ATO cracking down on 'sharing economy'
The Australian Tax Office has warned it is focusing on taxpayers earning money from the “sharing economy” this tax time, cautioning that it has in excess of 600 million pieces of third-party data to track activity and income.
The ATO Assistant Commissioner is concerned that those earning money from the sharing economy may not be declaring these amounts on their tax return.
The sharing economy has changed the way we do a lot of things, but the ATO’s definition of income hasn’t changed. In the sharing economy, buyers and sellers are connected through a facilitator who usually operates an app or website. If you are running a business through the sharing economy you need to declare this income.
Popular sharing economy services include:
- providing taxi travel services (called 'ride-sourcing') for a fare
- renting out a room or a whole house or unit for a short-time basis
- renting out a car parking space
- providing personal services, such as creative or professional services like graphic design, creating websites, or odd jobs like deliveries and furniture assembly
With the ATO’s increased data-matching and capturing capabilities, it’s likely that those who leave out significant amounts of income will be caught.
Outside of declaring income, the ATO is also monitoring compliance requisites such as whether taxpayers have registered for GST where necessary. You will have different obligations depending on what you are doing. In particular, if you are earning an income from carrying on an enterprise of ride sourcing services, the ATO considers this as a ‘taxi travel’ service, and under GST law you will need to register for GST regardless of turnover.
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