Sharing economy

A sharing economy is a business model where private individuals sell services or rent out assets directly or through intermediary companies.

The business models in the sharing economy are often based on making it easier to rent out underused assets. What this means for your tax will depend on the type of sharing economy that is being used:

Services and services in return

Some sharing models are based on services in kind, instead of money. This means that only services are involved, not money. For example: I lay a new roof on your house, and you put new windows in my house. It does not matter for the tax liability whether the benefits are received in the form of money or services in kind. If the conditions are otherwise met, all benefits gained through work, capital or enterprise will be considered taxable income.

What distinguishes a hobby from a commercial activity?

The boundary between hobby and commercial activity is not clearly defined.

To determine when an activity is a hobby or commercial activity, a specific assessment must be carried out to determine whether the activity:

  • is carried on at the business’s own expense and risk
  • has a certain scope
  • is likely to generate a surplus over time
  • is aimed at having a certain duration

Get help to find out whether you are self-employed

Using our wizard, you can answer up to five questions and get an indicative answer as to whether or not you are self-employed.

The wizard is intended for people who sell goods or services, blog or carry on small-scale letting.

Illegal income?

Illegal income is also taxable. The activity is taxable if it is obviously illegal or its legal status is uncertain. Activity that is illegal because no official licence or permit has been obtained for it does not constitute grounds for tax exemption; see the letter from the Ministry of Finance to the Directorate of Taxes of 8 September in Utv. 1999/200, which also states that “assuming that the general tax obligation conditions are otherwise met, it is necessary to establish a general rule concerning tax obligation regardless of whether a benefit is linked to illegal actions to a greater or lesser extent.”

 

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