Information obligations (Driving force)

    The research project ‘Future scenarios of platform work’ explores the economic, labour market and societal impacts of two types of platform work – platform-determined routine work and worker-initiated moderately skilled platform work – by 2030. The project identified eight key driving forces deemed to substantially influence the development of these two types of platform work. These driving forces and associated hypotheses were used to derive potential platform work scenarios, and, from these, pointers were developed on what policy could do to make a desirable future happen and to avoid an undesirable one. This is the definition of one of the eight key driving forces identified.


    Platform regulation is specific to platform work and can relate to various aspects of it, such as:

    • business regulation, addressing, for example, market access, competition and requirements for conducting business, including sector-specific approaches
    • taxation
    • labour and employment law, including collective labour law and regulation related to social protection
    • data protection and privacy
    • intellectual property rights
    • liability
    • soft law and self-regulation, such as codes of conduct

    As most of these elements are covered by other drivers considered in this project, this section will focus on the data-provision obligations of platforms and enforcement related to taxation (not only to the platform business itself but also to the services mediated through them and the affiliated workers) and social protection of the affiliated workers.

    Trends 

    As of mid-2020, specific platform regulation is very limited across Europe. This has important consequences for a number of aspects of work and business conduct, including earning levels and collective bargaining, as well as competition.

    While the actors in the platform economy are subject to taxation rules (such as corporate taxes and value-added tax (VAT)), difficulties in identifying the taxpayers and taxable income have emerged. These difficulties have been caused by a lack of information about service providers, aggressive corporate tax planning and differences in taxation practices across countries, combined with an insufficient exchange of information (European Commission, 2016). Accordingly, the European Commission (2016) encourages Member States to: 

    • apply functionally similar tax obligations to the platform economy as to traditional businesses that provide comparable services
    • raise awareness of and provide online information on tax obligations among platform economy actors
    • increase awareness of the platform economy business model among tax administrators
    • develop a commonly agreed standard to tackle tax issues in a coherent manner

    A few countries have introduced specific platform-related aspects in their national tax legislation. Below are three examples.

    • In Belgium, workers who are affiliated to officially registered platforms do not have to pay taxes or social security contributions on earnings up to a certain threshold. 
    • In Estonia, platform workers benefit from a simplified tax declaration. There is a general regulation for part-time self-employed that also covers platform workers, as well as specific agreements between the tax authority and two platforms (Taxify and Uber) to target the platform-determined type of work. 
    • In France, Law 2018-898 on the fight against fraud will require platforms to provide information on the tax and social security obligations of their users to the relevant authorities. Furthermore, it will establish a system of joint and several liability for the payment of VAT due by service providers using the platform.

    As these are relatively new pieces of legislation, it is not yet known how effective they will be, and there has been little discussion on their enforcement (or enforceability).

    Other trends relate to social protection. For example, there is a need to clarify the employment status of different types of platform workers. In the case of a platform where a platform owner hires employees, the platform owner is obliged to provide data to the relevant authority and is subject to the same enforcement pathways as any other employer in the traditional economy. When a platform worker is considered self-employed, they are personally responsible for declaring their work to the relevant authority. In some national regimes, minimum income thresholds will exempt some platform workers from social contributions. In other national regimes, it can be assumed that due to the fragmented and sometimes international character of platform work, work is not properly declared to the authorities. However, the data collection inherent to the platform business model provides opportunities to make work more transparent and details more easily shared with the authorities.

    Hypotheses

    The project applied a foresight methodology to derive possible future scenarios. As part of this, at least two realistic and mutually exclusive hypotheses were drafted for each of the key drivers to depict their potential future development.

    Three hypotheses were identified for this driver. 

    1. Platform information obligations regulated by the EU with national enforcement

    It is clearly regulated at EU level that all platforms must submit data on the revenue generated by workers for tasks assigned through the platform to the relevant tax and social insurance authorities. Enforcement of this regulation is the responsibility of individual Member States, hence differences regarding processes and procedures might occur. 

    2. Guidance provided by the EU on platforms’ information obligations, with a high degree of national discretion for implementation and enforcement

    At EU level, some guidance and recommendations are provided on how Member States could handle platforms’ obligations to submit data on the revenue generated by workers for tasks assigned through the platform to the relevant tax and social insurance authorities. How such obligations are specifically implemented is at the discretion of individual Member States, as is the enforcement of such regulation. Strictness of regulations, as well as processes and procedures for enforcement are likely to differ across Member States.

    3. No harmonisation attempt for platform information obligations at EU level

    The EU does not address platforms’ obligations to report information. Whether and how such obligations are implemented are at the full discretion of individual Member States, as is the enforcement of such regulation. Availability and strictness of regulations, as well as processes and procedures for enforcement are very likely to differ across Member States.

    Information sources

    • European Commission (2016), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A European agenda for the collaborative economy, COM(2016) 356 final, Brussels.
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