Are you one of the many Australian business owners that will earn additional income through the sharing economy this summer? If so, you may have tax obligations.
Growing rapidly and common all year round, sharing economy activity tends to particularly ramp up during the summer holiday season. Some of these activities include:
- renting out a room or a whole house or unit for a short-time basis, for example Airbnb and Stayz
- providing ‘ride-sourcing’ services for a fare (considered to be taxi travel for GST purposes) such as Uber, SheSafe, Shebah and GoCatch
- providing personal services, including creative or professional services like graphic design, creating websites, or odd jobs like deliveries and furniture assembly, for example Airtasker, Mad Paws and Deliveroo
- renting out a car parking space, for example Parkhound and Spacer.
Your tax obligations associated with each will vary depending on your activity, and in many cases be additional to what you already do as a small-business owner.
Income tax and GST in the sharing economy
Income Tax is payable on the payments you receive through the sharing economy that are assessable income.
This means you:
- must declare the income in your tax return
- can claim deductions for associated expenses.
Assessable income can include:
- income earned from performing services for a fee, such as ride sourcing, delivery services or other services arranged through a sharing economy platform
- earning short-term or long-term rent from a property or part of a property that you own or lease, such as your home, a rental property or a parking space
- income from sharing other forms of property, such as a motor vehicle or caravan
- income received from carrying on a business arranged or facilitated through a sharing economy platform.
You should keep records of income and expenses regardless of how much you earn.
If your turnover is below, or is projected to be below, the GST threshold of $75,000 per year, you are not required to register for GST. However, you can apply for an ABN, for example if you’re going to invoice businesses for work you do that is outside of the sharing economy. You can also choose to register for GST if you want.
If you have a ride-sourcing enterprise, special rules apply and you must have an ABN and register for GST regardless of your turnover.
If your turnover is, or is projected to be, $75,000 or more per year, you need to get an ABNExternal Link and register for GST.
If you’re already registered for GST for any reason, and you earn income providing goods or services through the sharing economy, you need to account for GST on those earnings through your existing ABN and GST registration. This includes if it’s from:
- another enterprise
- other sharing economy sites.
For example, if you are registered for GST because you have a ride-sourcing enterprise, you also have to account for GST on goods or services you provide through any other enterprises you carry on, such as renting out a car parking space.
More details on these reporting requirements is available from the at:
www.ato.gov.au/general/the-sharing-economy-and-tax/income-tax-and-GST-in-the-sharing-economy/
