Apps like eBay and Airbnb will be reporting your earnings to tax authorities, under a new global agreement which took effect yesterday …
There are a number of apps which allow private citizens to earn money, from selling unwanted items to renting out your home while you’re on vacation.
Whether or not you have to pay tax on this income depends on an often complex set of rules which vary by country. In many countries, you can, in principle, resell items you have bought for personal use without tax liability, but there are often limits on how much you can earn from this before it is classified as trading and becomes taxable.
Similarly, you may be able to rent out your home – or a room – for a certain period, or up to a certain amount, without paying tax, but have to treat it as taxable income beyond those limits.
Many people are either unaware of the potential tax implications of app-generated income, or deliberately fail to report it. To counter both problems, the 38 members of the Organisation for Economic Cooperation and Development (OECD) have signed up to a new agreement under which app owners will automatically share your earnings with tax authorities in your country.
OECD members include the US, UK, many European countries, and others:
Austria, Australia, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.