Reporting Rules for Digital Platform Operators

What are the reporting rules for digital platform operators?

According to these tax rules, certain "digital platform operators" are now required to report income and other information about their contractors—known as "reportable sellers"—directly to the CRA.

A digital platform operator is essentially a website or app that people can use to sell goods or services within Canada. Some examples include Uber, Lyft, Etsy, and Airbnb. A reportable seller is someone who is registered on a digital platform to sell goods or services to customers. The reportable seller must reside in Canada or another country that has implemented these rules.

So, Uber, for example, is required to report information about the drivers who use their platform to earn money. One notable exception is that these new rules don't apply to sellers who completed less than 30 sales, for which they earned less than $2,800, on a certain platform within the calendar year.

Reportable sellers who don't provide this tax information to each platform they work with may receive a fine of $500.

What information will be sent to the CRA?

Digital platforms may ask reportable sellers to provide certain information to the CRA, such as their:

• name

• Social Insurance Number (SIN)

• primary address

• date of birth

• payments made or credited through the platform

• fees, commissions, or taxes withheld or charged by the platform

When did these tax rules take effect?

The new tax rules first applied to income earned during the 2024 tax year. So, all income earned starting January 1, 2024 onwards should be reported when you file your taxes.

The same deadlines apply each year, though they may slightly differ if January 31 falls on a weekend. If January 31 is on a Saturday, for example, digital platforms may need to provide the CRA with their tax information by January 30—the last business day before the end of the month.

Are there any exceptions to these tax rules?

There are a couple of notable exceptions to these CRA tax rules. Reportable sellers don't include people who:

• provided more than 2,000 services in relation to renting a property within the calendar year.

• completed less than 30 sales, for which they earned less than $2,800, on a certain platform within the calendar year, as mentioned above.

If you meet either of these criteria, you are considered an "excluded seller." These tax rules don't apply to excluded sellers because the CRA considers them a limited compliance risk. Meaning, the CRA isn't worried about these sellers reporting income from digital platforms on their taxes.

What were the old tax reporting rules?

Until 2024, digital platforms were not required to report specific information about their sellers to the CRA. It was left up to the sellers themselves to report the income they earned from different sources. The CRA introduced the new rules to ensure transparency and accountability, making it easier for sellers to report their income and understand their tax obligations.

Are there tax benefits to CRA's new reporting rules?

As the gig economy continues to grow, the CRA wants to be sure all revenue from digital platforms is accounted for. By setting these regulations, the CRA makes it more difficult for reportable sellers to hide or misreport income.

For contractors, there are certain tax benefits to reporting all income earned from digital platforms. Most importantly, you can claim expenses and deductions for this income, which can help offset some of your tax liability. When it comes to Uber tax reporting, for example, you might expense car lease payments, gas, and repairs.

How to follow these tax rules

It’s important to comply with these CRA reporting rules. You can use these best practices to help achieve a smoother tax-filing process:

• Respond to requests for information. Be ready to respond to digital platform operators' requests for information, such as your SIN and payment activity.

• Set aside money for taxes. If you're self employed, you won’t receive a T4 form. That means you're responsible for paying taxes on your income. You'll want to make sure you have the funds available to make these payments. To help, you could set aside 25% of your earnings each week or month.

• Revise old tax returns. If you haven’t reported income from digital platform operators in the past, you can opt to change your previous tax returns so they meet these new rules.

• Watch out for scams. Scammers may take advantage of these new tax rules. That is, they might pose as digital platform operators asking people for their SIN and financial information. Remember to only share your information with trusted and verified businesses.

How to report Uber and Lyft income on tax returns in Canada

You might've been wondering, “Do I report Uber on my taxes?” If you’re a driver who earns money through the app, the answer is yes. Uber and Lyft drivers must report all income and tips on their T1 income tax return. They must also complete Form T2125, Statement of Business or Professionals Activities each year. To fill out this form, you'll need information such as your:

• annual tax summary from the ride-share company you work with

• receipts for tax-deductible expenses

• total mileage for the year

• your SIN

Ride-share drivers must also register for a Goods and Services Tax/Harmonized Sales Tax (GST/HST) account once they start providing services through these apps. That means they have to charge, collect, and remit GST/HST to the CRA on all fares.

How does that work? For Uber driver tax reporting, specifically, you can add your GST/HST registration number to your Invoice Settings on the app; this allows you to receive the GST/HST from your trips each week. You can also check your monthly and annual Tax Summary to see how much you need to remit.

It's important to note that the CRA considers being a courier for a food delivery app—like Uber Eats or Instacart—and being a driver for a ride-sharing app—like Uber or Lyft—as two different business activities. So, there are different tax reporting requirements for each.

The main difference is that couriers, like people who deliver groceries, only have to register for a GST/HST account to collect and remit taxes once they earn more than $30,000 in a calendar year. You can still register for an account even if you earn less than that, but you’re not required to.

How to report Etsy income on tax returns in Canada

Etsy sellers have to report their tax information to the CRA if they meet the reportable seller requirements outlined above (if they complete more than 30 transactions and earn more than $2,800 in a year) or if they sell any “made-to-order” digital items in the calendar year.

Similar to couriers, Etsy sellers also don't have to register for a GST/HST account until they earn $30,000 or more in a calendar year.

To make filing your taxes even easier, TurboTax is directly integrated with Etsy. That means you can seamlessly connect your accounts and send your Etsy income information to TurboTax in just a few clicks.

Filing taxes in the gig economy

Working in the gig economy certainly has its upsides. You can make your own schedule, run a side hustle, and earn money in many different ways. Still, it can be tricky to file taxes as a self-employed contractor.

Now, with these CRA reporting rules, it's more important than ever to report all of your income at tax time—whether it's from renting your space on Airbnb or delivering groceries via Instacart. Also, remember to work with each digital platform operator so you know they're sending the right information to the CRA each year.

If you're in the know, taxes don't have to take the fun out of gig work. You can still enjoy earning money from different websites and apps—as long as you meet these new regulations.

Not sure where to start? TurboTax makes self-employed tax filing easy. Use our Self-Employed Tax Calculator to estimate your taxes and find deductions for your specific situation. And get step-by-step guidance so you always know which forms to file. Whether you want to file by yourself or get advice from a live tax expert as you go, TurboTax helps you make the most of your refund.

It doesn't have to be hard to do your taxes as a gig worker.

If you have more than one source of income, let TurboTax help you file with confidence.

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