Most businesses must register for a GST/HST account (and therefore collect and remit GST/HST as appropriate) if they earn revenues from worldwide taxable supplies greater than $30,000 within the previous four consecutive quarters, or exceed the $30,000 threshold in a single calendar quarter. However, a special rule applies to self-employed taxi businesses which requires them to register regardless of the quantum of revenues.
There has been some uncertainty as to whether drivers of ride-sharing services, such as Uber, are considered taxi businesses.
The 2017 Federal Budget ended this uncertainty. It proposed that, effective July 1, 2017, ride-sharing services will be defined as a taxi business for GST/HST purposes and therefore will be required to charge and remit GST/HST. More specifically, a taxi business will now include all persons engaged in a business of transporting passengers for fares by motor vehicle within a municipality and its environs where the transportation is arranged for or coordinated through an electronic platform or system, such as a mobile application or website.
Action Item: Drivers of ride-sharing services should consider registering for GST/HST.