Platform payments and records: what goes in the tax return

The income streams the ATO names

The ATO says a business with online activities may have several income streams. Its list:

• appearance fees, such as payment to present at a seminar, webinar or conference
• fees clients pay to watch a performance online, or to see content made personally for them
• income from monetising digital content, such as advertising revenue or creator payments from platforms
• income from selling goods, services or digital products through an online store or platform
• subscription fees for access to content
• tips and gratuities, including livestream payments

The creator guide’s own list of what a business creator must declare runs: “foreign income, cash, platform ad revenue, fees for appearing at events or advertising products/services, sponsorship and brand deals, affiliate commission, subscription income, tips and donations, and gifts/promotion of product (market value).” Commission for promoting other brands’ goods or services online is on the ATO’s commission list as well, and the same page says income earned through the sharing economy is assessable income.

In one ATO example, a creator who livestreams across several platforms receives payments straight from viewers in appreciation of the content, and must include them in her tax return as income.

Fan funding, crypto and prizes

Crowdfunding. Money raised from supporters through the internet or social media for a project may be partly or wholly assessable. It depends, the ATO says, on what the arrangement is, the creator’s role in it and their circumstances.

Crypto. A business’s income may include the market value of crypto assets received for goods or services it provides.

Prizes and awards. A prize or award a business receives, such as a cash prize for being the best business in its region, goes into its assessable income.

Overseas platforms and brands

Much creator income comes from abroad. The ATO says an Australian resident for tax purposes includes all income in their tax return, from Australian and overseas sources alike, converted to Australian dollars. A foreign resident pays income tax only on Australian-source income.

The ATO’s example is a resident creator paid monthly by an overseas video platform’s partner program, who also earns $25,000, converted to Australian dollars, from a US company she promotes through an affiliate link. Her return includes the platform payments, the $25,000 and all other foreign income, and if she paid tax in the US, a foreign income tax offset may be available to her.

After the posting stops

Old videos keep earning. The ATO says that payments from existing content may continue after new content stops, and still go in the tax return for the income year they are received. In the creator guide’s example of a reviewer who has stopped, the business has ceased, but the ATO says that “does not change the tax treatment of income that continues to be earned from content created while the business was operating.”

What stays out of business income

• GST. The ATO says gross income doesn’t include GST.
• A wage from a day job. A creator who also works as someone else’s employee reports that salary as salary and wages, not as business income.

One more rule can apply to income earned mainly through a person’s own skills or efforts. The ATO calls that personal services income, and says that where its special rules apply, they affect how the income is reported and the deductions that can be claimed.

The records behind the numbers

The creator guide tells a business creator to “Maintain records of all transactions relating to your business and keep them for at least 5 years”. The ATO’s record-keeping overview says a record generally needs, at minimum:

• the date, amount and description of the transaction, and the relevant GST information
• its purpose
• the relationships between the parties, if relevant.

For expenses that are partly personal, it asks for clear documents showing the business portion. Records must be in English or easy to convert to English.

Among the ATO’s five record-keeping rules: the relevant information must not be changed and must be stored so it is protected from change or damage, and the records must be available to show the ATO if it asks. The five years generally run from when the record was prepared or obtained, or from when the transaction was completed, whichever is later, and some records must be kept longer.

Platform statements and receipts mostly live online already. The ATO accepts digital images of paper records if they are true and clear copies that meet its record-keeping rules. For cloud storage, its page says to make sure the storage meets the record-keeping requirements and that “you download a complete copy of any records stored in the cloud before you change software provider and lose access to them.”