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[Resources] Countermeasures by taxation on shared economy
Let's take a look at how countries around the world are responding to shared economic services. This time, we will take a look at the United States, Japan and France, look at Australia next time, and learn about the implications of taxation on shared economic services abroad.
First of all, in the U.S., income earned from participating in the shared economy, such as renting a room to another person through Airbnb or driving through Uber, will be taxable, and the exchange of goods is also defined as taxable income. The U.S. National Tax Service (IRS) has issued a 'Shared Economy Tax Guide' to help taxpayers with income from the shared economy meet their tax obligations and to facilitate reporting. The main points of the IRS (IRS) tax guide for the shared economy are as follows: First, the shared economy is generally taxable. It doesn't matter if the payment is cash, incidental to business, or side business. Second, taxpayers with requirements can deduct business expenses.
<사진 출처 : 매일경제>
For example, a taxpayer who uses a car for a shared economy project can deduct 54 cents a mile in standard deduction as of 2016, and if he or she receives rental income from a house or apartment, certain expenses can be deducted by applying a limit. In addition, the cost deduction for mortgage interest, property tax, disaster loss and depreciation can be made. Third, the special rules apply when a taxpayer rents a house, apartment or other dwelling and lives there. Taxpayers may also use the interactive Tax Assistant provided on the IRS website to determine whether their rental income is taxable or not and whether the costs associated with rental properties are deducted. On the other hand, if residential facilities are used for both rental and owner-occupied purposes, the total cost should generally be divided according to the area and number of days used for each purpose. In the U.S., you can see that the NTS already has a good understanding of the tax rates to provide guidelines.
Then what about Japan? Recently, the shared economy market has expanded rapidly in Japan, and the common economy in Japan is represented by Airbnb, a lodging company that rents empty houses or vacancies for travelers, Uber, and Mercuri, which uses personal vehicles to carry customers, and clothing on the Internet. Currently, under the Japanese Income Tax Act, a person's non-employment income exceeds 200,000 yen is required to report a firm report. Therefore, the biggest problem is that the income earned by the shared economy is regarded as a side job income, so it is mandatory to file a definitive report if the amount exceeds 200,000 yen, but the NTS is currently having a hard time figuring out the profits earned by individuals in transactions through the shared economy. In other words, the taxation on the shared economy is not going well because there is no system for accurate income information about who made how much money, and it is difficult to determine whether the business owner is a broker or an individual. In September 2017, the Government Tax Manufacturers Society, an advisory body for Japan's prime minister, discussed how to tax and collect income information on the shared economy, and the Japanese government is moving to strengthen taxation on the shared economy in which individuals exchange goods and services. In addition, the Japanese government is considering measures such as mandating the provision of transaction information to brokers of the common economy. However, the Japanese government says it plans to take into account overseas tax cases and reflect them in the tax system, as the clear taxation system for the shared economy has yet to be adjusted. The current situation in our country is most similar to that of Japan. If we find something to supplement with the taxation of shared economy services through research and cooperation with Japan, we wonder if there will be a more substantial taxation of shared economy.
France accounts for 23% of the global market for shared economies as of 2016, with Airbnb, Drivy and BlaBlaCar and more and more people getting supplemental income from the shared economy as the shared economy becomes active. In the case of France, the taxation principle for the shared economy was not clear until August 2016, but on August 30, 2016, the French administration began to firmly establish the taxation guidelines for the shared economy by issuing the tax guideline, 'Shared Economy – Non-taxable for a specific activity'. In France, in principle, income earned by individuals in all types of activities is taxable, including income related to services provided to other individuals to whom they are connected. Rental income from automobiles, apartments, tools, parking spaces, etc. is not considered to be common consumption, so they are subject to taxation and must be reported. For example, rental income from your residence through an Airbnb-type platform falls into the category of household leases. In other words, income tax and social security contributions from rental activities such as real estate are subject to taxation. In relation to social security contributions, the income from rental property activities (e.g., income from the Airbnb platform) is 23,000 euros and income from renting a copper (e.g., income from renting a Davy personal vehicle) is 7,845 euros, which is subject to a social security levy. Meanwhile, the guidelines issued by the tax authorities suggest that income taxes are exempted when the following two conditions are met: First, income is obtained from joint consumption. In this case, income related to a corporation or its own business or directly related to an individual's professional activities is not within the scope of common consumption. Second, revenue should not exceed total cost. If the income exceeds the cost burden, the surplus is subject to taxation. Blablaka, which is primarily a carpool, is therefore exempt from income tax if the revenue from it does not exceed the direct costs incurred during the service period. However, the French government has made it clear that tax benefits are not waived for vehicles that are not owned and borrowed.
We looked at the taxation of shared economy services in the United States, Japan and France. One method is not necessarily the answer to taxation. However, we hope that there will be more productive discussions in Korea as there will be conflicts between existing and shared economy operators rather than discussion of taxation. Next time, we will look at Australia's case of shared-economy taxation, and the implications of this case of shared-economy taxation abroad.
Let's take a look at how countries around the world are responding to shared economic services. This time, we will take a look at the United States, Japan and France, look at Australia next time, and learn about the implications of taxation on shared economic services abroad.
First of all, in the U.S., income earned from participating in the shared economy, such as renting a room to another person through Airbnb or driving through Uber, will be taxable, and the exchange of goods is also defined as taxable income. The U.S. National Tax Service (IRS) has issued a 'Shared Economy Tax Guide' to help taxpayers with income from the shared economy meet their tax obligations and to facilitate reporting. The main points of the IRS (IRS) tax guide for the shared economy are as follows: First, the shared economy is generally taxable. It doesn't matter if the payment is cash, incidental to business, or side business. Second, taxpayers with requirements can deduct business expenses.
<사진 출처 : 매일경제>
For example, a taxpayer who uses a car for a shared economy project can deduct 54 cents a mile in standard deduction as of 2016, and if he or she receives rental income from a house or apartment, certain expenses can be deducted by applying a limit. In addition, the cost deduction for mortgage interest, property tax, disaster loss and depreciation can be made. Third, the special rules apply when a taxpayer rents a house, apartment or other dwelling and lives there. Taxpayers may also use the interactive Tax Assistant provided on the IRS website to determine whether their rental income is taxable or not and whether the costs associated with rental properties are deducted. On the other hand, if residential facilities are used for both rental and owner-occupied purposes, the total cost should generally be divided according to the area and number of days used for each purpose. In the U.S., you can see that the NTS already has a good understanding of the tax rates to provide guidelines.
Then what about Japan? Recently, the shared economy market has expanded rapidly in Japan, and the common economy in Japan is represented by Airbnb, a lodging company that rents empty houses or vacancies for travelers, Uber, and Mercuri, which uses personal vehicles to carry customers, and clothing on the Internet. Currently, under the Japanese Income Tax Act, a person's non-employment income exceeds 200,000 yen is required to report a firm report. Therefore, the biggest problem is that the income earned by the shared economy is regarded as a side job income, so it is mandatory to file a definitive report if the amount exceeds 200,000 yen, but the NTS is currently having a hard time figuring out the profits earned by individuals in transactions through the shared economy. In other words, the taxation on the shared economy is not going well because there is no system for accurate income information about who made how much money, and it is difficult to determine whether the business owner is a broker or an individual. In September 2017, the Government Tax Manufacturers Society, an advisory body for Japan's prime minister, discussed how to tax and collect income information on the shared economy, and the Japanese government is moving to strengthen taxation on the shared economy in which individuals exchange goods and services. In addition, the Japanese government is considering measures such as mandating the provision of transaction information to brokers of the common economy. However, the Japanese government says it plans to take into account overseas tax cases and reflect them in the tax system, as the clear taxation system for the shared economy has yet to be adjusted. The current situation in our country is most similar to that of Japan. If we find something to supplement with the taxation of shared economy services through research and cooperation with Japan, we wonder if there will be a more substantial taxation of shared economy.
France accounts for 23% of the global market for shared economies as of 2016, with Airbnb, Drivy and BlaBlaCar and more and more people getting supplemental income from the shared economy as the shared economy becomes active. In the case of France, the taxation principle for the shared economy was not clear until August 2016, but on August 30, 2016, the French administration began to firmly establish the taxation guidelines for the shared economy by issuing the tax guideline, 'Shared Economy – Non-taxable for a specific activity'. In France, in principle, income earned by individuals in all types of activities is taxable, including income related to services provided to other individuals to whom they are connected. Rental income from automobiles, apartments, tools, parking spaces, etc. is not considered to be common consumption, so they are subject to taxation and must be reported. For example, rental income from your residence through an Airbnb-type platform falls into the category of household leases. In other words, income tax and social security contributions from rental activities such as real estate are subject to taxation. In relation to social security contributions, the income from rental property activities (e.g., income from the Airbnb platform) is 23,000 euros and income from renting a copper (e.g., income from renting a Davy personal vehicle) is 7,845 euros, which is subject to a social security levy. Meanwhile, the guidelines issued by the tax authorities suggest that income taxes are exempted when the following two conditions are met: First, income is obtained from joint consumption. In this case, income related to a corporation or its own business or directly related to an individual's professional activities is not within the scope of common consumption. Second, revenue should not exceed total cost. If the income exceeds the cost burden, the surplus is subject to taxation. Blablaka, which is primarily a carpool, is therefore exempt from income tax if the revenue from it does not exceed the direct costs incurred during the service period. However, the French government has made it clear that tax benefits are not waived for vehicles that are not owned and borrowed.
We looked at the taxation of shared economy services in the United States, Japan and France. One method is not necessarily the answer to taxation. However, we hope that there will be more productive discussions in Korea as there will be conflicts between existing and shared economy operators rather than discussion of taxation. Next time, we will look at Australia's case of shared-economy taxation, and the implications of this case of shared-economy taxation abroad.