Hello and welcome to this presentation on the Commercial Passenger Vehicle Service Levy.
Our agenda today will cover six key areas. First, an introduction to the State Revenue Office. Who we are, and what role we play. Secondly, we will break down the levy – what is it, when will it start, how much it is etc. Then we will move on to the important topic of who is required to pay the levy.
Fourthly I will take you through the five minute registration process, I’ll then take you through the quarterly return process. And finally, I will provide you with links to various resources and helpful information. Let’s get started.
The State Revenue Office is Victoria’s major revenue collection agency. We administer a range of legislation on taxes, duties, levies, grants and subsidies on behalf of the Victorian Government. The levies, taxes and grants that we administer include the Commercial Passenger Vehicle Service Levy, Congestion Levy, Land Tax, Payroll Tax, Land Transfer Duty and the First Home Owner Grant.
Now let’s break down the levy and explain it in detail.
From 1 July 2018, a $1 levy has been introduced in Victoria on every taxi and hire car service – including ride share – that originates in Victoria. The State Revenue Office has been tasked with collecting, administering and enforcing the levy on behalf of the government – and is the point of contact for industry bodies and levy payers when it comes to declaring and paying the levy.
The Commercial Passenger Vehicle Service Levy forms just one small part of the Victorian Government’s package of industry reforms to establish a single commercial passenger vehicle industry.
The levy will help to recover the cost of transitional assistance provided to certain industry participants, and partly fund the regulation of the industry.
The levy is self-reporting – and we are supporting businesses with education resources, as well as easy and efficient registration, lodgement and payment processes.
The levy applies to all commercial passenger vehicle service transactions that originate in Victoria. For the service to attract the levy it must include the carriage of one or more passengers.
There are many different operational scenarios for commercial passenger vehicle trips in Victoria – let’s break it down into who pays and why.
The first thing that needs to be established is whether a trip was booked or unbooked. If a trip is booked, it is the booking service provider who is liable for the levy in this instance.
Where a trip is un-booked, also known as ‘rank and hail’ work where the passenger is picked up from the street or the rank – the driver is liable to pay the levy – unless they are an employee of the vehicle’s owner, in which case it is the owner that is liable.
An unbooked trip provider (whether they are a driver, or a vehicle owner) can enter into an affiliation agreement with a booking service provider – where the booking service provider will report and pay the levy on their behalf I’ll cover this in more detail when I get to the content about registration, and the processes to follow where these arrangements exist.
I’ve got four examples to go through covering some common scenarios.
First, let’s look at a Bailment Agreement and how the levy applies. In the example, Asim has a bailment agreement with the owner of the taxi which sees him drive a taxi and return it to the owner. However he is not an employee of the vehicle’s owner.
Now we have to look back to the fundamental question, are the trips booked or unbooked? If Asim picks up a customer at a rank, or when he is hailed, Asim has to pay the $1 levy on each trip.
However if the trip is booked, for example through an app, or over the phone by a booking service provider, it is the booking service provider that has to pay the levy on the booked trips.
On to our second scenario now – Sam provides trips using a car that she owns. Again we go back to the fundamental question, are the trips booked or unbooked?
Sam has to pay for any rank and hail trips that are unbooked. For any trips that Sam takes from a booking service provider – the booking service provider has to pay the levy.
On to example number three. Rahul is an employee of the owner of the car, ABC Pty Ltd. We still need to return to the question – are the trips booked or unbooked? This is the scenario where things are a little bit different. Instead of Rahul having to pay the levy for the rank and hail trips, because he is employed by the owner of the vehicle, it is the owner, ABC Pty Ltd which must register for and pay the levy on the unbooked trips.
Booked trips are treated in the usual way – the levy is paid by the booking service provider.
On to the final scenario, a driver, Marcus, takes booked work through a booking service provider. Where this is the case, only the booking service provider needs to register for and pay the levy. However if at any time Marcus takes any unbooked work he needs to register for, and pay the levy.
Registration, and when you have to register is coming up shortly.
A common question is, can you pass on the levy? In short, the answer is yes. You can choose to either absorb the $1 cost of the levy, or pass it on to customers by increasing fares.
If you choose to pass it on there are a couple of things to note. First, you must comply with all industry requirements relating to fares, including those prescribed by the Commercial Passenger Vehicle Industry Regulations. Second, GST applies to the $1 charge, because GST is applicable to the full fare of any service.
The GST that you collect is not paid to the State Revenue Office as it is a federal tax. We only collect the $1 levy on behalf of the Victorian Government.
Now that we’ve covered the different scenarios explaining who is liable, let’s go through the registration process.
The process of registration is completed online using our online portal at sro.vic.gov.au/triplevyregistration. The portal is available from 1 July 2018. You do not need a computer to register. The process can be completed on your smart phone or tablet.
If you are liable to pay the levy, you need to complete your registration before the end of the first quarter, (end of September 2018), or if you start up a commercial passenger vehicle service business after 1 July 2018, before the end of the first quarter in which you begin operating. The registration process consists of three components – all on the one screen. A couple of quick declarations that you are authorised to complete the registration, and that the information you are about to provide is complete and correct. Then, on to the section where you provide your details. Standard name, email and phone number information, and then your ABN.
When you enter your ABN the details of your business will pre-populate into the registration.
The third component of the registration is where you need to elect what type of service provider you are. There are three check boxes, and you can select one or more – depending on your circumstances.
The first is a registration for rank and hail work. These are the unbooked trips I talked about earlier. If your business provides unbooked trips, or if you own a vehicle and your employee or employees provide unbooked trips you need to tick this registration box.
The next check box is for a booking service. If your business provides a booking service, for example takes bookings over the phone, through a website, or perhaps using an app, then you need to tick this registration box.
The third check box is for scenarios where you are a service that has agreed to lodge and pay the levy on behalf of others for their rank and hail work. This is known as an affiliation agreement. You could have an affiliation agreement with one or many drivers or vehicle owners.
The registration only requires your business to register once. As part of the registration you need to enter your Commercial Passenger Vehicle Commission registration ID – formerly the Taxi Services Commission.
Finally enter the date of the first trip after the levy commencement date of 1 July 2018, and select ‘register your business’.
Once you submit the registration to the State Revenue Office you will receive a confirmation email containing instructions about what to do next.
The following steps will include the State Revenue Office contacting you via email with your customer number and instructions to set up a password. You need to set up the account within three days of receiving the email, so keep an eye on your inbox.
Now let’s move on to some information about the quarterly return process.
The lodgement and payment process is straight forward. Once you are registered you will log in to our online portal four times a year to submit your returns and pay the levy. The screens and options available to you will depend on the type of registration you created when you ticked one or more of the three registration boxes.
You need to lodge a separate return for each registration category that you select.
In these returns you will be declaring the total number of trips made that quarter which attract the levy. Where you are taking advance bookings in one period, but carrying out the trip in another you need to declare the trip in the period when the trip actually took place.
Some industries will complete work where there are multiple stops. For example a wedding, where a car takes the bridal party to the ceremony, photograph locations and then on to the reception. Even though the vehicle is stopping across the journey, the levy payable would only be $1 for the entire service.
Where there are multiple cars involved in the service, again going back to the wedding scenario the levy is per car – three cars booked for a wedding equates to $3 in total. Remember that the option to pass the levy on to the customer is there, or the business can choose to absorb the levy.
You are required to keep detailed records. The detail in the records mirrors your existing record keeping obligations. However you need to remember that you must hold these records for five years. This is a requirement under the Taxation Administration Act of 1997.
Are electronic records sufficient? Yes. You can keep your records electronically. You don’t need to maintain paper records.
Once we reach September, and you are registered for the levy, you need to lodge your return within 30 days of the end of the quarter. If you don’t we may issue a default assessment, which could attract interest and penalties.
Of course you have the right to object to an assessment, which you can do through our online portal.
If, at any time, you want to update your registration type, or your contact details, you can do so through the online portal using your user name and password which you would have received once you registered.
To wrap up today, let’s take a look at the resources available to you.
Up to date information about the levy can be found at sro.vic.gov.au/triplevy including:
- answers to the most frequently asked questions,
- a translation service for languages other than English,
- instructions and guides on registration and lodging returns, and
- some how-to videos that take you through the levy.
You can also choose to receive levy updates by email at sro.vic.gov.au/subscribe.
That brings me to the end of the presentation for today. If you have any questions please contact us, through the contact us portal on our website. You can give us a call on 13 21 61. Or visit sro.vic.gov.au/triplevy.