OECD Offers New Tax Reporting Rules For Gig Economy

By Alex M. Parker
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Law360 (July 3, 2020, 7:06 AM EDT) -- The providers of so-called gig economy platforms such as Uber and Airbnb will be required to report the tax information of sellers on their networks under recommended rules issued Thursday by the Organization for Economic Cooperation and Development.

The OECD broadened the scope of the proposed rules from previously released drafts, which will now apply to platforms that act as a venue for third parties as well as those that buy the services themselves to pass along to consumers. The organization said its goal with the project, which began in March 2019, was to facilitate uniform global reporting standards so governments could more easily trade information about this expanding sector of the modern digital economy.

"The standard is 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," said Pascal Saint-Amans, the OECD's deputy director for tax administration, in a statement announcing the final draft. "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."

Ride-hailing services and food delivery apps are just a few of the ways that the gig economy has become a staple of everyday life — especially as the novel coronavirus pandemic has forced many away from physical groceries, stores and public transportation. But the multinational platforms, as well as the independent workers who earn a living on them, have proven vexing for governments to track and tax.

Under the new OECD standards, these platform providers will be required to collect and submit to tax authorities the names, addresses, dates of birth, taxpayer or business registration information of those selling services on their platforms, as well as how much those sellers have earned. They must also verify the identification information about the sellers through available public records — although for existing users they can rely on previous data unless they have a "reason to know" it is outdated. 

The OECD broadened the scope of the rules and softened many of the exceptions following comments from platform providers and business groups that prior versions of the rules were too narrow, and could create an uneven playing field. The rules now apply both to the platforms that rely on third-party sellers as well as those that buy and sell the services themselves. The new draft also clarifies that a de minimis rule is only optional for governments to enact.

The OECD said the publication was approved June 29 by the organization's Inclusive Framework, an advisory body comprising 137 jurisdictions of members and nonmembers.

The gig economy project is separate from an OECD initiative to create rules on the overall digital economy, which is working to produce recommended tax rules by the end of the year.

--Editing by Neil Cohen.

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