Table of Contents 1 Sharing Economy ................................................................................................. 3 1.1 Platform Providers .......................................................................................... 3 2 Transport-Related Activities ................................................................................. 4 2.1 For an Individual ............................................................................................. 4 2.1.1 Taxi drivers using booking service operators ........................................... 4 2.1.2 Providing Chauffeured Ride Services using a Private-Hire Car (“PHC”) .. 5 2.1.3 Hiring out cars .......................................................................................... 5 2.1.4 Car-sharing .............................................................................................. 6 2.1.5 Performing Delivery Services ................................................................... 6 2.1.6 Social Carpooling ..................................................................................... 7 2.2 For a Company ............................................................................................... 7 2.3 GST Implications ............................................................................................ 9 2.3.1 Operator of Platform ................................................................................ 9 2.3.2 As a Principal ........................................................................................... 9 2.3.3 As an Agent ............................................................................................. 9 2.3.4 Car Owner/Driver ................................................................................... 10 3 Crowdfunding-Related Activities ......................................................................... 10 3.1 For an Individual ........................................................................................... 11 3.1.1 Borrower of Funds ................................................................................. 11 3.1.2 Operator of Platform .............................................................................. 12 3.1.3 Provider of Funds ................................................................................... 12 3.2 For a Company ............................................................................................. 12 3.3 GST Implications .......................................................................................... 13 3.3.1 Operator of Platform .............................................................................. 13 3.3.2 Borrower of Funds ................................................................................. 13 3.3.3 Provider of Funds ................................................................................... 14 4 Marketplace and Service-Related Activities ....................................................... 14 4.1 For an Individual ........................................................................................... 14 4.1.1 Selling or Renting of Goods/Products .................................................... 15 4.1.2 Providing a Service ................................................................................ 15 4.2 For a Company ............................................................................................. 16 4.3 GST Implications .......................................................................................... 16 4.3.1 Operator of Platform .............................................................................. 16 4.3.2 As a Principal ......................................................................................... 17 4.3.3 As an Agent ........................................................................................... 17 4.3.4 Seller of Goods/Services ....................................................................... 18 5 Filing Your Income Tax Returns ......................................................................... 18 5.1 As an Individual ............................................................................................ 18 5.2 As a Company .............................................................................................. 18 5.3 As a GST-Registered Trader ........................................................................ 19 6 Record Keeping .................................................................................................. 19 2 1 Sharing Economy The sharing economy is commonly used to describe peer-to-peer or business-to- consumer (B2C) sales transactions that are facilitated by community-based online platforms. This means that if you have derived income from using one of the many online platforms to provide a car ride, offer delivery services, rent out a car, provide funds to businesses and start-ups or provide goods and services to others, you are likely to be involved in the sharing economy. Generally, income derived from the sharing economy is subject to tax. This is so even if the activity is a sideline from which you derive part-time income. Correspondingly, expenses incurred to earn this income is deductible, subject to income tax rules. To help taxpayers better understand their tax obligations, we have provided information on broad segments of activities that typically constitute the sharing economy. 1.1 Platform Providers For platform providers i.e. companies which provide web portals that facilitate business transactions or activities related to the sharing economy, any income derived from the business operations carried on in Singapore is subject to tax. The company carrying out the activity will be regarded as carrying on a trade or business and the income derived from the operations (e.g. commissions, advertising fees, service fees, etc.) will be subject to tax. Business expenses that are incurred wholly and exclusively in the production of the company's income are generally deductible. For details on deductibility of business expenses, please refer to Business Expenses. Companies can claim capital allowances on qualifying fixed assets bought and used in its trade or business. For details on claiming capital allowances, please refer to Capital Allowances. 3 Companies should comply with the arm's length principle in transactions involving related parties, where applicable. For details on the application of the arm’s length principle, plese refer to Transfer Pricing. 2 Transport-Related Activities 2.1 For an Individual Your income earned from carrying on transport-related activities is taxable and should be reported as income earned from carrying on a trade, business, profession or vocation. This is especially if any of the following factors are present when you provide the services: - the activity is started with an intention of making a profit; - the activity is conducted in a regular and repeated manner; or - the activity is planned in a business-like or organised manner. 2.1.1 Taxi drivers using booking service operators If you are a registered taxi driver and you also use your taxi to derive income through mobile applications/platforms operated by booking service operators (“BSOs”), you need to declare this income as part of your trade or business income as a self-employed person. New! To simplify tax filing and ease the burden of record-keeping, with effect from Year of Assessment (YA) 2019 (i.e. income earned in 2018), you may opt to claim tax deduction for a deemed amount of expenses incurred calculated based on 60% of your driving income. This amount is deemed to be the sum of all expenses incurred (including taxi rental and diesel) while earning your driving income. Alternatively, you may opt to claim tax deduction based on actual expenses incurred. These expenses may include taxi rental fee, diesel expenses, taxi maintenance 4 expenses; administrative charges and commission paid to BSOs; and proportion of expenses for mobile phones used in the course of providing the services. For more information, please refer to Essential Information for Taxi Drivers 2.1.2 Providing Chauffeured Ride Services using a Private-Hire Car (“PHC”) You may have derived income from providing chauffeured ride services with a PHC via mobile applications/platforms operated by booking service operators (“BSOs”). Income derived from providing such chauffeured ride services is subject to tax, even if you have carried on the activities on a part-time or casual basis. With effect from Year of Assessment 2019 (i.e. for income earned in 2018), you may automatically enjoy tax deduction for a deemed amount of expenses incurred calculated based on 60% of your driving income. Alternatively, you may opt to claim tax deduction based on actual expenses incurred. These expenses may include car rental, fuel and parking fees. For more information on deductible expenses for sole-proprietors/partners, please refer to Car-related expenses incurred by the self-employed chauffeured private-hire car drivers 2.1.3 Hiring out cars If you are carrying on the business of hiring out cars and the cars are used by you principally for hiring, expenses incurred on the cars such as repair, maintenance, parking fees, petrol costs and car rental are deductible. You must maintain the following records: - The number of cars operated by your car hiring business; The operations of the business - manpower and roles, commercial presence (website, physical booth at airport, etc); - Daily tracking sheets