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FFYS and Commissioner of Taxation [2021] AATA 1511

The Administrative Appeals Tribunal has found that an individual who earned income using the AirBnB platform to source bookings from guests staying in her home was not carrying on a business. Further, the Tribunal found that the taxpayer was making supplies of residential premises and not commercial residential premises so that the supplies were input taxed. As a result, the taxpayer was not entitled to jobkeeper payments under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (CERP Rules).

In FFYS and Commissioner of Taxation [2021] AATA 1511, Keni Josifoski appeared for the Commissioner led by Chris Sievers. The case concerned two issues. First, whether the taxpayer was carrying on a business on 1 March 2020 in respect of the AirBnB activity (as required by s 7(1)(a)(i) of the CERP Rules) and second, whether the taxpayer satisfied the decline in turnover test in s 8 of the CERP Rules (which adopts terms from the GST Act and specifically excludes from the test supplies that are input taxed, which are, among other things, supplies of “residential premises”).

The taxpayer contended that the AirBnB activity constituted a business and that she satisfied the decline in turnover test because she was making supplies of commercial residential premises and experienced the requisite decline in turnover.

The Tribunal found against the taxpayer on both issues.

As to the first issue, the Tribunal was of the view that the taxpayer merely repurposed a spare room in her home along with other domestic facilities in that home to make some extra money on the side. As to the second issue, the Tribunal concluded that the taxpayer did not satisfy the decline in turnover test as she was making supplies that were input taxed and therefore did not form part of her current and projected GST turnover. Ultimately, the absence of multiple occupancies in the home was a key and overwhelming distinction that set aside the taxpayer’s premises from anything similar to a hotel, motel, inn, hostel and boarding house.

Given the rising prevalence of the sharing economy through online platforms, the Tribunal’s decision also potentially has income tax and GST implications for activities undertaken through platforms such as AirBnB.

A copy of the Tribunal’s decision can be found here.

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