Commercial passenger vehicle service levy - frequently asked questions
The Victorian Government has introduced major changes to the commercial passenger vehicle industry. The changes mean the taxi and hire car industry, including rideshare services, operate under an aligned set of rules.
Here are the answers to some frequently asked questions:
- What is the commercial passenger vehicle service levy?
- When does the levy start?
- How do I know if I have to register for the levy?
- Who pays the levy?
- When is a driver an employee?
- I am liable to pay the levy – what should I do?
- When do I have to register?
- I provide a booking service but haven’t registered with Commercial Passenger Vehicles Victoria; do I have to register for the levy?
- Can I pass the cost of the levy on to customers?
- Does GST apply on the levy?
- When do I count a passenger service transaction for an advance booking?
- What if I take a booking but pass it on to another business to complete?
- How long do I have to keep records?
- What if a trip has multiple stops?
- What if there are multiple cars involved in a booking?
- What if I take a booking but the trip never eventuates?
- Does the levy apply to deliveries, such as food deliveries?
- Does the levy apply to buses?
- Does the levy apply to motorcycles?
- Who collects the levy?
- What are my rights and responsibilities as a customer?
A $1 levy on every taxi and hire car trip, including ride share, originating in Victoria.
1 July 2018.
You can use our online tool to help you determine whether you have to register for the levy.
If a trip is booked, the business taking the booking is liable for the levy.
If a trip starts at a rank or when a vehicle is hailed by a passenger, the driver must pay the levy, unless they are employed by the owner of the vehicle, in which case the owner is liable.
Businesses that are based outside of Victoria are still liable for the levy on any trip that originates in Victoria.
Asim has a driver agreement with the owner of a taxi (also known as a bailment agreement). Under the agreement, he drives a taxi and returns the taxi to the owner later, but he is not an employee of the taxi’s owner.
- If Asim picks up a customer at a rank or when he is hailed by a passenger, he must pay the levy.
- If Asim picks up a customer who booked the trip over the phone, the booking service the customer booked the trip through must pay the levy.
Sam provides trips using her own car.
- If Sam picks up a customer at a rank or when she is hailed by a passenger, she must pay the levy.
- If Sam picks up a customer who booked the trip over the phone, the booking service the customer booked the trip through must pay the levy.
Rahul is employed by ABC Pty Ltd which also owns the vehicle he drives.
- If Rahul picks up a customer who hailed him on the street, ABC Pty Ltd must pay the levy.
- If Rahul picks up a customer who booked the trip over the phone, the booking service the customer booked the trip through must pay the levy.
The Commercial Passenger Vehicle Industry Act 2017 does not define the term employee. In most instances it is not difficult to determine if a person is an employee or a contractor.
If it is unclear whether the person is an employee or a contractor, a number of significant factors (established by the courts) should be considered. These include:
- control and direction,
- contract and practical relationship,
- contracts to achieve a ‘given result’,
- independent business,
- power to delegate,
- whether the person bears risk around thing like profit and loss, and
- provision of tools and equipment.
In considering these factors, it should be noted that numerous court decisions have held that the totality of the relationship between the parties must be taken into account before deciding whether a worker is an employee or an independent contractor; that is, a determination cannot be made on the basis of a limited, or selective, number of factors.
If uncertainty exists, contact us to obtain a ruling.
Taxi and hire car businesses, including ride share, must register with the State Revenue Office online.
If you are new to the industry, please complete your registration before the end of the first quarter you begin operating.
As part of the registration process you must tell us what service or services you provide, there are three types of registration:
Rank and hail work, where you pick up customers from ranks or when hailed on the street.
Also known as unbooked commercial passenger vehicle services.
A booking service, where you take bookings for commercial passenger vehicles.
Includes previously accredited Network Service Providers.
A service to lodge returns and pay the levy on behalf of others for their rank and hail work.
This service must be based on a formal affiliation agreement with the trip provider.
You need to submit separate returns for each registration type, so it is important to only select the type of service you provide.
Registering for the levy is a separate process to registering with Commercial Passenger Vehicles Victoria (formerly Taxi Services Commission). Contact Commercial Passenger Vehicles Victoria for information about your regulatory obligations.
Lodge a quarterly return
Once registered, you must use our online portal to submit a return and pay the levy every quarter (four times a year). You must lodge your return within 30 days of the end of each quarter.
Completing a return involves reporting the number of trips attracting the levy in each quarter and paying the levy. It is a matter for you to keep a record of all your trips so you can complete your return.
We will send emails reminding registered businesses when a return is due.
Will I need to upload supporting documentation?
If you are registered as a service lodging returns and paying the levy on behalf of others for their rank and hail work you will need to attach a CSV file listing the following information:
- the name of the driver,
- their ABN,
- their driver accreditation number, and
- the total number of trips they completed in the quarter.
Those who have registered as booking service providers or rank and hail only need to enter the number of trips completed in the quarter.
You must register before the end of the first quarter in which you begin operating. For existing businesses, this means you must register by 30 September 2018. This applies to all businesses that:
- take bookings,
- pick up passengers from ranks or when hailed but have not arranged for another business to administer the levy on their behalf, or
- administer the levy on behalf of other services.
I provide a booking service but haven’t registered with Commercial Passenger Vehicles Victoria; do I have to register for the levy?
Yes, you are still liable for the levy and must register.
You can choose to absorb the cost of the levy or pass it on to customers by increasing fares.
If you choose to pass the cost on to customers:
- It is subject to GST because GST applies on the full-fare of any trip.
- You must ensure you comply with all industry requirements, including those prescribed by the Commercial Passenger Vehicle Industry Regulations 2018, which deal with fares and other charges.
GST does not apply to the levy. However, GST applies on the full-fare of any trip, so if a business passes the cost of the levy on to its customers via increased fares, it is part of the full-fare subject to GST.
The GST component is not paid to the State Revenue Office.
A trip should be included in your return for the quarter in which it occurs. For example, if you take a booking on 28 June 2018 for a passenger service that takes place on 8 July 2018, you should include this passenger service transaction in your return for the July - September 2018 quarter (which you will lodge in October 2018).
If a business takes a booking, it must pay the levy even if that booking is passed on to another business. This is irrespective of:
- why the booking was passed to another business,
- which business takes payment from the customer, or
- whether the business that takes the booking is paid for the referral.
However, if a business refers a person to another business without taking a booking, it is not liable for the levy. For example, if a hire car business receives a booking request but advises the caller that it is unable to take the booking and refers them to another hire car business, it does not have to pay the levy.
You must keep records to support your levy returns for five years. This is in accordance with the Taxation Administration Act 1997.
Where there are multiple fares
If a trip involves passengers being charged separately, the $1 levy is payable for each separate charge. These are sometimes referred to as multiple hire trips.
Where there is a single fare
If a trip involves one fare but has multiple stops, such as a wedding car that stops at the ceremony, photograph locations and the reception, a single $1 levy applies.
If there are multiple cars involved in a service, the levy is payable for each car used. For example, if wedding car company uses three cars to transport a bridal party, it must pay the levy on each car ($3 in total).
If you take a booking but the trip never eventuates, you are not liable for the levy.
No. The trip has to involve at least one passenger.
No, the levy does not apply to buses.
Yes, it applies to motorcycles where:
- there is a passenger, and
- a fare is charged.
The Commissioner of State Revenue is responsible for administering the levy, including collecting payment.
We will be enforcing the levy and ensuring it is paid by both taxi and hire-car services, including ride share. Businesses that do not pay the levy when it is due may incur interest and penalties.
Commercial Passenger Vehicles Victoria has information on your rights and responsibilities as a passenger in a commercial passenger vehicle.
Contact us for information about registration, quarterly returns, payment and administration of the levy.
Information about industry reforms, accreditation and standards is available from:
- Commercial Passenger Vehicles Victoria,
- Transport for Victoria, and
- in the Commercial Passenger Vehicle Industry Act 2017.