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What are your tax obligations in the sharing economy?

Sharing apps

Are you one of the many Australians who earn additional income through the sharing economy? If so, you may have tax obligations.

What activities make up the sharing economy?

The sharing economy is economic activity through a digital platform (such as a website or an app) where people share assets or provide services for a fee.

Common examples of sharing economy activities include:

  • ride-sourcing (transporting passengers for a fare)
  • renting out accommodation such as a room, whole house or unit for a fee on a short-term basis
  • renting out car parking spaces for a fee
  • being paid for completing a job using your skills – for example, web design or plumbing
  • completing odd jobs, cleaning, errands or similar activities
  • food delivery or other types of delivery
  • being paid for providing goods like meals or homemade items
  • renting, hiring or sharing your car, caravan, motor home or similar
  • renting, hiring or sharing other assets or equipment such as tools, musical instruments or sports equipment.

Things to consider

You need to consider how income tax, goods and services tax (GST) and other obligations apply.

The income you earn is assessible and you:

  • if you are operating as an enterprise
  • if you need an ABN
  • if you need to register for GST
  • if the fee you charge for your goods or services includes GST
  • what income you declare in your income tax return
  • what GST credits and income tax deductions you can claim for your expenses related to income.

If you provide ride-sourcing services you need to get an ABN and register for GST, regardless of how much you earn.

If you rent out your property, even if it’s only part of it, such as a room or car space, you may need to pay capital gains tax (CGT) when you sell.

No matter how much you earn or your reasons for providing goods or services, you need to keep records of income and expenses. This will ensure that your activities are tracked and you meet your tax obligations.

More detailed information about the sharing economy can be found on the ATO website.

ATO Staff Writer