Sharing economy reporting system now law

Expansion of sharing economy reporting regime now in effect

The taxable payments reporting system (TPRS) will be expanded from July 2023 with operators of an electronic distribution platform required to report to the ATO.

Key points

• Starting from 1 July 2023, operators of sharing economy platforms will be required to report transactional information to the ATO.
• This includes operators of short-term accommodation, ride-sharing transport and food delivery platforms.
• Also, other task or time-based service platforms will be required to report for income years beginning on 1 July 2024.

The TPRS requires businesses in industries that have been designated as ‘high risk of non-compliance for tax obligations’ to provide additional transactional reports to the ATO. Generally, this report is lodged annually and identifies relevant parties to business transactions improving the ATO's visibility.

The Taxable Payments Reporting System already applies to some businesses in industries where non-compliance is deemed to be high risk. For example, businesses in the building and construction industry are required to report transactions made with contractors during an income year. This ensures that the contractors are adequately reporting both for income tax and GST when they accrue income.

By adding operators of sharing economy platforms to the regime, taxpayers who hold or use assets for short-term lease or contract work will also have their information collected.

Operator of an electronic distribution platform

For the purposes of the TPRS, an electronic distribution platform is a website, Internet portal, gateway, store or marketplace that provides a service

• Where entities make supplies available to end users, and
• by means of electronic communication.

However, a service is not an electronic distribution platform if it only advertises or creates awareness of possible supplies, operates as a payment platform, or serves as communications function.

Reporting requirements

The TPRS annual report for operators of electronic distribution platforms will include supplies connected to Australia for consideration between two entities. In the sharing economy platform context, consideration will usually be in the form of a monetary payment made to the seller via the platform.

The requirement to report will not apply if:

• The transaction only relates to a supply of goods where ownership of the goods changes permanently
• Title to real property is transferred, or
• The supply is a financial supply.

Reporting will not be required if the transaction occurs within the same consolidated or multiple entry consolidated (MEC) group.

For example, if the operator facilitated transactions between the owner of short-term rental accommodation and end users the operator would provide details in their TPRS annual report of the transactions involving the accommodation owner. Generally speaking, this would likely be name, ABN, gross income, etc.

Reporting not required

Electronic distribution platforms are not required to report a transaction if another reporting or withholding obligation requires the transaction to be reported to the ATO. Also transactions that only involve the supply of goods to a consumer are not captured by this reporting regime.

Commencement of reporting system

It is expected that operators of ridesharing and short-term accommodation platforms will already have systems in place that capture adequate data for government regulators. This coincides with the earliest start date for the TPRS regime of 1 July 2023. Therefore ABN holders using these platforms after the start date are likely to have information included in reports such as the ATO in the pre-fill report.

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