Digital platforms now required to report income to CRA for online sellers, gig workers

Online sellers and gig workers have changes coming for the upcoming tax season, as digital platforms are now required to report income generated to the Canada Revenue Agency (CRA).

Platform operators — like Etsy, DoorDash, Uber or Airbnb — are now required to report the income of people in Canada earning revenue on their platforms. This requirement came into effect at the start of 2024, meaning income earned on digital platforms will be reported to the CRA for the upcoming tax year.

“The Reporting Rules for Digital Platform Operators pertain to the digital economy and its participants, particularly those in the sharing and gig economy,” the CRA says on its information page about the new requirements.

Digital platforms will be required to report income of sellers or operators who use the platforms.

Digital platforms and sellers or operators on the platforms are affected by these changes. Customers are unaffected.

Any platform that is based in Canada or has sellers or operators who work in Canada is bound by these new rules to report income to the CRA.

Anyone who sells products or services on the platforms in Canada with more than 30 sales or that exceed $2,800 in the calendar year will have their income reported by the digital platforms.

Relevant sales are goods, rental of real or immovable property, rideshare and delivery services, or personal services like time or task-based work.

Digital platforms are required to collect the legal name, registered office address, taxpayer identification number, identification or platforms they are reporting, and activity information about reportable sellers and report it to the CRA by Jan. 31.

As this is the first year of the reporting requirement, the CRA says it will waive late filing penalties up to July 31, 2025.

Sellers will also receive the information reported to the CRA by Jan. 31 each year.

Sellers will be required to report their name, primary address, tax identification number, date of birth (for an individual), business registration number (for an entity), financial account numbers, the name of the holder of the financial account, total paid or credited to the seller for the calendar year, and any fees or taxes withheld or charged by the platform operator.

If the seller rented real or immovable property, they will also be required to report the address of the property listing, the land registration number if available, the number of days each property listing was rented, and the type of each property listing.

H&R Block conducted a survey of gig workers, which estimates there are 9 million Canadians that earn an income from a digital platform.

“H&R Block research indicates that in 2024 around 9 million (28 per cent) of Canadians reported being part of the gig economy, of which 32 per cent said they were willing to risk not declaring ‘any’ income and 43 per cent are willing to risk not declaring ‘all’ income in an attempt to pay less in taxes,” Yannick Lemay, tax expert with H&R Block Canada, said in a news release.

Lemay advises that failing to declare income carries “significant risks” as it is a law to declare income and pay taxes on your income.

“The new reporting rules for gig platforms require operators to provide identifiable information on their users and their related income to the CRA,” Lemay said.

“If these reported amounts are not aligned with what gig workers declare through their tax filing, it could create significant red flags with the tax authority and lead to potential financial penalties. It’s imperative that Canadian gig workers understand and are compliant with the new reporting requirements through Bill C-47.”

RELATED: B.C. announces minimum wage and other labour protections for app-based gig workers

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