Uber ignores Australian Taxation Office deadline
Australian Uber drivers had until August 1 to register for the Good and Services Tax (GST), but Uber has lodged legal action against the Australian Taxation Office (ATO) to have this overturned. In May, the ATO issued a directive advising that those providing a ride-sharing service needed to have an Australian Business Number and be registered for GST. However, Uber lodged documents to the Federal Court last Friday arguing that the public issue by the ATO "unfairly targets Uber's driver-partners". An Uber spokesperson told ZDNet that it believes the ATO's guidance should not have been issued, given that a federal tax review is currently underway.
Just a few hours after news broke that Uber was taking legal action against the Australian Tax Office to prevent drivers from being forced to pay GST, the company closed another funding round in the US that values it $US51 billion. This is one of the biggest valuations achieved by a privately held, venture capital backed startup (if Uber, which has 3,500 employees around the world now can still be called a startup) in corporate history. "Unicorn", the term applied to tech startup companies that achieve a valuation of $US1 billion or more, is probably a better description.

There's is a very simple reason Uber, the highly popular, highly controversial app enabled ride sharing company, is prepared to so brazenly challenge the Australian Tax Office . It has the financial resources to do so.

The funding round also means Uber has now raised $US6.5 billion ($8.9 billion) from investors, which include some of the most powerful technology companies in the world, including Google, China's Baidu and now Microsoft.

It is not entirely clear why Uber needs so much money. Sure. it's probably losing money at the moment, which is not unusual for a fast growing tech company in hyper-expansion mode - although its established markets are thought to be profitable. And it's spending billions expanding into key regions such as India, and has other costs like commercial insurance and app development to fund. But it seems pretty clear it has more than enough financial resources to fight expensive legal battles around the world, including in Australia.

The ATO is standing firm, insisting that Uber's ridesharing drivers must pay GST on a monthly or quarterly basis, which it has been warning them about for months. Uber disagrees, arguing that old laws do not cover ridesharing, and that drivers for that product should only be required to pay GST once their turnover exceeds $75,000. ​"We believe all our driver-partners should pay their appropriate share of tax and meet their tax obligations," it said in an emailed statement. "However, we feel they have been unjustly singled out by the ATO for different tax treatment than truck drivers, bike messengers, Airbnb hosts or any other participant of the sharing economy"

The impasse is shaping up to be an important test case for how Australian authorities deal with companies in the so-called sharing economy. It is also another test for the ATO's resolve against a high profile technology company based overseas. The likes of Apple and Microsoft have been heavily criticised for using profit shifting techniques to avoid paying local tax. So get your popcorn ready and enjoy the show.