Caveat: please note that this box does not attempt to provide an exhaustive list of all sharing/gig economy related work that have been or are being carried out by different directorates within the OECD, but summarises those that are potentially relevant from both tax and other broader policy perspectives.
The Impact of the Growth of the Sharing and Gig Economy on VAT/GST Policy and Administration
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Annex A. Other relevant OECD work on sharing and gig economy
Tax administration
The Sharing and Gig Economy: Effective Taxation of Platform Sellers (2019): this report by the OECD Forum on Tax Administration looks at approaches to help ensure the effective taxation of those earning income from the sharing and gig economy with key focus on the direct tax aspects. It considers the different ways/options that tax administrations can best engage with platform sellers, sharing and gig economy platforms, and each other to enable more effective tax compliance. Based on these options, the report further identifies recommendations and areas for future work: joint work between tax administrations and platforms on providing information and support to platform sellers on their tax obligations, which includes further consideration of a possible model Code of Conduct; improving the evidence base to enhance understanding of the tax at risk, which includes consideration of enhanced international cooperation as well as continued exchange of information on successful practices and legislative approaches; and assisting in the possible development of a legislative model for standardised reporting by sharing and gig economy platforms. Particularly, the recommendation on the development of standardised reporting model has resulted in a 2020 report on Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (please see Annex C for more details on this report). This report contains the OECD’s Model Rules that require digital platforms 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. Although the focus is on direct taxes, the report recognises the potential relevant use of the information reported for VAT/GST purposes. Full copies of these two reports are available at http://www.oecd.org/ctp/the-sharing-and-gig-economy-effective-taxation-of-platform-sellers-574b61f8-en.htm and https://www.oecd.org/tax/exchange-of-tax-information/model-rules-for-reporting-by-platform-operators-with-respect-to-sellers-in-the-sharing-and-gig-economy.htm, respectively.
Broader policy implications
Gig Economy Platforms: Boon or Bane? (2019): this working paper by the OECD economics department (please note that this is not an official publication but a working paper) analyses the economic and social implications of the emergence of gig economy platforms. For the purposes of the paper, the gig economy platforms are defined as two-sided digital platforms that match workers on one side of the market to customers (final consumers or businesses). Based on this definition, platforms involved in facilitating accommodation services are excluded as they do not intermediate labour. As the paper explores various policy implications, it highlights some challenges associated with labour market policy such as ongoing legal controversies surrounding platform worker classification issues (self-employed contractors or platform employees) and the need for ensuring adequate working conditions (access to basic social protection, including work-related accidents, parental benefits, health and pensions) and incentives for skill upgrading for platform workers. The paper also recognises the need for appropriate tax policy responses in the area and makes a reference to the ongoing WP9 work on the sharing/gig economy for VAT/GST implications. Full copy of the paper is available at https://www.oecd-ilibrary.org/economics/gig-economy-platforms-boon-or-bane_fdb0570b-en
OECD Tourism Trends and Policies 2016: the report by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) in partnership with the European Commission is a biennial publication included in the programme of work of the OECD Tourism Committee. The report has a dedicated chapter on policy implications for the tourism sharing economy (transportation, accommodation, travel and dining experiences) in which challenges associated with areas such as consumer protection, taxation and regulation are highlighted with some examples of policy responses from different countries. Specifically, these challenges include competitive imbalances, with prospect of unfair competition for traditional regulated businesses, labour market risks and protection for drivers, hosts and other service providers and taxation of sharing economy activities and impact on tax revenues. The report notes that the initial policy responses vary across different jurisdictions and most of them take ‘wait and see’ approach. Other government / industry responses include review of existing rules and regulations, introduction of licensing and permit systems, direct engagement and promotion and self-regulation with platforms introducing quality controls, standards and insurance systems, etc. In the area of taxation, the report recognises that the platforms may play a more active role in providing clarity around tax obligations and supporting compliance, or even directly by collecting tax (e.g. accommodation tax) on behalf of hosts. Full copy of the report is available at https://www.oecd-ilibrary.org/industry-and-services/oecd-tourism-trends-and-policies-2016_tour-2016-en
OECD Tourism Trends and Policies 2020: in addition to the 2016 report, the 2020 report undertaken in co-operation with the European Union, highlights sharing economy associated challenges faced by governments, particularly negative impacts of the growth of the sharing accommodation activities in relation to consumer protection and ensuring a level playing field with similar accommodation businesses. The report provides some examples of government responses that include local authorities’ introduction of regulations to limit the number of days allowed for short-term rentals, restrictions on second-home rentals and measures involving digital platforms such as information reporting requirements to the tax authorities. Again, the report emphasises the importance of acquiring accurate data on the development of the sharing economy to better understand its impact on the tourism economy. In this context, it notes certain efforts being made, notably through data sharing with platforms. The report also indicates that administrative sources such as accommodation providers’ VAT registration details also offer potential in this area. Full copy of the report is available at https://www.oecd.org/cfe/tourism/oecd-tourism-trends-and-policies-20767773.htm
Monitoring and measurement
Measuring platform mediated workers (2019): as part of the OECD Digital Economy Papers series by the OECD Directorate for Science, Technology and Innovation (STI), this paper, recognising challenges in estimating the number of platform workers, reviews different attempts made by private agencies and official statistical agencies to measure platform workers and offers recommendations on how to improve the measurement in the future (i.e. how to use different forms of surveys / how to formulate the survey questions to obtain desired outcomes). Full copy of the paper is available at https://www.oecd-ilibrary.org/science-and-technology/measuring-platform-mediated-workers_170a14d9-en
Source: OECD