In light of the rapid growth of the digital economy and in response to calls for a global reporting framework in respect of activities being facilitated by such platforms, in particular in the sharing and gig economy, the OECD developed the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy ("Model Reporting Rules for Digital Platforms" or "MRDP").
Under the Model Rules, 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. By providing a standardised reporting regime, the Model Rules 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 Model Rules 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 Model Rules with an extended scope.
Exchanges of information under the Model Rules are operationalised by an international legal framework in the form of the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms (the “DPI MCAA”), to support 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.