On 19 February 2020, the OECD released a public consultation document on the draft model rules for reporting by platform operators with respect to sellers in the sharing and gig economy .

The OECD notes that the market of online platforms that facilitate the “sharing” and “gig” economies has been growing, and an increasing number of taxpayers are earning taxable income through these platforms.

Some activities previously carried out in the informal cash economy are being brought onto digital platforms and transactions are recorded in electronic form, potentially allowing greater transparency and a reduced compliance burden.

However some transactions carried out through online platforms may not be visible to tax administrations and may not be reported by taxpayers. The gig economy involves the provision of services by individuals on a self-employed basis and this is generally not subject to third-party reporting. For this reason some tax authorities have introduced reporting obligations for platform operators.

The OECD is therefore developing a tax policy and technical framework for model reporting rules, that could be adopted by jurisdictions on a uniform basis and prevent the development of various different unilateral national approaches. The OECD’s model reporting rules would aim to regulate the collection of information on the transactions of platform sellers, allowing the development of automatic exchange agreements for jurisdictions.

The model reporting rules aim to ensure that taxpayers and tax administrations can have timely access to information on amounts earned by platform sellers so that compliance burdens can be reduced. The rules would encourage cooperation between tax administrations and would provide a model reporting framework that could also be used for other tax purposes.

The reporting rules promote the development of technical support for reporting systems that allow confirmation of the identity and residence of a platform seller for tax purposes, based on a government verification service. The regulatory scope continues to be adequate for the purpose.

A Code of Conduct has been developed as the OECD considers that many participants in the sharing and gig economy may be uncertain about the extent of their tax obligations. Tax education and guidance are therefore seen as important in improving tax compliance.

Interested parties are requested to send in their input by 20 March 2020 on the scope of platform operators and the delegation mechanism; excluded platform operators; the relevant services; excluded sellers; the due diligence procedures; the reporting requirements and the secondary mechanism. Comments are also invited on the draft code of conduct.