Of course, everyone knows Uber and Airbnb. These marketplaces provide a convenient way of booking transportation and accommodation. On top of that, these companies have provided many Australians the opportunity to earn income.
With income comes the responsibility to pay taxes. Unfortunately, there are still some who do not declare the income they earn from sharing economy platforms such as Airbnb and Uber.
The Australian Taxation Office (ATO) is data matching income derived from the ‘sharing economy’, which connects users and providers through a facilitator who usually operates an app or a website. Therefore, it is crucial to declare the income that comes from sharing economy work.
Some popular sharing economy services are:
- renting out a room or a whole house or unit for a short-time basis (e.g. Airbnb, Stayz)
- providing ‘ride-sourcing’ services (e.g. Uber, SheSafe, Shebah and GoCatch)
- providing personal services, including creative or professional services like graphic design, creating websites, deliveries, furniture assembly (Airtasker, Mad Paws, Deliveroo)
- renting out a car parking space (e.g. Parkhound, Spacer)
Those who provide goods or services through any of the abovementioned sharing economy apps or websites need to pay attention to their income tax, goods and services tax (GST) or any other tax applicable to their earnings.
As sharing economy work is taxable, it is important for those who earn an income through a sharing economy service to learn how this source of income affects their taxes. There are several things to take into consideration such as income tax requirements, claiming GST credits, deductions that can be claimed, and other special arrangements like renting out just part of the property to Airbnb or renting one’s entire home.
Learn more about the sharing economy and taxes from Effective PD’s webinar. To subscribe, visit www.effectivepd.com.au. Effective PD offers an innovative way for busy accountants to be on top of their game with continuing professional development in a brief, flexible and easy way.
