The Federal Government has released a consultation paper seeking views on the possible characteristics of a reporting regime to provide information on Australians who receive an income from sharing economy websites.
As part of the 2018–2019 Federal Budget, the government announced that it would consult stakeholders on how it could implement the Black Economy Taskforce recommendation for a sharing economy reporting regime. The Taskforce heard that as the sharing economy grows, there is an increasing risk that sellers (participants selling goods and services via sharing economy platforms) may not be paying the right amount of tax.
The consultation paper notes that the ATO has limited information about the income of sharing economy sellers. This transparency gap, where many sellers are not familiar with their tax obligations, is "not a desirable outcome". In Australia's self-assessment tax system, while education and guidance on tax obligations is important, "the absence of a comprehensive reporting framework for workers poses risks of non-compliance".
Some of the questions posed in the paper include:
- Do there need to be changes to existing reporting requirements as they relate to sellers in the sharing economy? Is a separate reporting regime required?
- In what circumstances would it be appropriate to require sharing economy platforms to regularly report information about the activities of platform sellers to the ATO?
- Should marketplaces, including those for goods, be included in a reporting regime for the sharing economy?
- Are there reporting regimes or elements of reporting regimes from other countries that should be considered in the Australian context? If so, why?
The Taskforce's report recommended that a compulsory reporting regime be established. "Operators of designated sharing ("gig") economy websites should be required to report payments made to their users to the Australian Taxation Office (ATO), Department of Social Services (DSS) and other government agencies as appropriate", the report said.
A reporting regime like this would require gig platforms like Uber, Airtasker and Menulog to provide sellers' identification and transaction data in a standard format. The platforms would also need to ensure accuracy of the collected data. This may require infrastructure changes and impose other compliance costs on businesses, and data privacy issues will need to be carefully considered.
Under another option, the paper says an alternative model to requiring reporting by platform operators would be to place a requirement on financial institutions such as banks or payment processors to provide sharing economy platform transaction data to the ATO for data matching and pre-filling purposes. While this option might result in lower compliance costs for sharing economy platforms, costs would be incurred by financial institutions.