Disclaimer: All information stated by evee in this article is general advice provided by the ATO. If you have any questions particular to your situation, please seek the professional advice from your accountant. If there are any discrepancies between our advice and the ATO's, please go with the ATO, as we are not notified when they update their guidelines and advice.
Tax and GST Overview
The Quick Answer:
You can find the ATO's helpful advice on how to declare your income and expenses for sharing your car for your tax return. Please read them carefully and see if it is applicable to your situation.
According to the ATO, the income earned from renting your car is assessable income and must be declared as part of your tax return. Certain expenses directly related to sharing your car can also be claimed as income tax deduction. These may include membership fees, availability fees, and car expenses. Please make sure to keep all records of expenses to claim deductions.
The ATO has also published other helpful articles related to the sharing economy:
- a brief overview the sharing economy and tax;
- how to declare sharing income and claiming deductions in your tax return; and
- more details on how to claim expenses related to renting your car.
It is very important to read these articles if you are sharing your car.
As the sharing economy is growing, the ATO has taken a keen interest in the sharing economy, and has made it clear that any income that you earn from renting your car out should be declared. The same applies if you’re not running your car sharing as a business or even with an intention to make a profit.
You can also speak with your accountant to get advice relevant to your situation.
How to get ready for tax-time?
- Read the ATO links above
- Keep a record of your car’s odometer the start and end of each financial year. If you start during a financial year, the start period is when you first share your car.
- Put a reminder in your calendar to check the odometer on 30 June & 1 July every year.
- Keep the receipts for any money you spend on your car - this includes car wash, charging, or paying for your rego renewal.
- Keep records of your payout and extra payment emails from evee. These can be considered to include GST. If you are a registered business for tax purposes and require an invoice for your payouts, you/your account will need to create tax invoices for each payout and address it to evee.
With this information, you’ll be able to choose the most beneficial method for claiming expenses on your tax return.
If you're not sure about your tax obligations, speak to your accountant.
Goods and Services Tax (GST), Australian Business Numbers (ABN) and companies
If you wish to register your car sharing activities for GST or for an ABN, please consult with your accountant. As with income tax, there's no one-size-fits-all solution. Your accountant will be able to provide you with professional advice for your individual situation.
If you're already registered for GST, let us know so we can adjust the tax rates for your car. Please follow the advice outlined above.