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OECD publishes model rules for tax reporting by gig economy platform operators–MNE Tax

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By Francesca Amaddeo, Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland

On 3 July, the OECD released model rules for tax reporting by platform operators that assist sellers in the sharing and gig economy.

Following international efforts to address the tax challenges in the digital economy, this OECD guidance represents an important step towards transparency through the exchange of information.

Digitalization has shifted traditional employment contracts to independent work and has brought together sellers and customers. Consider, for instance, how to peer-to-peer online marketplaces and food delivery companies have blossomed during the pandemic.

Many business sectors now exploit digital platforms to provide services, especially accommodation, transport, and personal services.

Activities, previously part of the so-called shadow economy, are carried on through such intermediaries, whose transactions and payments are recorded in electronic form.

Thus, tax administrations have a great opportunity to correctly assess taxpayers (both individuals and entities) involved in the gig economy.

Reporting platforms operators and due diligence rules

As is the case for the common reporting standard and the mandatory disclosure rules, intermediaries are the keystone of this new mechanism.

The model outlines reporting obligation for platform operators, i.e., entities which contract with sellers interested in providing their services to users through a specific software product.

Under the model, reporting platform operators are subject to rules introduced where they are resident, incorporated, or managed, regardless of where sellers and users are located.

Such entities must comply with specific due diligence rules. First, they must identify sellers subject to reporting requirements. All relevant data, including name, address, TIN, date of birth, or business registration number, must be carefully collected and verified.

This information shall be automatically sent to competent authorities and involved jurisdictions identified from data collected.

Automatic exchange of information usually ensures high-quality, relevant information to tax authorities.

Moreover, the timely transmission of information allows tax administrations to be aware of revenue earned by platform sellers, sometimes omitted on their tax returns.

Adoption of the model rules would enhance compliance and reduce burdens for taxpayers.

An information statement, including income earned through platforms, as fees, commissions, and taxes paid or withheld by the operator, would be provided to taxpayers.

Challenging goals

With this release, the OECD again provides model rules aiming to achieve important goals. 

Some states have already introduced unilateral domestic measures, leading to international gaps. The goal pursued by the OECD is to standardize reporting rules eventually adopted by jurisdictions on platform sellers.

Uniformity helps taxpayers comply with their requirements, especially when they carry on cross-border activities.

Uniformity also promotes international cooperation between different jurisdictions. International tax assistance is proving to be one of the most powerful instruments to tackle tax evasion and tax avoidance.

The digital economy is still on the top of the OECD list. Even the European Union is discussing the introduction of a new directive amending the 2011/16/EU on tax administrative cooperation extending the exchange of information to data from digital platform providers.

As often happens in discussing data disclosure, a question remains unsolved: what about taxpayers’ rights? Are these measures proportionate to their scope?

 Let’s just wait and see.

Francesca Amaddeo

Dr. Francesca Amaddeo, PhD in European law and national legal systems, is an Italian lawyer that works as Researcher at the Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI).

Francesca Amaddeo

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Judge rejects Prop. 22 backers’ attempt to change gig-work ballot language

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A Sacramento Superior Court judge on Tuesday rebuffed backers of Proposition 22, a referendum aiming to keep some gig workers as independent contractors, in their lawsuit claiming California Attorney General Xavier Becerra wrote a slanted description of their measure.

The attorney general writes the title, summary and label of an initiative that appear on the California ballot and ballot pamphlet and are vital to communicating to voters.

The Yes on 22 campaign charged that Becerra was biased and wrote language painting the measure in a negative light because he is suing Uber and Lyft, two of the major backers of Prop. 22, over their driver classification. Becerra’s lawsuit says that Uber and Lyft drivers should be employees under AB5, California’s new gig-work law — which is exactly what Prop. 22 seeks to avoid.

Besides Uber and Lyft, the other backers of Prop. 22 are DoorDash, Postmates and Instacart. The five companies have put up $110 million so far in their quest to convince voters that drivers and couriers should not be employees, which the companies say would destroy the flexibility those workers rely on. It would also cost the companies hundreds of millions of dollars, and potentially increase the prices consumers pay for rides and deliveries.

Becerra’s language accurately informs voters about the initiative, wrote Judge Laurie Earl in a tentative decision that will become final unless Yes on 22 requests a hearing.

The campaign has until Wednesday afternoon to make that request. The hearing would occur Thursday morning with each side limited to 30 minutes of oral arguments. Yes on 22 did not immediately say whether it will request the hearing.

The title written by Becerra that Yes on 22 objects to reads: “Exempts app-based transportation and delivery companies from providing employee benefits to certain drivers.”

The Yes on 22 campaign charged that “exempt” was a prejudicial term.

But the judge disagreed. “Read as a whole, this is not false, misleading, or inaccurate, and the use of the word ‘exempt’ in the ballot title does not make it so,” Earl wrote. In fact, she wrote, the ballot measure would exempt the companies from complying with various state laws applicable to employees.

Earl rejected Yes on 22’s claim that Becerra’s case against Uber and Lyft meant he was not impartial.

“This lawsuit is irrelevant,” the judge wrote, pointing to precedents that elected state officers are entitled to take public positions on matters of public importance.

The Yes on 22 provided a written statement responding to the ruling from Doug Mead, a freelance writer and Uber Eats and Postmates driver from Palm Springs. The campaign said he was among thousands of drivers who support remaining independent workers.

“The Attorney General is playing politics with the jobs of nearly one million Californians and threatening the services so many families rely on,” Mead’s statement read. “His biased and prejudicial description of Prop. 22 only benefits his special-interest supporters while doing a disservice to California voters.”

The No on 22 campaign, which is backed by organized labor, applauded the tentative ruling.

“The judge’s thoughtful deliberation on this ruling ensures that every Californian will know the unbiased truth when they fill out their ballots in November: Uber, Lyft, and DoorDash are trying to buy themselves a special exemption to roll back drivers’ rights,” said Mike Roth, spokesman for the No on Prop. 22 campaign.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid



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IWGB wins workers status and rights for gig economy couriers at CitySprint

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CITYSPRINT couriers’ status as workers with rights was confirmed once and for all today after the company was dragged back to an employment tribunal for the third time.

The Independent Workers Union of Great Britain (IWGB) claimed victory in its battle to gain basic employment rights for five gig-economy workers at the company. 

CitySprint had changed workers’ contracts rather than comply with a previous ruling that they are entitled to holiday pay and the legal minimum wage. 

The company could now be forced to give them thousands of pounds in lieu of the holidays they were denied once its financial liability is established at a final hearing in October.

Claimant Phil Weber said: “This victory over CitySprint shows what strength there is in being part of an active front-line union like the IWGB. I hope it gives others courage. 

“So many ‘gig economy’ courier companies wrongly classify their workforce as self-employed independent contractors. 

“We all know they’re playing the system to deny basic rights like holiday pay and pension contributions, but most workers are afraid to stand up for themselves because, as it is, there’s not enough work to go around and so little job security. We’re left fighting for scraps. 

“But when we are united and fight together, things can turn out very differently.”

The IWGB said it was appalled that it had had to take the company to an employment tribunal three times because the company “was so determined” to deny workers basic protections. 

But yesterday’s victory shows that even when terms of contracts are manipulated, union organising can still win the fight for workers’ rights, the IWGB added. 

General secretary Dr Jason Moyer Lee said: “CitySprint and other ‘gig economy’ companies are making a mockery of the British legal system.  

“If the law were enforced and sanctions were real, CitySprint wouldn’t have dreamed of simply acting like it hadn’t already lost a tribunal claim over its couriers’ workers’ rights. 

“In the absence of the state enforcing the law, the IWGB will continue to hold these cowboy companies to account.”

A separate £43,668.86 holiday pay claim is being made against Royal Mail-owned eCourier on behalf of three couriers transferred from CitySprint.

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Gig-Workers Across CA Protest in Advance of Judge’s Ruling

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Gig-Workers Across California Protest on Thursday 8/6 in Advance of Judge’s Ruling

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Gig-Workers Demand That Uber And Lyft Obey AB 5

This Thursday, August 6, gig-workers across the state of California will be participating in actions demanding that Uber and Lyft obey AB 5 and immediately reclassify their workers as employees. Workers will also be demanding that the companies drop their Prop 22 Ballot Initiative (which the company’s have committed to spend $110m on) which would roll back gig-workers’ rights. This statewide day of action comes in advance of a judge’s ruling on the preliminary injunction motion filed by the California Attorney General in the state’s lawsuit against Uber and Lyft, which will come down at 1:30 PM on Thursday.

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In Oakland, drivers from Gig Workers Rising, Rideshare Drivers United & We Drive Progress will be holding a rally titled “Workers Can’t Wait” to demand the employee status they are legally owed under AB 5. Workers will gather at the East Oakland Lyft Hub and, starting at 11:30 AM, various drivers will speak about the grave mistreatment by the companies and demanding that voters vote no on Prop 22.

In Los Angeles, Mobile Workers Alliance and Rideshare Drivers United will host a joint press conference at a Lyft hub. The action is scheduled to begin at 10:30 AM.

California Attorney General Xavier Becerra and a coalition of city attorneys filed an injunction in June to require Uber and Lyft to immediately begin obeying AB 5, which took effect in January. AB 5 requires the companies to reclassify their drivers as employees. Uber and Lyft argue that they shouldn’t be required to follow the law until after voters vote on Prop 22 in November. Becerra argues the harm currently facing drivers is so great that it would be neglectful to wait until the end of the current litigation. The law is clearly on the workers’ side.



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