Under the MRDP, operators of digital platforms are required to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities. The Model Rules are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level-playing field with traditional businesses, in the key sectors of the sharing and gig economy.
Activities facilitated by platforms may not always be visible to tax authorities or self-reported by taxpayers. At the same time, the platform economy also permits increased access to information by tax administrations, as it brings activities previously carried out in the informal cash economy onto digital platforms.
By providing a standardised reporting regime, the MRDP help to minimise burdens on platform sellers and digital platform operators, which might otherwise arise were jurisdictions to apply multiple different requirements.
Reflecting the interest of a number of jurisdictions to permit the extension of the scope of the MRDP to the sale of goods and the rental of means of transportation, the OECD has developed an optional module allowing such jurisdictions to implement the MRDP with an extended scope.
The automatic exchange of information collected pursuant to the MRDP between tax administrations take place under the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms (DPI MCAA). The agreement foresees the annual automatic exchange of information by the residence jurisdiction of the platform operator with the jurisdictions of residence of the sellers (and, with respect to transactions involving the rental of immovable property, the jurisdictions in which such immovable property is located), as determined on the basis of the due diligence procedures of the MRDP.
