What You Need to Know about Taxes and Passenger Transportation in Québec
Whether you encourage your team to carpool to work to lower your company’s carbon footprint or if you drive an Uber as a side gig, you must report to Revenu Québec. Let’s take a closer look at your obligations.
Carpooling is a great way to bond with co-workers while producing less carbon emissions, but carpooling can come at a cost. Coworkers may chip in to help pay for gas. If you are on the receiving end of compensation for being in a carpool, you do not have to report it as income as long as the amounts only cover the transportation costs. You would report income if you profited from being a carpool driver.
The same goes for drivers that operate through rideshare programs booked online (not counting driving for established corporations like Uber or Lyft). If your compensation is equal to expenses, no reporting is needed but if the compensation turns into earnings, it is considered income.
Limo and Taxi Service
You may not operate a taxi or limo in Québec without first being registered to collect and remit GST and QST, even if your sales are below $30,000 during the fiscal year. Additionally, you must report all of your business income, regardless of the amount.
Limo and taxi drivers must use what is called accrual accounting. This means reporting income (whether or not the income was received) and deducting expenses (whether or not you paid your expenses) during the fiscal period in which the income and expenses occurred.
Some professional drivers have access to tax credits, which can be read about in further detail on the Revenu Québec website.
Revenu Québec considers Uber drivers to be self employed. Therefore, you are viewed as a sole proprietor. You must report your income using the accrual method noted above.
While you must also register for GST and QST, Uber Canada Inc. and Rasier Operations B.V. collects and remits GST and QST on your behalf. Limitations apply; visit Revenu Québec’s Uber Drivers page for more details.
Don’t Fall Behind in Your Reporting
Life is busy! We understand that, but being busy isn’t a good excuse for falling behind on your reporting where Revenu Québec is concerned. One way to ensure you remain compliant is to contact us at AF Accounting.
We have the services you need from tax advice and planning and virtual CFO, to year end accounting – and more. You don’t need to be a large corporation to enjoy the services of a business accountant. Tax law can be confusing and frustrating, and the deadlines for filing sneak up on you very quickly. Focus on your business and let us focus on the bookkeeping and accounting. We are here to help so you can work on being profitable.
To learn more about how AF Accounting supports small businesses in Canada, visit us online at afaccounting.ca. For more small business advice, stay tuned to our blog.