Reminder on the sharing economy
ATO is reminding taxpayers of the tax obligations that can be triggered when someone is involved in the sharing economy.
As the sharing economy continues to grow with the likes of AirBNB and Uber, the ATO has reminded taxpayers of the obligations that can be triggered if they are involved in the sharing Economy.
One of the key things to remember when assisting clients who are involved in the sharing economy is to keep coming back to the basics of the tax rules.
That is, even though you may be earning income from different sources or using different platforms to derive income, the fundamental tax issues remain the same.
Some of the important issues that would need to be considered in connection with the sharing economy include:
- Determining whether someone is carrying on a business or is simply involved in a hobby or recreational pursuit
- The ATO regards ride-sourcing services as taxi travel, which means that the provider needs to register for GST regardless of their turnover;
- GST would not generally apply to residential rental income, but this would still normally need to be reported as income for income tax purposes; and
- Using a property to derive income can impact on an individual's ability to utilise the main residence exemption for CGT purposes in the future.
The ATO is also likely to pay close attention to the deductions being claimed by those who participate in the sharing economy.
As always, if you're going to claim deductions, you need to ensure that you keep appropriate records to substantiate the deductions that are being claimed against the income that you earn.
For more information about the sharing economy, please contact us on 02 9957 4033
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.