July 13, 2020

The OECD has released a new global tax-reporting framework, the “Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy”. Under the Model Rules, digital platforms are required to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities.

The OECD explains that, with the digitalisation of the economy, transactions that take place on platforms may not always be reported to tax administrations, either by third parties or by the taxpayers themselves. The platform economy also means increased access to information for tax administrations, as it brings activities previously carried out in the informal cash economy onto digital platforms.

The OECD says that the Model Rules are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level playing field with traditional businesses, in key sectors of the sharing and gig economy. They further seek to avoid a proliferation of different and unilateral reporting regimes, allow for the use of novel technology solutions and help create a sustainable environment supporting the growth of the digital economy.

The Model Rules are part of a wider strategy of the OECD to “address the tax challenges arising from the digitalisation of the economy and are designed to serve as a basis for further policy developments in increasing tax transparency to create a stable environment for the growth of the digital economy”. They were developed in response to calls for a global reporting framework for digital platforms, as reflected in the 2018 OECD report to the G20 on “Tax Challenges Arising from Digitalisation”, as well as in the 2019 report on “The Sharing and Gig Economy: Effective Taxation of Platform Sellers” by the OECD Forum on Tax Administration, which brings together over 50 of the world’s most advanced tax administrations.

To support the swift and coherent implementation of the Model Rules, the OECD will now take forward work on the international legal and technical framework to facilitate the automatic exchange of the information collected under the new rules. To read the OECD press release in full and to access the new rules, click here.