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OECD Publishes Comments On Gig Economy Reporting Framework

by Ulrika Lomas, Tax-News.com, Brussels

01 May 2020


The OECD has published the comments it has received on a proposal for a framework of Model Rules for sharing and gig economy platforms to report the activities of their users, to support tax authorities to ensure the collection of tax.

The consultation, launched in February 2020, yielded 20 responses, including from Booking.com, Etsy, and Uber. These digital services providers were generally supportive of the OECD's proposals in this area, urging that countries should be encouraged to adopt them so that retailers face a uniform set of rules for all their operations across the world.

In addition to the Model Rules, the OECD Forum on Tax Administration has developed a Code of Conduct on providing information and support to sellers on their tax obligations while minimizing compliance burdens. This Code of Conduct is intended to supplement the Model Rules, in particular in instances where sellers are not subject to reporting under the Model Rules, for instance because the transactions are out of scope or the jurisdiction has not implemented the Model Rules.

In its response to the consultation, Booking.com urged the OECD that "It should be carefully considered if and to what extent the Model Rules create an imbalance in the level playing field that currently exists in the platform market. The administrative burden and processes to comply with the Model Rules should be imposed equally between the market players and the end game should not be that only the largest platforms bear the burden."

It said: "Based on practical experiences with the proliferation of unilateral and multilateral BEPS-like legislation, the Model Rules and legislative processes should be placed in the wider legal context of existing rules and legislation on both national and multinational levels (including rules protecting rights of taxpayers and privacy rules)."

In Uber's submission, Francois Chadwick, Global Head of Tax, said: "We believe the actions undertaken are indeed a step in the right direction and have the potential to lead to positive outcomes for underlying sellers, tax authorities and platforms."

Its submission encouraged the OECD to consider reporting rules that would have a platform user's income broken down into its components. It said: "The Model Rules related to the Passenger Transportation and Delivery sectors require Platform Operators to report information, but the information will not provide tax authorities (or the taxpayer) with a full picture of income earned. For example, the Model Rules only require Platform Operators to share revenue information on Relevant Services (or on a relevant service component), which would exclude revenue items like partner incentives (paid by platforms) and other revenue streams such as advertising."

"Our lines of business are always looking to identify new revenue streams for Platform Sellers. To future proof and achieve the goal of simplified tax compliance, the Model Rules should consider a more holistic approach to ensure that all items of income are considered as is already done in a number of countries. The Model Rules may need to consider a more granular approach that considers the nature, source, and type of payment."

Uber, too, said "the reporting regime suggested by the OECD should apply equally to all platforms, marketplaces and similar players."

"To achieve a level playing field, it is important to understand the nuances of each gig and sharing economy sector (including their business models, methods of payment, competition with traditional economy, data points gathered, enforcement opportunities)," Uber said. "The gig economy is more varied than it appears at the outset and it would be difficult to apply a single set of rules to all players across the multiple sectors. Indeed, we would strongly prefer that the OECD rules envisage a sector specific approach. This would allow the Model Rules to enforce different rules more suited to a particular sector."

In its submission, Uber urged that "when the Model Rules take effect, a 'sunset clause' should be introduced which would revoke other similar data sharing obligations."

TAGS: Chad | compliance | tax | business | tax compliance | enforcement | legislation | transfer pricing | retail | services | Tax | BEPS

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