Under new plans proposed by the Irish tax authority, gig economy workers in the country could be charged tax as soon as they are paid, rather than paying an annual bill. The plans would see the online platforms that engage gig economy workers dock tax from pay when a job is completed.
According to the Irish tax authority Revenue Commissioners, such a model would deliver “convenience and certainty” for workers in the country’s gig economy. Workers employed by gig economy firms often face uncertainty over whether they should pay tax as a PAYE employee or as a self-employed worker. The tax authority also believes that the pay-as-you-go tax model would help to improve cash-flow for gig economy workers.
The plans would see gig economy platforms linked electronically to the tax service via a secure interface which would enable them to access a worker’s tax credits. The workers would then pay tax per job, rather than through the traditional annual November payment.
The plans were submitted as part of the Irish government’s Commission on Taxation and Welfare. Laying out the plans, Revenue Commissioners said: “Revenue’s vision is that these taxpayers could be taxed on a pay-as-you-go basis, with net liabilities being calculated on a real-time basis when services are ordered, provided and paid for via the platform.”
Revenue Commissioners added that potential EU rules could mean that digital platforms are forced to co-operate with rules set out by national tax authorities, meaning that the proposed rules could be imposed on gig economy firms operating in Ireland even if they are based overseas.
Revenue Commissioners added: “The tax obligations of those operating in the gig economy are no different from the tax obligations of those operating in any other sector of the economy”.
