The sharing economy & tax

The sharing economy & tax

If you let a room or a car-parking space, do odd jobs etc for payment or drive passengers in a car for a fare, you may have tax obligations.

The ‘sharing economy’ – aka collaborative consumption, peer-to-peer or the like – is a new way of connecting buyers (‘users’) and sellers (‘providers’).

Sharing economy arrangements are generally booked through a facilitator using a website or app.

Common examples of what providers do in some sharing economy services include:

  • renting out or letting a room or other property for accommodation
  • renting out or letting car-parking space
  • providing odd jobs, errands, deliveries or more skilled services on an ad hoc basis
  • using a car to transport members of the public for a fare.

The tax laws that apply to conventional business activity also apply to sharing-economy activities.

In some instances letting out a room, letting out a parking space, doing odd jobs or other activities for payment or driving passengers in a car for a fare will mean that you are earning assessable income regardless of whether you are carrying on a business.

Are you operating a business?

If you are earning assessable income from providing sharing-economy services, you will need to keep records of:

  • income from that activity
  • any allowable deductions, which may need to be apportioned for private use

These records will help you to include these amounts in a tax return and pay any tax owing from your activities on time.

Renting out part or all of your home

Are you operating a business?

Providing taxi travel services through ride-sourcing

Input taxed sales – rental of residential premises