The Sharing Economy and Tax
There are various sharing economy websites and applications working in Australia. The general populations who give merchandise or services through any of them have to consider how GST and wage charge applies to their income.
What is the Sharing Economy?
The Sharing economy connects users and suppliers through a facilitator who usually operates an app or website.
Generally Sharing Economy includes?
- Leasing a room or an entire house or unit for a short timeframe premise
- Giving taxi travel Services (called 'ride-sourcing') for a charge
- Giving individual Services, for example, such as creative or professional services like graphic design, creating websites, or odd jobs like deliveries and furniture assembly
- Leasing an auto parking spot.
The Sharing economy and tax
If you are involved in the sharing economy, you need to consider the following things:
- If you are carrying on an enterprise whether you need an ABN or you need to register for GST and lodge activity statements
- If the price of the goods and services you are providing includes GST
- If and when you are supposed to provide tax invoices for your sales
- Whether you are Supposed to declare your income in your income tax return or not
- How your sharing economy activities effect your GST and tax obligations
Providing taxi travel services: If you are a part of organisation providing ride-sourcing services then according to law you need an ABN and you need to be registered for GST and you need to account for GST on the full amount of every fare regardless of how much you earn.
Leasing out a room or all of your house: If you are renting out a room or a whole house then GST wouldn’t be the part of that as GST doesn’t apply to residential rents,so you are not liable for GST on the rent you charge and you cannot claim any GST credits for associated costs.
Renting goods and services: If you are already registered for GST, and you are earning extra money providing services through a sharing economy app or website, you need to account for GST on that extra money through your existing ABN and GST registration.
Leasing an auto parking spot: If you rent out a car parking space it can mean that you are running an enterprise. You will need to get an ABN and register for GST if either:
- You earn, or are likely to earn, $75,000 or more per year renting out the car parking space(s)
- You have an existing enterprise for which you are registered for GST
- Your turnover is, or is likely to be, $75,000 or more a year for all of the goods and services you provide while carrying on a number of enterprises.
For further information about Sharing Economy and how to avoid tax debt you need to contact 1300 488 330