As part of the ongoing work of the Committee on Fiscal Affairs, the OECD is seeking public comments on the draft Model Rules for Reporting for Platform Operators with respect to Sellers in the Sharing and Gig Economy.
The market of online platforms facilitating the "sharing" and "gig" economies is growing rapidly and is changing many business sectors. As part of that change, tax administrations are considering adapting their compliance strategies to reflect that an increasing number of taxpayers are earning taxable income through such platforms.
The growth of sharing and gig economy platforms presents significant opportunities for tax administrations, as it may bring activities previously carried out in the informal cash economy onto digital platforms, where transactions and related payments are recorded in electronic form. If leveraged in the right way, this can lead to greater transparency and minimise compliance burdens for both tax administrations and taxpayers.
At the same time, certain activities carried out through these platforms may not always be visible to tax administrations or self reported by taxpayers. This is because the development of the gig economy entails a shift from traditional work relations under employment contracts to the provision of services by individuals on an independent basis, which is not typically subject to third-party reporting. These developments present risks of distorting competition with traditional businesses and reducing taxable income.
Against that background, a number of tax authorities have already introduced certain reporting obligations on platform operators, while others are planning to introduce similar measures in the near future.
Given, however, that the platforms are facilitating transactions in the sharing and gig economies on a global scale, there are inherent limitations to the effectiveness of domestic reporting rules. In particular, governments may face challenges in terms of the enforcement of domestic reporting requirements when the platform operator is not located in their jurisdiction. At the same time, platforms facilitating transactions in multiple jurisdictions may be confronted with a wide set of permutations of domestic reporting requirements, which may lead to increased costs and potentially harmful barriers to the further development of their businesses.
It is in this light that the OECD is taking forward work on the development of model reporting rules (the Model Rules) that could be adopted by interested jurisdictions on a uniform basis to collect information on transactions and income realised by platform sellers, in order to contain the proliferation of different domestic reporting requirements and to create efficiencies for tax administrations and platform operators alike.
In addition to the Model Rules, the OECD Forum on Tax Administration has developed a Code of Conduct on providing information and support to sellers on their tax obligations while minimising compliance burdens. This Code of Conduct is intended to supplement the Model Rules, in particular in instances where sellers are not subject to reporting under the Model Rules, for instance because the transactions are out of scope or the jurisdiction has not implemented the Model Rules.
