Tax reporting deadline looms for sharing economy platforms: RSM
Digital marketplace platforms will need to lodge their first Sharing Economy Reporting Regime report soon with the 31 January deadline fast approaching.
RSM Australia has reminded digital marketplace platforms about the 31 January 2025 deadline for lodging Sharing Economy reporting regime (SERR) reports, with late lodgment likely to attract hefty penalties.
Any website, app or platform that hosts or facilitates a person or side hustler providing a service to another person located in Australia will be required to lodge SERR reports, RSM said.
The reports will be due every six months with penalties for non-complying EDPs of up to $825,000 for late or non-lodgment.
While SERR initially only applied to ride-sharing and short-term accommodation electronic distribution platforms (EDPs) such as Uber and Airbnb, the reporting regime now covers all EDP transactions (with limited exception), related to any service to Australian customers such as renting car storage, commissioning digital designs, or the sale of digital assets like eBooks, apps, videos or podcasts.
RSM Australia partner Sam Mohammad, who leads RSM's national indirect tax practice, said both digital platforms and those selling or renting through them should be across the changes and potential implications.
“The SERR was brought in by the Australian Government to increase the visibility of sharing economy transactions and to bring reporting requirements for these digital marketplaces in line with higher-risk industries,” Mohammad said.
“Any operator of an electronic service or platform that allows buyers and sellers to transact for rights or services is obligated to report on all transactions since 1 July 2024.”
At a minimum, Mohammad said this is expected to include the seller’s identification information and the total transactions relating to the seller over the reporting period.
The SERR reports are compulsory and must be lodged in a specific XML format, with first-time reporters potentially needing to register with the ATO.
Non-compliance with the new reporting regime could result in ATO-imposed penalties like fines or legal sanctions for EDP operators, RSM warned.
The scale of these would be dependent on the period of delay and the level of annual global income, with a late lodgement of 113 days for a significant global entity resulting in a penalty of up to $825,000.
RSM Australia noted that the popularity of sharing economy platforms has skyrocketed in Australia, with 150,000 locals now driving for Uber and more than 60,000 Aussies registered as active users on Airtasker.
“While some of the major platforms like Uber, Airbnb, eBay, Airtasker and Twitch are well known, there are many more operating in the Australian marketplace, including those that are locally developed or focus on more niche audiences,” Mohammad said.
While the onus is on the platform to report, Mohammad said those who take part in the sharing economy also need to be well-versed in what this means for them.
“In reporting all transactions to the ATO, the tax office will be aware of each and every time you have made income via that platform,” he said.
“So, if you have a side hustle doing pet sitting for example, or you have e-books for sale on a hosted platform, you need to be aware that the ATO will be tracking this activity through the platform reporting, and ensure your personal income tax and GST liabilities align.”
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