Australia wants to make the sharing economy more accountable. Under new rules, platforms must report all sharing economy transactions to the Australian Taxation Office.
According to exposure drafts (for public comment) of Australia’s proposed new legislation, electronic platforms will have to report details about transactions made via their platforms to the ATO. The mooted rules would regulate the gig economy. Under the new regulations, services such as ride-hailing platforms or websites that offer short-term accommodation will need to report transaction data directly to tax authorities.
Given that transactions on digital platforms are often opaque, with plenty of room to avoid paying the applicable VAT, it’s not surprising that authorities want to institute a mechanism to monitor compliance.
Who does the sharing economy reporting requirement apply to?
The government encapsulates the proposed new law as follows: “Generally, if an electronic platform facilitates a supply connected to Australia for consideration between two entities, then the operator of the platform is required to report information about the transaction to the ATO.”
The reporting requirement thus applies broadly to gig economy platforms such as Uber and Airbnb.
However, the requirement does not apply if ownership of goods changes permanently. The reporting obligation also does not extend to financial supplies.
Why does Australia want to regulate the sharing economy?
Australia’s move to create robust regulatory frameworks for the sharing economy is in line with global norms. As gig/sharing economy platforms become more central to the economy, lawmakers are seeking to make these businesses more transparent, accountable and fair.
More specifically, Australia’s Treasury established its Black Economy Taskforce in 2016. The Taskforce aimed to combat underground economic activity that traditional law enforcement did not effectively address.
The Taskforce’s report recommended compulsory reporting for sharing economy platforms. As Treasury notes, the report “found that without a reporting regime in place, it would be difficult for the ATO to gain information on compliance of sharing economy participants unless targeted audits were used.”
The report also concluded that compulsory reporting would help align Australia’s regulations with international best practice.
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