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Taxation of Individuals in the Sharing Economy (45 Intertax 1, 2017)
Abstract
This article explores some of the tax implications that may arise in the context of the sharing economy. In particular, the author analyses the main challenges, from an individual taxation perspective, resulting from this new model of production and consumption. In this respect, different typologies of transactions and their tax characterization are surveyed. The contribution also includes a comparative overview of the steps taken so far by countries to regulate this new phenomenon and it formulates some suggestions in designing adequate tax policies.
... Podnikanie ako činnosť zameraná na uspokojovanie najmä osobných potrieb je neodmysliteľnou súčasťou fungovania spoločnosti a hybnou silou ekonomiky. V priebehu vývoja prešlo podnikanie zásadnými zmenami a na realizáciu obchodných aktivít mali vplyv 1 Článok vznikol v rámci riešenia grantových úloh APVV-14-0598 Elektronizácia v podnikaní s akcentom na právne a technické aspekty a APVV-16-0160 Daňové úniky a vyhýbanie sa daňovým povinnostiam (motivačné faktory, vznik a eliminácia). rôzne spoločensko-ekonomické faktory a javy. ...
Collaborative economy, that creates new business models in different sectors of the economy, produces new impulses for the development and innovations in the traditional areas. It is estimated that the gross revenue created by collaborative platforms in Europe reached almost 4 billion Euro in 2015 and that transactions facilitated by these platforms amounted up to 28 billion Euro in the same year. Despite of the benefits of the collaborative economy, it is necessary to respond to issues resulting from it. The aim of this paper is to refer to the essential problematic areas that can be identified in relation to the collaborative economy and to analyse two of them – from the business perspective with regard to the possible application of market access requirements and from the tax law perspective in relation to the tax collection.
... The second part of this contribution is dedicated to the challenges that Share&Charge pose to tax law (see Aslam & Shah, 2017;Beretta, 2017). As law inherently relies on territoriality, it was necessary to specifically locate the operations. ...
This article studies the emergence of Share&Charge, a German platform that organizes the sharing of charging stations for electric vehicles (EVs) and the billing for the energy transactions. Share&Charge follows a peer-to-peer fashion, enabling direct transactions between charging station owners and EV drivers. On the demand side, the platform, with its interactive map, makes it possible for EV owners to find a charging station in the most suitable location, for instance, at their place of work or where they live. On the offer side, Share&Charge enables station operators (private individuals or companies) to rent their charging stations and eventually to sell the electricity they produce. Charging tariffs within the charging station network are determined by the charging station operators themselves, but the platform provides indicative tariffs. Launched in September 2017, Share&Charge follows other initiatives, such as the French platforms Wattpop and ChargeMap, and the Swedish Elbnb. Share&Charge’s network is already proven to be successful with German citizens.
The platform economy has generated various new and highly successful business models. However, certain models facilitate tax evasion for service providers on their income earned on these platforms. While tax evasion contradicts the pro-social claim of many sharing platforms, it is unclear whether a provider’s tax honesty constitutes a value for consumers at all. This study investigates the role of tax compliance for platform users by employing an online experiment ( n=286 n = 286 ). The results indicate that consumers perceive providers’ tax compliance and consider it as a trust-enhancing signal. In further analysis, we find that consumers’ moral norms moderate both the signal’s trust-building effect as well as the relation between trust and transaction intention. In light of recent policy debates around taxing the platform economy, this study provides valuable practical insights for tax legislators.
The Collaborative Economy is one of the major revolutions arising from Digitalisation. It has brought efficiencies for consumers through lower prices and greater variety, while facilitating access to the job market for thousands of people. Growing relentlessly, it re-shaped transportation, accommodation, financial services and education, to name a few areas where it is present. Such expansion, however, has not been free from challenges and conflicts are well-known, especially those regarding the taxation of platforms and the legal classification of users providing services in them.
Left aside until very recently, the taxation of the abovementioned service provider soon became a conundrum for which the legal framework could only provide patching solutions: its activities remained obscure to tax authorities and, even worse, the reduced tax obligations that actors in the Collaborative Economy had to bear were rarely fulfilled.
The entry into force of the recently adopted seventh Directive on Administrative Cooperation will bring this invisibility to an end by requiring platforms to report payments received by each user. Nevertheless, the relevance of this piece of legislation goes far beyond enhancing transparency, its major achievement being the provision of definitions enclosing the whole Collaborative Economy. By doing so, the foundations for the development of a tax system have been laid, and properly addressing the challenge posed by platform sellers is an objective that seems to be at reach for European Tax Law.
Whether this will mean designing new tools or whether the existing ones will suffice is a matter for debate. However, the overall current setting of the tax on income and the VAT in Europe is undeniably ill-suited, as it places such a burden for
compliance upon service providers that occasional dedication to the collaborative economy is rendered extremely unattractive, therefore preventing consumers as a whole from taking advantage of the lower prices that come with it.
Any modification of the current tax system would require delegating some of these responsibilities to platforms, which are much better prepared to handle them in the most efficient way. Complementarily, a system with these characteristics will need to ensure that obligations go hand in hand with the level of dedication to Collaborative Economy activities, so that individuals who merely put at the disposal of others their under-utilized assets occasionally will not be charged in the same way as professionals.
This objective can be achieved through a schedular definition that provides a separate treatment for the income coming from Platform Economy activities. Such treatment, notwithstanding, does not need to be significantly different from the one given to the rest of income. It suffices a first band for which the tax rate will be zero or close-to-zero to capture occasional activities, and a progressive system on top of it that compensates for the previous exemption, so that the average tax rate for service providers working on a continuing basis is maintained similar to that of other traditional economy workers.
El desarrollo de la economía colaborativa está generando la aparición de un nuevo perfil de contribuyente cuyos ingresos proceden del autoempleo y de la explotación de recursos infrautilizados y cuyo cumplimiento fiscal se ve dificultado por los esquemas tradicionales de gestión tributaria. El análisis de sus vicisitudes, de las limitaciones legislativas de algunas jurisdicciones para adaptarse a esta nueva realidad y de la perspectiva de las plataformas, son el punto de partida del presente análisis. Seguidamente se identifican y estudian estrategias fiscales que, desde distintas jurisdicciones, están dirigidas a facilitar el cumplimiento tributario de estos nuevos perfiles de contribuyente. Estas propuestas se complementan con el estudio de diversas tipologías de relaciones de cooperación tributaria que apuntan en la misma dirección. ABSTRACT The development of the collaborative economy is giving rise to a new taxpayer profile whose income comes from self-employment and whose tax compliance is hindered by traditional tax management schemes. The analysis of its difficulties, the legislative limitations of some jurisdictions to adapt to this new reality and the perspective of the platforms, is the starting point of the work carried out. Next, we analyze tax strategies that, from different jurisdictions, are aimed at facilitating tax compliance of these new taxpayer profiles. These proposals are complemented by the study of different types of tax cooperative relationship
The development of the collaborative economy is giving rise to a new taxpayer profile whose income comes from self-employment and whose tax compliance is hindered by traditional tax management schemes. The analysis of its difficulties, the legislative limitations of some jurisdictions to adapt to this new reality and the perspective of the platforms, is the starting point of the work carried out. Next, we analyze tax strategies that, from different jurisdictions, are aimed at facilitating tax compliance of these new taxpayer profiles. These proposals are complemented by the study of different types of tax cooperative relationship
This chapter introduces the main actors involved in typical, triangular collaborative economy transactions: an online platform, a service provider and a user/consumer (otherwise known as a ‘prosumer’). It then focuses on the concept of remuneration, thereby stressing—congruently with the scope and aim of the book—that, in light of the consolidated case law of the Court of Justice of the European Union (CJEU) regarding internal market freedoms, only gainful economic activities are considered relevant for the purposes of the collaborative economy in the European Union (EU) legal order. However, gathering and exploiting personal data, through so-called ‘freemium’ mechanisms, represent forms of sui generis remuneration, worthy of specific attention. The chapter concludes by exploring the applicability of the Information Society Services Directive and the Database Directive. Finally, this chapter presents a first appraisal of the most recent case law of the CJEU in the so-called Uber saga as well as initiates a discussion on the opinion of Advocate General Szpunar in the Airbnb case.
Belgian Government Approves Simple and Low Tax Rates for Sharing Economy
- A De Croo
A. De Croo, Belgian
Government Approves Simple and Low Tax Rates for Sharing Economy (6 June 2016), https://www.decroo.belgium.be.
The compatibility of withholding taxes with EU freedoms has been discussed extensively by the CJEU, for instance
For an insightful discussion on pros and cons of using withholding taxes see F. Zimmer & R. Lyal, Withholding Taxes, in Taxation of Workers in Europe, at 303 (J.M. Moessner
ed., EATLP International Tax Series 2010). The compatibility of withholding taxes with EU freedoms has been discussed extensively by the CJEU, for instance, in Gerritse,
Scorpio and Truck Center. See ECJ, 12 June 2003, Case C-234/01, Arnoud Gerritse v. Finanzamt Neukölln-Nord;
The Italian Tax Authority claims that only resident companies can act as withholding agents
The Italian Tax Authority claims that only resident companies can act as withholding agents. See Italian Tax Authority, Circular Letter No. 1/RT/50550 (15 Dec. 1973);