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4 April 2024
In Brief
Under the Sharing Economy Reporting Regime (SERR), operators of electronic distribution platforms (EDPs) are required to report certain information to the Australian Taxation Office (ATO) about supplies made through their platforms. Since July 2023, the SERR applies to EDPs facilitating the following two types of supplies that are connected with Australia, namely taxi travel (including ride-sourcing or ridesharing) and short-term accommodation. From 1 July 2024, EDPs facilitating all other types of supplies connected with Australia such as asset sharing, food delivery, tasking-based services etc will be required to start reporting.
The key points EDP operators should note are:
- The broad scope of the SERR is intended to capture both Australian resident and non-resident EDPs. EDPs are required to report bi-annually, and the ATO has issued guidance on the information details to be reported.
- There is no turnover threshold test, and therefore, any EDP with $1 of relevant supplies is required to report (with one exception - in the first year, i.e 1 July 23 - 30 June 24, EDPs facilitating less than $1m of taxi travel or short-term accommodation are exempted from reporting).
- Currently, there are some reporting exemptions for transactions relating to relevant accommodation and taxi travel, e.g. supplies made via multiple EDPs, supplies made by a listed entity or its subsidiary, supplies in relation to substantial property, certain supplies by non-residents etc.
- For those EDPs that are required to start reporting from 1 July 2024, additional exemptions are proposed. These propose to cover supplies by government, supplies by a substantial supplier, supplies of most scheduled passenger travel services and certain supplies of asset hire.
All EDP operators should now familiarise themselves with the SERR and their reporting obligations in order to ensure compliance. In particular, EDP operators should note what transactions are in scope of the SERR, the availability of any exemptions (current and proposed) and ensure their systems are configured appropriately to report or exclude them as required.
In Detail
Who will be required to report?
An entity that is the "operator of an electronic distribution platform" is required to report information to the ATO about certain transactions that are made through the platform. The concept of an "electronic distribution platform" is as defined in the GST Act but extended for the purposes of the SERR to specifically include supplies not made (that is, performed) by electronic communication (which are often a hallmark of the “gig or sharing economy” sector).
To be an EDP as defined, a platform must allow entities to make supplies available to an end-user consumer through the platform.
The Explanatory Memorandum (EM) to the Bill that introduced the SERR notes that the EDP can play a variety of roles, from the most basic of facilitating a transaction between unrelated parties, to the more complex involving the assumption of risk in the transaction. It also notes that a marketplace or platform does not need to facilitate any payment to meet the definition of an EDP, although a service that facilitates payments only would not be an EDP.
The EM states that requiring the supply to be made “through the platform” ensures that the reporting obligation only applies in respect of a transaction where the platform has a “greater level of involvement in the transaction than merely advertising the opportunity, referring the buyer to the seller, or processing a payment”.
What transactions are required to be reported?
The SERR captures transactions involving the "provision of consideration" by a buyer for a seller’s "supply" that is made through the platform. In particular, the reporting regime applies to supplies "connected with the indirect tax zone" (which includes Australia and its external territories). Relevantly, this will be where the supply is “done” in Australia or made by an Australian seller or a non-resident seller to an Australian consumer.
Specifically excluded from the SERR are transactions involving the sale of goods or real property and those relating to financial supplies, however, transactions involving the rental of the same goods or real property are caught (e.g. short-term accommodation rental and asset sharing services, such as a car-sharing service).
Importantly, transactions already covered by other reporting requirements, such as under the existing Taxable Payments Reporting System (TPRS) or the withholding tax regimes (for example, payments made as a result of an employer-employee relationship), are also not required to be reported.
What information is required to be reported?
The ATO has issued a Sharing Economy Reporting Regime Business Implementation Guide, and it sets out the information details to be contained in the SERR reports to be provided by the EDPs (or their intermediaries appointed to report on their behalf). The data requirements (which are consistent with the previously issued Treasury Fact Sheet) are extensive and detailed, for example including:
- the seller’s legal name,
- date of birth,
- primary address,
- email address,
- bank account details,
- ABN or foreign tax identification number (if held),
- total payments received (net and gross), GST on payments,
- number of transactions during a reporting period etc.
At this stage, the information required appears to be aggregate-level data relating to the total amount and number of transactions per seller, and a more onerous per- transaction detail report is not required.
How frequently will platforms be required to report?
EDP operators are required to report on a bi-annual basis, i.e. twice a year at the end of the month following each six-monthly period, as follows:
- From 1 July - 31 December - the report is due on 31 January the following year.
- From 1 January - 30 June - the report is due on 31 July.
Reporting exemptions involving relevant accommodation or taxi travel
Transitional exemption for EDPs with reportable transactions of less than $1m involving relevant accommodation or taxi travel
Under the Taxation Administration (Transitional Exemptions for Reporting by Electronic Distribution Platform Operators – Relevant Accommodation and Taxi Travel) Determination 2023, EDP operators who have total reportable transactions involving the supply of relevant accommodation or taxi travel of less than $1 million (including GST) in the first year of operation (or such prorated amount if they operated the platform for only part of that year) will be exempted from reporting these transactions.
Eligible EDP operators are required to notify the Commissioner in writing that they would be applying this exemption prior to the time they would otherwise be required to lodge their report. Notably, eligible EDP operators who choose not to apply the exemption (or fail to notify the Commissioner as required), are given an extension of time to give the report to the Commissioner, as follows:
- for the reporting period ending on 31 December 2023 - on or before 29 February 2024, and
- for the reporting period ending 30 June 2024 - on or before 2 September 2024.
Broader reporting exemptions involving relevant accommodation or taxi travel
In addition, under the Tax Administration (Reporting Exemptions for Electronic Distribution Platform Operators - Relevant Accommodation and Taxi Travel) Determination 2023 an EDP operator is exempted from having to report transactions involving a supply of relevant accommodation or taxi travel in the following situations:
- the supply was made through at least one other EDP who has the responsibility to report the transaction, i.e.
- the supply was made through the first EDP and at least one other EDP;
- the first EDP operator did not itself provide any of the consideration for the supply directly to the supplier;
- the other EDP operator(s) provided all or part of the consideration for supply to the supplier and have a reporting obligation to report that transaction;
- the first EDP operator has notified the Commissioner in writing that they would be applying the exemption; or
- the supplier is either a listed entity, or a wholly-owned subsidiary of a listed entity; or
- the transaction involves the provision of consideration relating to a substantial property (i.e. a property where, for a reporting period, at least 2,000 transactions were facilitated by the EDP in relation to that property in the 12-month reporting period, or otherwise proportionally adjusted to reflect the shortened period that the platform was used. In this regard, each distinct address is considered a separate property, e.g. multiple rooms at a commercial hotel would be counted towards a single property, whereas transactions relating to separate addresses within a building, such as apartments, would be counted as being separate properties); or
- the following conditions are met:
- the supplier has provided the operator with one or more addresses, and none of those addresses are within Australia;
- for a reportable transaction involving a supply of taxi travel, the taxi travel did not occur within Australia;
- the consideration provided to the supplier was not paid to an account held with a financial institution in Australia; and
- there is no other information available to the operator that indicates that the supplier is a resident of Australia.
Proposed new reporting exemptions for all other EDPs from 1 July 2024
In line with the next wave of EDPs required to report from 1 July 2024 to cover EDPs facilitating all other reportable transactions in the broader sharing economy, e.g. asset sharing, food, delivery, task based services etc., the draft Taxation Administration (Reporting Exemptions for Electronic Distribution Platform Operators) Determination 2024 proposes additional exemptions (currently in draft) as follows:
- the supplier is a government department, agency, or authority (however described and at any level of government), or an entity wholly owned by a government;
- the supplier is a substantial supplier (i.e. a supplier where, for a reporting period, at least $1 million of supplies were facilitated by the EDP in the 12-month reporting period, or otherwise proportionally adjusted to reflect the shortened period that the platform was used);
- The transaction is mere booking or reservation for a supply to be made in the future, where:
- the consideration for the supply was not specified at the time the booking or reservation was made;
- the consideration for the supply will not be provided via the platform; and
- the operator of the platform will not have visibility of whether the supply is made in practice, or whether consideration is provided for it;
- the transaction involved the supply of a scheduled passenger travel service, other than:
- a charter service;
- taxi travel; or
- a service where the supplier had made nine or less places available for booking through the electronic distribution platform for that service; or
- the transaction involved the supply of an asset other than real property by way of rent or lease, where:
- the transaction was not for the supply of a specific asset; and
- the supplier had no less than 50 listings for the rental or lease of assets on the electronic distribution platform at any time during the reporting period.
These additional exemptions are intended to exclude transactions that are low risk, or made by suppliers who are likely to be compliant with their tax obligations, or are likely not sharing economy participants. They are proposed to apply from 1 July 2024, and logistically, the current exemptions in the earlier Determination will be repealed on 1 July 2024 and incorporated into the new Determination.
The Takeaway
Australian resident and non-resident EDP operators should be aware of their reporting obligations under the SERR, which came into force from 1 July 2023 for some EDP operators, and from 1 July 2024 for all other operators. The ATO has released its implementation guide and also provided the information details that are to be included in the report.
In particular, EDPs facilitating transactions involving relevant accommodation or taxi travel are already required to report transactions from 1 July 2023 - although for the first year of operation, i.e. 1 July 2023 to 30 June 2024, there is a transitional exemption from reporting for EDP's facilitating less than $1 million of reportable transactions in these categories. In addition, there are also several other exemptions for specific transactions in these categories and EDP operators should note them and configure their systems appropriately to exclude these transactions.
More importantly, from 1 July 2024, the SERR will apply to all other EDPs facilitating reportable transactions in the broader sharing economy, e.g. asset sharing, food, delivery, task based services etc. As such, they should review these rules and the ATO guide without delay, and finalise preparations of their systems and processes to be able to capture and report these transactions from 1 July 2024. As noted above, there are also proposed new exemptions to cover additional scenarios for supplies by government, supplies by a substantial supplier, supplies of most scheduled passenger travel services and certain supplies of asset hire which EDP operators should similarly note and prepare their systems to be able to exclude these.
Contact us
If you would like to further discuss this alert, reach out to our team or your PwC adviser.
Brady Dever
Mark Simpson
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