infrastructure arguement, should people who sell handicrafts on Etsy or Amazon be classified as employees of Amazon and be forced to pay GST on all sales?

Re: Canada seeks to end Uber's tax advantage over taxi companies

#174

Post by jdmichal »

jimmywanger wrote: post #169
rdiddly wrote: post #151

Earlier quoted context omitted.

They need to collect GST because a Good or Service is being provided and that's what the Tax covers.

You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status…

OK, lets take as granted that the service is actually being provided by the drivers and not Uber, who is just acting as a facilitator of the payment. I would still argue that they should have owed taxes all along, because even in that case they are providing a service. It's just that the service they are actually providing is to the drivers -- matchmaking and payment collection. So the cut they take from the drivers should have been taxed all along.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#175

Post by run4yourlives2 »

problems wrote: post #145
prolly_a_moron wrote: post #72

Earlier quoted context omitted.

> 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.

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…

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.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#176

Post by run4yourlives2 »

jmcdiesel wrote: post #106
run4yourlives2 wrote: post #73

Earlier quoted context omitted.

>Driving someone around shouldn't be so complicated. Until someone gets driven 60 miles out of town on the way to the airport and left there unless they have a "special" fee... It's almost as if these regulations were put in place for a reason.

Ok, how do these regulations help that? Taking someone somewhere against their will is already illegal, which of these extra laws (and taxes) prevent that? The result would be the same in either case - the driver would be held accountable for, basically, kidnapping and extortion, and you'll be left either short more money or stranded 60 miles out of town. A regulation in place isnt going to prevent someone from doing…

>Taking someone somewhere against their will is already illegal, which of these extra laws (and taxes) prevent that?

For the same reason that regulations help in all sorts of areas; you pre-vet the people authorized to do the service to reduce the likelihood of this occurring. It's exactly the same as regulating doctors, lawyers, financial planners, truck drivers, teachers, daycare workers etc, etc, etc.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#177

Post by jdmichal »

thaumasiotes wrote: post #76
ribosometronome wrote: post #35

Earlier quoted context omitted.

When you buy a book from a seller on Amazon, who sets the price?

Just as you'd expect if Amazon was a physical bookstore - the store sets the price. Did you think authors were employees of Barnes and Noble?

That wasn't the question.

> When you buy a book from a seller on Amazon, who sets the price?

The answer is that the seller always sets the price. Sometimes the seller is Amazon itself, and other times it's not.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#178

Post by run4yourlives2 »

MattRix wrote: post #142
LammyL wrote: post #129

Earlier quoted context omitted.

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 g…

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.

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.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#179

Post by jimmywanger »

jdmichal wrote: post #174
jimmywanger wrote: post #169

Earlier quoted context omitted.

You're missing the point, and begging the question. If the good or service is being provided by a non-taxi contractor who makes less than 30k a year, then you don't have to collect the GST and the tax doesn't cover that. If the good or service is being provided by Uber, a non-contractor who makes over 30k a year, then you have to pay the tax. What we're debating here is who provides the service and their legal status…

OK, lets take as granted that the service is actually being provided by the drivers and not Uber, who is just acting as a facilitator of the payment. I would still argue that they should have owed taxes all along, because even in that case they are providing a service. It's just that the service they are actually providing is to the drivers -- matchmaking and payment collection. So the cut they take from the drivers…

The verbiage says the GST applies to goods and services bought in Canada. Also there's some sort of credit you can deduct, which bears further looking into, based on the goods and services you consume and pay GST on.

Basically, the taxation law is unclear, because you could easily argue that the service is purchased in the United States, where the Uber servers and the internet connections are. In that case, we're talking about Uber not really being a Canadian company, just that it has subcontractors working in Canada, making it exempt from taxes.

It seems like a lot of people have already decided whether or not Uber should be paying taxes, and now are retroactively applying logic to justify their original decision.

Re: Canada seeks to end Uber's tax advantage over taxi companies

#180

Post by _jal »

sten wrote: post #166
_jal wrote: post #137

Earlier quoted context omitted.

> Uber has been able to provide a competitive service by legally structuring themselves in a way maximizes return for the themselves, for the driver, but still keeps costs low client due to say structuring. In fact, they haven't. They're taking a huge loss on subsidies to the fares.

That the maximum is a loss doesn't negate it's place as the maximum. They could do worse for themselves. A house could burn down faster.

Of course. I was pointing out that they are not keeping costs low. They are just unsustainably subsidizing them.
Post reply on HN