A key Australian parliamentary committee received a bill on Thursday, 25 August, that would require digital platforms to report transactions to the Australian Taxation Office (ATO).

Under the current taxation laws, things imported by consumers and which are not goods or real property (including digital products and services) are not subject to the Goods and Services Tax. In light of the ongoing surge in the business of digital downloading, a growing proportion of consumption is not being caught by the GST.

The recent legislation would require digital platform operators to report certain information on gig economy transactions on their platforms. Information to be reported include identification of sellers conducting transactions through the platforms and associated payment details. The ATO will use the information to ensure sellers on the platforms (eg. PayPal, Western Union, etc) are complying with their tax obligation.

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From July 2022, digital platforms are required to report transactions of ride-hailing and short-term rental services, whereas from 1 July, 2023, the text of the proposed legislation states that types of apps used in the so-called gig economy would be subject to the expanded GST.

The new legislation has been cleared in the lower-chamber of the House of Representatives on two readings and was sent to the Australian Senate’s Economics Legislation Committee for a second reading.

If passed by each chamber after three readings. the operators of the electronic platforms would have to share certain types of information, such as seller identification and payment details to ensure that tax obligations are met.

The bill will affect services such as Uber, Lyft and Airbnb.

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Trade Tourism and Investment Minister Dan Tehan told legislators last Wednesday that “as Australia’s ‘sharing economy’ continues to grow, a transparency gap has emerged as existing tax reporting requirements do not adequately capture information about transactions in this part of the economy.”

The requirement would not apply if the transaction is related only to a supply of goods or transactions already subject to another ATO reporting or withholding obligation.