Think AIrBNB, Uber, Airtasker.
If you are earning income through the sharing economy, you may have different obligations depending on what you are doing.
What is the sharing economy?
The sharing economy connects buyers and sellers, usually through an app or a website. Sometimes sellers may bid against other sellers to win a job.
For example, you may be:
- providing skilled or trade services, such as creating a website
- completing odd jobs
- ride-sourcing – transporting passengers for a fare
- renting out a room, house or parking space.
What do you have to do?
Some things to consider are:
- if you are carrying on an enterprise
- if you need an ABN
- if you need to register for GST and lodge activity statements
- if the price of the goods or services you provide includes GST
- if and when you need to provide tax invoices for your sales
- if you need to declare your income in your income tax return
- what GST credits and income tax deductions you can claim for your expenses related to earning your income
- how all your sharing economy activities added together impact your GST and income tax obligations.
If you’re providing goods or services for a fee, and it’s not a hobby, it's assessable income. If you’re registered for GST through your current business, account for GST through your existing ABN and GST registration.
If you’re providing ride-sourcing services, you’ll need an ABN, register for GST and to charge and account for GST, regardless of your turnover. The ATO regards this as providing taxi travel services.
If you’re renting out your main residence, you don’t need to pay GST but you’ll need to include this rental income in your return. You can claim all related expenses but are not entitled to GST input credits.
If you are registered for GST because you are already carrying on an enterprise you must account for GST on ALL the sharing economy goods and services you provide that are subject to GST.
If you are providing goods and services across multiple websites or apps, or through other enterprises outside of the sharing economy, you need to get an ABN and register for GST when your total turnover for all your activities together is, or is expected to be, $75,000 or more per year.
No matter how much you earn or the reasons for providing goods or services, you should keep records of ALL income and expenses. You may intend to provide goods or services as a hobby or recreational pursuit, but your level of activity over a whole year may mean that you are in fact running a business and need to comply with income tax and GST obligations.
Source: ATO Small Business Newsroom