Involved in the sharing economy? Know your tax obligations
What is the sharing economy?
The sharing economy is a way to consume and access property and services. In this economy, communities pool, loan, and share their resources through networks of trust, often using technology to connect.
The five key sectors of the sharing economy are:
What are your tax obligations?
If you participate in the sharing economy, you must report any income you earn through sharing-economy activities. You must also meet your goods and services tax/harmonized sales tax (GST/HST) reporting and remittance requirements.
If you report less sales or income than you actually earned, you are participating in the underground economy. This could result in serious consequences such as fines, penalties, or even jail time, in addition to paying the taxes owing on unreported amounts.
If you have to register for and collect GST/HST on your transactions, but you do not, the Canada Revenue Agency (CRA) will charge you interest or penalties, or both, depending on the circumstances.
Generally, if you are a small supplier whose supplies of GST/HST taxable property and services are $30,000 or less a year, you do not have to register for a GST/HST account. However, you can voluntarily register so that you can take advantage of input tax credits to recover the GST/HST paid or payable on your purchases and operating expenses. See more information about your GST/HST obligations.
How can you correct your tax affairs?
To correct your tax affairs and report income you did not report in previous years, you have several options:
- You can use ReFILE to submit adjustments to income tax and benefit returns for previous years using certified tax software.
- You may qualify in certain circumstances to use the Voluntary Disclosures Program. This program gives you a second chance to change a return you previously filed or to file a return you should have filed.
- Find out how to correct a GST/HST return.
For other options, see How to change your return.
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