Australians who earn money from Airbnb could soon be subject to a new income reporting regime for sharing platforms estimated to net $15 billion a year.
A proposed federal government crackdown means sharing economy platforms operating in Australia would be required to report data to the tax office so the earnings of those participating in them could be assessed for tax liabilities.
Treasury released a discussion paper yesterday to consult with the industry over the legislation, which also aims to cut red tape for mum-and-dad operators using the digital platforms.
The move follows years of advocacy from industry bodies spearheaded by Tourism Accommodation Australia, and affects major players including Uber, Airbnb, Airtasker and delivery services such as Deliveroo and Uber Eats.
Uber and Airbnb are reportedly working with the Australian Taxation Office on sharing data and providing direct reporting of the income earned under the ATO’s formal information gathering powers.
Assistant Treasurer Zed Seselja says the reporting arrangements would standardise the way information is collected and are aimed at delivering transparency and fairness into the sharing economy.
They do not, though, target the platforms themselves, most of which are based offshore and covered by the government’s multinational tax regulations.
In a statement, Senator Seselja said the sharing economy has seen significant growth in Australia “but as it grows, there is a risk that some individuals are not reporting their full income and avoiding the right amount of tax”.
“We are committed to making sure people pay their fair share of tax,” he said.
The ATO is currently unable to calculate the amount of tax not paid by those either ignorant of their obligations or deliberately avoiding liabilities.
The discussion paper says data sharing by digital platforms would cut red tape for the 10.8 million individuals now engaged in the shared economy by allowing them to use pre-fill tax declarations.
And it argues: “Potential underpayment of tax undermines the benefits of the sharing economy to consumers and businesses, and creates an unfair playing field for those doing the right thing.”
Under a second option proposed in the paper but less favoured by the Treasury, financial institutions such as banks would be required to provide sharing economy platform transaction data to the ATO for data matching and pre-filling purposes.
“Financial institutions are already required to report to the ATO on a number of different transactions to meet various legislative obligations, such as interest paid to account holders and investors,” the report says.
“Matching payments to an individual or entity could be assisted by the fact many bank account holders supply tax file numbers to the financial institution. This option could reduce the impact on sharing economy platforms.”
However, there are fears the approach would result in significant under-reporting and extra costs.