The sharing economy has grown significantly over the last few years with the likes of Uber and Airbnb becoming a popular way for taxpayers to top up their income.

However, with lack of reporting requirements, there is a risk that some sellers who use these platforms are not reporting their full income or paying the right amount of tax.

The government is looking to legislate a new compulsory reporting regime which will require share economy platforms, such as Uber and Airbnb to report information on all transactions to the ATO. This will be in the same way that the Taxable Payments Reporting System is being applied across other industries already.

The aim of this reporting regime is to help ensure that the sharing economy sellers are meeting their tax obligations and that they do not have an unfair advantage compared to similar activities due to poor tax compliance.

Who will be required to report?

  • Operators of an electronic service (e.g., Website, internet portal, app) that allows buyers and sellers to transact

Which transactions are required to be reported?

  • Transactions for all services unless an exemption applies
  • Transactions for the sharing or loaning of assets unless an exemption applies

The following transactions are exempt from the new reporting requirements:

  • Where only the title/ownership of goods are exchanged
  • Financial supplies
  • Relating to the transfer of ownership of real property
  • Where the service, loaned assets or property does not take place in Australia
  • Subject to another tax reporting requirement
  • Arising from online classifieds, listing, or advertising service
  • Where the seller is also the operator of the platform

Platform operators will be required to report transactions that occur on or after:

  • 1 July 2023 for ride-sourcing or short-term accommodation services unless an exemption applied
  • 1 July 2024 for all other share economy transactions unless an exemption applies

The information required to be reported will be specified by the ATO but, at a minimum, will include the seller’s identification information and the aggregate of the transactions relating to the seller over the reporting period.

The ATO has indicated that it would look to require reporting on a bi-annual basis with information to be reported by 31 January and 31 July and will need to be reported via an approved form set by the ATO.

Once the reporting regime is legislated and implemented, it is argued that it will send a clear message to sharing economy participants that in most cases payments they receive will be taxable. If you want to know more about your tax planning, please contact your local RSM adviser today.

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