Gig tax target: Uber and DoorDash need to report driver income to Revenue Canada

The Toronto Star spoke with financial expert Kelly Ho about how new tax rules create fairness among Canadians and opens the door for gig workers to ‘contribute to their future,’ in things such as RRSPs, CPP and EI.

New federal legislation requiring online platforms like Uber and DoorDash to report information about their workers’ income with the Canada Revenue Agency in the new year could shake up Canada’s gig economy. The legislation in question, Bill C-47, is an amendment to the Income Tax Act that calls for platforms to share the information about their workers to the CRA every year by Jan. 31.

The changes should serve as a reminder to gig workers to be careful about declaring income, even if it doesn’t fundamentally change how Canadians can, and should, file taxes, says H&R Block tax expert Yannick Lemay.

“It does not change how you should look at your taxes, because the rules for us, for the taxpayers, did not change,” Lemay said. “So it’s not changing how you report your income on your tax returns, but it changes how CRA might reconcile your income to find out if you have, indeed, declared all your income.”

Now, gig platforms will be required to report the name, date of birth, address and total income earned on the platform to the CRA, Lemay said, provided the worker in question logged more than 30 “activities” — which can be understood to be sales, trips, or assignments — on the platform and made over $2,800 on the platform during the year. According to a survey conducted by H&R Block, nine million Canadians are part of the gig economy. Of those, 43 per cent said they’d be willing to risk not declaring all of their income in an attempt to pay less in taxes.

Though popular platforms like Uber and DoorDash are believed to be among those impacted by the legislation, the CRA said they could not confirm which platforms are required to collect and report information on gig workers. Still, the agency defines a relevant “platform operator” as “an entity that contracts with sellers to make all or part of a platform (for example, software such as a website or application) available to them to connect with customers.”

Spokespeople for DoorDash and Uber told the Star they intend to comply with the reporting requirements by the deadline. Lyft and Skip the Dishes did not respond to requests for comment as to whether they intend to disclose the required information to CRA by the deadline. Though the platforms are required to give their gig workers a copy of the information they provide to the CRA, the detail in the disclosures could vary by platform, and discrepancies between what the platform and the worker file with the CRA could raise red flags, added Lemay.

Read the full article: thestar.com 
Published Dec 27, 2024

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