Chapter 1. Introduction

1.1. Scope of the project

1. The focus of the Forum on Tax Administration (FTA) project is to help ensure the effective taxation of those selling goods or services through sharing and gig economy platforms, a subset of multi-sided online platforms (OECD, 2015[1]).1 These platforms provide “end-to-end services” for their customers and, therefore, have electronic records of the payments made to platform sellers as well as some form of identifying information.

2. The rapid growth of multi-sided platforms has been one of the major changes to the economy facilitated by digitalisation (OECD, 2018[2]).2 Such platforms often facilitate transactions that occur outside of traditional business structures by:

  • Individual (including self-employed) sellers of goods and services to individual consumers. (The sharing and gig economy.)

  • Business sellers of goods and services to individual consumers – business-to-customer (B2C)

  • Business sellers of goods and services to business consumers – business-to-business (B2B)

3. The sharing economy is usually linked with assets and the gig economy with services. Of course, assets and services are often provided together (such as a driver and a car). Familiar examples are the temporary rental of a spare bedroom, unused apartment or parking space, or the provision of a service such as delivery of goods, occasional household services or the provision of transport or taxi services. These terms have also been expanded in some jurisdictions to encompass outright sales of assets via online platforms.

4. Some of the transactions facilitated by sharing and gig economy platforms have long been carried out through other mechanisms, for example by word-of-mouth recommendations or through community advertising and networking. In this context, it has traditionally been difficult for the tax administration to monitor and assess the amount and value of such transactions and to identify the individuals involved. As a result, some such activity has often taken place outside of the formal economy.

5. Digitalisation and the subsequent emergence of the platform economy has markedly increased the scale and scope of this issue by enabling large numbers of buyers and sellers to quickly and relatively cheaply connect and transact, including across jurisdictions and in an increasing range of areas.

6. The rationale for focussing on the sharing and gig economy is that platform sellers may often not be known to the tax administration and may be less likely than traditional businesses to understand their tax obligations, or that they even have tax obligations. As a result, if effective taxation is not assured, then given the rapid growth and proliferation of the sharing and gig economy, this may lead to a substantial growth in the informal economy over time, with detrimental impacts on competition and public revenues. Although the scale of non-compliance is not yet well measured and deserves further attention (including on a sector-by-sector basis), some tax administrations have discovered high levels of non-compliance in some sectors.

7. While often platform sellers in the sharing and gig economy will be individuals, including the self-employed, this will not always be the case. An example might be an incorporated business that rents out multiple apartments through a platform which may be used primarily by individual platform sellers for renting out single properties or rooms. However, trying to segment platform sellers in the sharing and gig economy on the basis of their taxable status (and carving them in or out of scope of particular requirements) could produce difficult boundary issues for tax administrations and individual platforms, such as when an individual changes status to become incorporated.

8. The issues explored in this project may also be useful in considering how tax administrations can best interact with a wider set of platforms beyond the sharing and gig economy, and in relation to indirect as well as direct tax, to ensure effective and efficient tax compliance.

Figure 1.1. Examples of sharing and gig economy sectors

1.2. Scale of the sharing and gig economy and key trends

9. The size of the sharing and gig economy is not yet well measured. It currently has a relatively small share of the economy on most estimates. However, it has been growing rapidly and in some jurisdictions may have a significant impact on some parts of the traditional economy.

10. Taken together the features of this business model suggest that its share may continue to grow strongly for a number of reasons, including:

  • the scale of partially utilised assets in private hands, which can include a wide variety of assets

  • the possible unmet demand for different working patterns, whether for more part-time, temporary or additional work

  • the convenience of use for participants, with low search and advertising costs and with electronic confirmation and payments

  • potentially lower costs where differential regulatory requirements are in place, for example where activity is carried out on a self-employed basis rather than as an employee or where there are different health-and-safety or insurance requirements. (This can raise wider public policy issues)

  • strong trust-enhancing mechanisms such as dispute resolution mechanisms, insurance schemes, ratings of other users etc.

11. Vaughan and Hawksworth (Vaughan and Hawksworth, 2014[3]) calculated that on a global basis the collaborative economy was worth USD 15 billion in 2014 and could reach USD 335 billion by 2025. Within the EU, Vaughan and Daverio (Vaughan and Daverio, 2016[4]) estimated that the five main sectors of the sharing economy generated nearly EUR 4 billion in revenues and facilitated USD 28 billion in transactions in 2015, exceeding earlier expectations of growth.

12. Goudin (Goudin, 2016[5]) estimated that the potential gains from removing barriers to bring underutilised assets into use could be of the order of USD 572 billion annually within the EU. Survey data also indicates a growing number of people who have engaged in digital transactions. A Pew Research Centre Survey (2016) of 4 787 US adults estimated that around 72% had used one of 11 different shared and on-demand services. Stokes et al. (2014) estimated that in 2014, 25% of the UK adult population used digital platforms to share assets or resources.

13. Many of the tax administrations involved in the FTA project have done or are currently undertaking analysis of the size and expected evolution of the sharing and gig economy (although under differing definitions). In general, this indicates that at this stage the sharing and gig economy occupies a small share of overall economic activity. In some jurisdictions, though, the share of accommodation and transport services provided through sharing and gig economy platforms is becoming increasingly significant.

14. Many tax administrations also report that significant numbers of people have undertaken transactions through sharing and gig economy platforms as well as a rapid growth in the number of platforms covering different economic activities. Most jurisdictions expect continued rapid growth over the coming years, albeit from a low base. This is broadly in line with the findings and expectations of private sector research, although growth may proceed very differently in different jurisdictions depending on national circumstances.

15. In terms of the economic activities of the platforms, participating tax administrations were asked to indicate the five main sharing and gig economy activities within their jurisdiction. The following sectors were reported to be the most significant at the present time (although the same will not be true in all jurisdictions):

  • short-term accommodation

  • transportation (taxi services, ride sharing, parking spaces)

  • peer-to-peer e-commerce

  • on-demand household services (such as support with household tasks, delivery, food preparation) and on demand professional services

  • peer-to-peer lending and crowd-funding.

Box 1.1. Scale of the sharing and gig economy and key trends – Country examples

In The People’s Republic of China the gross income of the sharing economy market was estimated at around EUR 55 billion in 2016. It is expected to expand at a rate of over 30% annually over the next five years.

In Denmark, property rental and transport are the most used parts of the sharing economy. In 2015, the total value of transactions facilitated by peer-to-peer online platforms in these two sectors was between EUR 57-84 million. There are approximately 140 multi-sided platforms, including the peer-to-peer online platforms, operating in Denmark. Around 17 % of the Danish population is estimated to have used sharing or gig economy services with around 4 % of the population involved in supplying such services.

Finland’s collaborative market was estimated to be around EUR 100 million in 2016 and is estimated to reach EUR 1.3 billion in 2020. In 2016, the largest sectors were collaborative finance at 65 %, accommodation and space for rental at 19% and small tasks and household services at 14 %.

In France, between 200 and 300 peer-to-peer online platforms provide services, with around one quarter based in third jurisdictions. The total turnover of these platforms is estimated between EUR 3 and 4 billion.

In Portugal, the main sharing economy activity is short-term accommodation, which received around 2.6 million guests in 2016 with total gross income of around EUR 206 million.

In Spain, the total size of the collaborative economy at present has been estimated by the Spanish Tax Agency (AEAT) to be around EUR 750 million, with tourist accommodation being the principle sector. The emergence of online platforms has changed the accommodation sector in Spain with tourist housing now offering more beds than hotels.

In the United Kingdom, research commissioned by HMRC estimated that around 11 % of the working age population in 2015/16 derived some income from taking part in sharing economy activities, equating to around 5.3 million people. The estimated total gross income was approximately GBP 8 billion and the annual mean individual income around GBP 1 700.

1.3. Opportunities, challenges and risks

1.3.1. Opportunities

16. The growth of sharing and gig economy platforms presents significant opportunities for tax administrations, if ways can be found to ensure the effective taxation of platform sellers.

17. First, the features of these platforms outlined above may bring activity previously carried out in the informal cash economy onto the platforms, possibly shrinking some parts of the cash economy. For sellers, these platforms offer a relatively inexpensive way of reaching a larger market. For buyers, the trust enhancing mechanisms and the competitive market place may outweigh the perceived advantages of cash discounts often offered in the informal economy. Unlike cash transactions, payments facilitated by the platforms are recorded in electronic form, including the identity of the parties (albeit to a varying extent). The recording of transactions itself may encourage greater voluntary compliance. If the information is accessible to tax administrations, this will also provide a better audit trail to track and encourage compliance or even for moving to compliance-by-design approaches such as pre-filled tax returns or withholding.

18. Second, these platforms often provide new opportunities for economic activity, potentially increasing productivity and innovation. This may help to drive growth and have positive impacts on government revenue. The growth impacts can take place directly through increased economic activity as well as indirectly through positive spillover effects on other parts of the economy. This can arise, for example, through increased tourism or greater demand for services as a result of increased transport opportunities etc. While important in all jurisdictions, the positive growth and revenue impacts may be particularly significant for those developing jurisdictions with large informal economies.

1.3.2. Challenges

19. There are a number of significant obstacles, though, to obtaining these benefits:

  • There may be uncertainty among some platform sellers as to what their tax liabilities are which may therefore reduce self-reporting. (This can be a difficult area. For example, there may be different liabilities and different methods of calculating tax liabilities for different transactions and types of taxpayer). This can both lead to genuine uncertainty and possible exploitation by those who may seek to use it as an excuse for non-reporting.

  • While most tax administrations will have legal powers to access information on an individual under investigation from a platform, those powers may not extend in all cases to accessing bulk information as regards all of their tax residents.

  • Tax administrations may not have legal powers to access information directly from a platform located in another jurisdiction. While exchange of information agreements between jurisdictions allow one tax administration to request tax relevant information from the host tax administration of the relevant platform, such requests usually have to be on the basis of named individuals or an identifiable group. Such information can be difficult to obtain by accessing the platform’s public website, both for technical reasons and because of restrictions arising from relevant data protection requirements. Even where such requests have been successfully made, the structure of the data supplied has not always been easy for the receiving tax administration to use.

1.3.3. Risks

20. As for risks, they are perhaps threefold. First, while effective taxation of platform sellers may reduce the informal economy as set out above, if this is not achieved then there could potentially be a significant growth in the informal economy. This could result both from the movement of some people from traditional employment (where their income is often reported by their employer) to sharing and gig economy work, and from the expansion of unreported sharing and gig economy activity in general. Second, this could lead to unfair competition with other businesses, which may reduce the profitability of those businesses and public revenue. Third – and this is outside the scope of this project – changes in the mix of taxable status in the economy (for example from employee to self-employed or incorporated status) can have important consequences for government revenue as different rules may apply for example on deductions and thresholds for income tax purposes and as regards social security contributions. This may generate other public policy concerns in addition, including from changes to certain employment rights.


[5] Goudin, P. (2016), The Cost of Non-Europe in the Sharing Economy: Economic, Social and Legal Challenges and Opportunities, European Parliamentary Research Service,

[2] OECD (2018), Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris,

[1] OECD (2015), Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris,

[4] Vaughan, R. and R. Daverio (2016), Assessing the size and presence of the collaborative economy in Europe, Publications Office of the European Union,

[3] Vaughan, R. and J. Hawksworth (2014), The sharing economy: how will it disrupt your business?, PricewaterhouseCoopers, (accessed on 15 January 2019).


← 1. Multi-sided business models are defined in section 4.3.4. of Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report.

← 2. See Chapter 2 of Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS.

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