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New compulsory reporting scheme for gig economy workers to kick off next year

The government is set to launch a new compulsory reporting scheme, targeted at stopping share-economy participants from skipping out on their tax obligations.

New compulsory reporting scheme for gig economy workers to kick off next year
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  • Maja Garaca Djurdjevic
  • July 13, 2021
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Uber drivers and users of Airbnb are among the share-economy participants that will soon have to adhere to a new compulsory reporting regime, which will be implemented by applying the taxable payments reporting system (TPRS) to certain transactions undertaken through these platforms. 

Ride-sourcing and short-term accommodation platforms will be first up, with the likes of Uber and Airbnb expected to report information of all transactions to the ATO from 1 July next year.

Asset sharing, food delivery, tasking-based services and other services will be included from 1 July 2023.

The upcoming rules, first announced in late 2019, are expected to apply to “operators of an electronic service” — such as a website, internet portal, app, gateway, store or marketplace — that allow buyers and sellers to transact.

According to the draft legislation, published late last week, transactions relating to the transfer of ownership of real property, such as those facilitated by platforms such as eBay or Gumtree, will be excluded.

In 2019, both Airbnb and Uber said they support the plan.

The government has touted the planned rules as the means to bridge a “transparency gap” created by the rapid growth of Australia’s sharing economy and the current inadequacy of the tax reporting system to capture data about transactions that take place there.

Not only is the tax authority’s lack of oversight providing an unfair advantage to share-economy participants against those who undertake similar activities and comply with their tax obligations, but the Treasury’s Black Economy Taskforce, established in 2016, believes the sector is feeding the black economy.

As such, the taskforce has recommended to the government that a compulsory reporting regime be implemented. It argued that, in the absence of such a regime, it would be difficult for the ATO to gain information on compliance of sharing-economy participants unless targeted audits were used.

The taskforce added that formalising reporting requirements would send a clear signal to sharing-economy participants that, in most cases, payments would be taxable.

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