GST/HST information for taxi operators and commercial ride-sharing drivers

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Find out about the GST/HST for taxi operators and commercial ride-sharing drivers
Find out if you need to register for a GST/HST account
How to calculate the GST/HST included in a fare
How to calculate input tax credits (ITCs)
How to calculate the net tax

Find out about the GST/HST for taxi operators and commercial ride-sharing drivers

As a GST/HST registrant, you usually have to collect the GST/HST on amounts you charge for taxable supplies of property and services. However, in the case of a passenger transportation service supplied by a taxi operator or a commercial ride-sharing driver, tax is usually already included in the fares. For more information, see How to calculate the GST/HST included in a fare.

See examples of amounts charged by a taxi operator or a commercial ride-sharing driver

Examples of amounts charged by a taxi operator or a commercial ride-sharing driver

As a registrant, you can generally claim input tax credits (ITCs) to recover the GST/HST paid or payable on your business purchases such as gas, car repairs, and car washes.

You have to keep records of the amounts you pay or owe to support your ITC claims.

For more information, see the GST/HST info sheet GI-196 – GST/HST and Commercial Ride-sharing Services.

You also have to complete and file GST/HST returns according to your reporting period. This will be either annually, quarterly, or monthly.

When you complete your GST/HST return, you have to use the regular method of calculating your net tax, unless you tell us that you want to use the quick method.

Find out if you need to register for a GST/HST account

If you are a self-employed taxi driver or commercial ride-sharing driver who supplies taxable passenger transportation services, you must register for the GST/HST regardless of whether you are a small supplier. You are usually self-employed if you are in one of the following situations:

• you own your taxicab/motor vehicle
• you lease a taxicab/motor vehicle from an owner for a flat fee, either on a daily, weekly, or monthly basis
• you lease a taxicab/motor vehicle from an owner for a percentage of fares

If you are not sure whether you are self-employed or an employee, you can request a ruling to have your status determined by using Form CPT1, Request for a Ruling as to the Status of a Worker under the Canada Pension Plan and/or the Employment Insurance Act.

How to calculate the GST/HST included in a fare

The GST/HST is usually included in the fares for a passenger transportation service supplied by a taxi operator or commercial ride-sharing driver. For that reason, you may have to calculate the amount of GST/HST included in the fares.

See examples

Examples

To determine the amount of GST included in your fare, multiply the total fare by 5 and divide the result by 105.

To determine the amount of HST included in your fare:

• for 13% HST, multiply the total fare by 13 and divide the result by 113
• for 15% HST, multiply the total fare by 15 and divide the result by 115

For more details on the provincial GST/HST rates, go to GST/HST rates.

How to calculate input tax credits (ITCs)

You can claim ITCs for the GST/HST paid or payable on your business purchases such as:

• gasoline, diesel fuel, and propane
• vehicle repairs, maintenance, and washes
• vehicle leases and purchases

You cannot claim ITCs for insurance costs or interest as they are not subject to the GST/HST.

You cannot claim ITCs on most of your business purchases if you use the quick method.

You may be able to use the simplified method for claiming ITCs. For more information, see Simplified method to claim input tax credits.

How to calculate the net tax

As a taxi operator or commercial ride-sharing driver, you need to calculate your net tax to file your GST/HST return. There are two ways to calculate your net tax – the regular method and the quick method.

If you use the regular method, you total the GST/HST you charged or collected and deduct your ITCs from this amount. The difference between these two amounts, including any adjustments, is your net tax. If you charged or collected more GST/HST than was paid or payable on your business purchases, you send us the difference. If you charged or collected less GST/HST than was paid or payable, you can claim a refund.

There is also the simplified method to claim ITCs, which can be used by most small businesses. For more information, see Simplified method to claim input tax credits.

The quick method is another method for calculating the net tax. You can use this method if your annual taxable sales, including those of your associates, are no more than $400,000 (including GST/HST and zero-rated supplies) in any four consecutive fiscal quarters over the last five fiscal quarters. You can start using it at the beginning of any reporting period.

For more information on the net tax calculation, see Calculate the net tax to complete a GST/HST return.

Date modified:

2017-06-30