A digital single window for income data from platform work.
Date: 2020-05-19
Institutions: Directorate-General for Employment, Social Affairs and Inclusion
Subjects: Denmark, Estonia, France, cloud computing, data transmission, digital economy, income, online platform worker, social security, tax authorities, tax on income, tax system

A Digital Single Window for 
Income Data from Platform 
Work 

Vili Lehdonvirta and Daisy Ogembo, University of Oxford 
13 December 2019 

Social 
Europe 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Employment, Social Affairs and Inclusion 
Directorate B — Employment 
Unit B1 – Employment strategy 

Contact: EMPL-B1-UNIT@ec.europa.eu  

European Commission 
B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

A Digital Single Window for 
Income Data from Platform 
Work 

European Commission 
Directorate-General for Employment Social Affairs and Inclusion  
Directorate B 

2020 

 
 
 
 
 
 
 
 
LEGAL NOTICE 

Manuscript completed in December 2019 

Neither the European Commission nor any person acting on behalf of the European Commission is responsible 
for the use that might be made of the following information. The contents of this publication do not necessarily 
reflect the position or opinion of the European Commission. More information on the European Union is 
available on the Internet (http://www.europa.eu). 

Luxembourg: Publications Office of the European Union, 2020 

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A Digital Single Window for Income Data from Platform Work 

Table of contents 

1. 

INTRODUCTION AND BACKGROUND ......................................................................... 6 

2.  METHODOLOGY ................................................................................................... 10 

2.1.  Case countries: Denmark, Estonia, France ..................................................... 10 
2.2.  Case dimensions ......................................................................................... 12 

3. 

THE PLATFORM INCOME REPORTING SYSTEM IN DENMARK ...................................... 15 

3.1.  Motivation, Objectives, and History of the Reporting System ............................ 15 
3.2.  Design and Key Features of the Automatic Reporting System ........................... 18 
3.3.  Stakeholders .............................................................................................. 20 
3.4.  Challenges and Hurdles in Set-up and Implementation .................................... 20 
3.5.  Start-up and Running Costs ......................................................................... 21 
3.6.  Evaluation ................................................................................................. 21 

4. 

THE PLATFORM INCOME REPORTING SYSTEM IN ESTONIA ........................................ 21 

4.1.  Motivation, Objectives, and History of the Reporting System ............................ 21 
4.2.  Stakeholders .............................................................................................. 22 
4.3.  Design and Key Features of the Reporting System .......................................... 23 
4.4.  Challenges and Hurdles in Set-up and Implementation .................................... 24 
4.5.  Start-up and Running Costs ......................................................................... 24 
4.6.  Evaluation ................................................................................................. 25 

5. 

THE PLATFORM INCOME REPORTING SYSTEM IN FRANCE ......................................... 26 

5.1.  Motivation, Objectives, and History of the Reporting System ............................ 26 
5.2.  Design and Key Features of the Reporting System .......................................... 28 
5.3.  Stakeholders .............................................................................................. 30 
5.4.  Challenges and Hurdles in Set-up and Implementation .................................... 31 

6. 

CROSS-CASE ANALYSIS AND IMPLICATIONS AT THE EU LEVEL ................................. 33 

6.1.  Summary of findings ................................................................................... 33 
Implications at the EU level: Data Reporting Considerations ............................. 37 
6.2. 
Implications at the EU level: Driving Ethos and Principle-based Policy ............... 39 
6.3. 
Implications at the EU level: Eliciting compliance from international platforms .... 40 
6.4. 
Implications at the EU-level: Medium-term vs. Long-term Goal Setting ............. 40 
6.5. 

7. 

ALTERNATIVE MODELS FOR AN EU DIGITAL SINGLE WINDOW .................................. 41 

8. 

9. 

7.1.  The Network Model ..................................................................................... 41 
7.2.  The Hub and Spoke Model ........................................................................... 44 

CONCLUSIONS AND RECOMMENDATIONS ............................................................... 46 

APPENDIX ........................................................................................................... 49 

9.1.  Taxation of Platform Workers in France ......................................................... 49 
9.2.  Taxation  of  Drivers  Providing  Passenger  Transport  Services  through  Ride-

sharing Platforms in Estonia ......................................................................... 49 

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A Digital Single Window for Income Data from Platform Work 

1.  Introduction and Background 

Platform work  refers to “all labour provided through,  on, or mediated by platforms, and 

which 

features 

a  wide 

array 

of 

standard 

and 

non-standard  working 

arrangements/relationships.”1  It  is  typically  characterized  by  “a  way  of  working  that  is 

based  on  people  having  temporary  jobs  or  doing  separate  pieces  of  work,  each  paid 

separately,  rather  than  working  for  an  employer.”2  It  includes  both  localized  gig  work 

such  as  taxi  services  and  food  delivery,  as  well  as  web-based  platform  work  such  as 

graphic  design  and  data  entry.  According  to  a  European  Commission  Joint  Research 

Centre study, platform work is the main source of income for approximately two percent 

of adults across 14 EU member states, while up to eight percent earn occasional income 

from  it.3  Platform  work  has  thus  gained  a  foothold  in  European  labour  markets,  and  is 

presenting new challenges to policy makers. One of  these challenges is how to organize 

the taxation and social security coverage of platform work. There is currently a significant 

risk  that  much  of  platform  work  is  not  fully  taxed,  and  that  platform  workers  are  not 

adequately  covered  by  social  security  systems,  with  future  adverse  consequences  to 

individuals and public finances.4  

Part of the difficulty of taxing and extending social security coverage to platform workers 

stems from their employment status, which is complicated. In most but not all instances, 

platform workers are classified as self-employed contractors.5 The self-employed tend to 

have  significantly  lower  tax  compliance  than  employees  whose  salaries  and  wages  are 

subject  to  employer  withholding  schemes—this  is  well-documented  in  the  tax  evasion 

literature.6  Non-compliance  by  the  self-employed  is  often  a  result  of  a  combination  of 

1 EU-OSHA (2017), Protecting workers in the online platform economy: An overview of regulatory and policy 

developments in the EU, 13. 

2 https://dictionary.cambridge.org/dictionary/english/gig-economy 

3 Pesole, A., et al., 2018. Platform workers in Europe: Evidence from the COLLEEM survey. Joint Research 

Centre Technical Reports EUR 29275 EN. http://doi.org/10.2760/742789 

4 The Impact of the Digital Transformation on EU Labour Markets. Report of the High-level Expert Group, April 
2019; https://ec.europa.eu/social/main.jsp?langId=en&catId=1226&furtherNews=yes&newsId=9344. 

5 For purposes of this project, we assume that the vast majority of platform workers are regarded as self-

employed under the law. However, we acknowledge the limits of this assumption because of the diversity of 
employment categories in various countries. 

6 Milka Casanegra de Jantscher and Vito Tanzi, Presumptive Income Taxation; Administrative, Efficiency, and 
Equity Aspects (International Monetary Fund 1987); Benno Torgler, “The Importance of Faith: Tax Morale 
and Religiosity” (2006) 61 Journal of Economic Behavior & Organization 81; Joel Slemrod, “Cheating 
Ourselves: The Economics of Tax Evasion” (2007) 21 Journal of Economic Perspectives 25; Benno Torgler 
and Neven T Valev, “Gender and Public Attitudes Toward Corruption and Tax Evasion” (2010) 28 
Contemporary Economic Policy 554; Henrik Jacobsen Kleven and others, “Unwilling or Unable to Cheat? 
Evidence from a Tax Audit Experiment in Denmark” (2011) 79 Econometrica 651; Christoph Kogler, 
Stephan Muehlbacher and Erich Kirchler, “Testing the ‘Slippery Slope Framework’ among Self-Employed 
Taxpayers” (2015) 16 Economics of Governance 125; Ana Cinta G. Cabral, Christos Kotsogiannis and 

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A Digital Single Window for Income Data from Platform Work 

factors,  including  high  compliance  costs,  inadvertent  underreporting,  and  increased 

opportunity  for  outright  evasion.  The  self-employed  can  under-declare  their  income, 

exaggerate  their  deductible  expenses,  or  operate  wholly  in  the  shadow  economy.  And 

unlike  employees  whose  employers  handle  their  tax  and  social  security  compliance  for 

them,  the  self-employed  often  have  little  tax  knowledge,  struggle  to  navigate  complex 

compliance  rules,  and  cannot  afford  high  compliance  costs  such  as  the  cost  of  an 

accountant. 

Tax and social security compliance by platform workers is further complicated by the fact 

that these workers can also be involved in multiple simultaneous engagements, possibly 

on  different  terms,  and  therefore  have  different  employment  statuses  even  within  one 

country. Platform workers can moreover provide labour in multiple jurisdictions, thereby 

earning  income  that  may  be  taxable  in  more  than  one  member  state,  and  subject  to 

different  rules  on  deductibility  of  expenses  in  those  jurisdictions.  A  further  complication 

arises  when  one  attempts  to  apply  a  progressive  income  tax  to  platform  workers  even 

within  a  jurisdiction  and  more  so  across  borders.  Finally,  the  fact  that  companies 

operating  the  labour  platforms  are  often  based  outside  the  EU  compounds  these 

complexities.  

The proliferation of platform work thus poses significant revenue mobilisation challenges 

for tax and social contribution agencies and, if improperly managed, could contribute to 

an  increase  in  the  shadow  economy.  Non-compliance  could  also  result  in  an  unfair 

competitive  advantage  to  firms  utilizing  platform  work.  It  moreover  risks  creating  a 

growing  segment  of  the  workforce  with  inadequate  pension  and  other  social  insurance 

coverage:  “If  a  sizeable  segment  of  the  population  does  not  pay  social  contributions  or 

insurance and underpays on tax and pensions, this will eventually negatively impact the 

ability  of  national  social  protection  systems  to  provide  public  goods  and  social  benefits, 

while  the  demand  for  those  benefits  will  increase.”7  At  the  same  time,  it  is  likely  that 

many activities that were previously conducted wholly within the shadow economy, such 

as  unlicensed  taxi  services  and  unreported  self-employment  income,  have  now  become 

platform-mediated. This means that the activities are now, in a certain sense, formalised, 

in  that  they  leave  digital  data  traces.  Platform  work  thus  presents  challenges  but  also 

opportunities  for  achieving  proper  taxation  and  social  contribution  coverage  in  the  EU 

member states.  

Gareth Myles, “Self-Employment Income Gap in Great Britain: How Much and Who?” CESifo Economic 
Studies <https://academic.oup.com/cesifo/advancearticle/doi/10.1093/cesifo/ify015/5032456> accessed 
October 12 2018; Arun Advani, William Elming and Jonathan Shaw, “The Dynamic Effects of Tax Audits” 
[2017] IFS Working Paper W17/24 39.   

7 Platform Work: Types and Implications for Work and Employment – Literature Review 

https://www.eurofound.europa.eu/sites/default/files/wpef18004.pdf p. 100. 

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A Digital Single Window for Income Data from Platform Work 

To  address  the  challenges  and  seize  on  the  opportunities,  some  member  states  have 

embarked  on  initiatives  to  obtain  data  on  platform  workers’  earnings  directly  from  the 

platform  companies.  These  include  Estonia,  Denmark,  and  France,  which  have  taken 

various  legislative  and  technical  steps  towards  receiving  data  on  individuals’  earnings 

directly  from  platform  companies.8  These  initiatives  demonstrate  an  innovative  public 

sector  capable  of  adapting  to  new  technologies.  However,  there  is  a  risk  that  by  each 

member  state  developing  its  own  systems  and  protocols  for  receiving  data  from 

platforms,  they  may 

inadvertently  be  creating  a 

fragmented  and  demanding 

administrative  environment  for  platform  companies,  in  which  every  platform  company 

must  report  to  28  different  countries,  and  in  the  worst  case  to  multiple  different 

authorities in each country. This would pose a problem especially for European platform 

start-ups,  who  would  face  high  compliance  costs  in  their  home  market,  holding  back 

European innovation and compromising the notion of a Digital Single Market.  

At  the  same  time,  it  is  not  clear  that  all  member  states  and  all  agencies  within  them 

possess  the  resources  to  innovate  in  this  area  on  their  own.  In  at  least  one  case,  two 

platform companies volunteered to provide a direct data stream to a member state’s tax 

agency because they wanted to reduce the compliance cost shouldered by their workers. 

The  agency  had  to  turn  down  the  offer,  citing  a  lack  of  resources  to  receive  and  utilise 

such data.9 Moreover, web-based platform work is inherently transnational.10 The ability 

to take up digital work in multiple jurisdictions means that platform work is not merely a 

national  issue,  but  poses  a  regional  issue  for  all  tax  and  social  contribution  authorities 

across the  EU. For all these reasons, it has become necessary to consider potential EU-

level approaches to addressing the need for data on platform workers’ income for tax and 

social security purposes. 

In  this  report,  we  assess  the  viability  of  an  EU-level  “Digital  Single  Window”  that 

facilitates  the  automated  reporting  of  income  data  by  platforms  for  web-based  platform 

work,  and  the  forwarding  of  that  data  to  national  tax  and  social  security  agencies  for 

taxation  and  collection  according  to  national  rules.  The  concept  was  proposed  by  the 

High-Level  Expert  Group  on  the  Impact  of  the  Digital  Transformation  on  EU  Labour 

Markets  in  its  2019  report.11  The  concept  has  parallels  to  proposals  for  “Digital  Social 

8 OECD (2019), Policy Responses to New Forms of Work, OECD Publishing, Paris. 

https://doi.org/10.1787/0763f1b7-en p. 32. 

9 Ilsøe, A. and Larsen, T. P., 2019. Platform Capitalism in the Nordics – Regulated Labour Markets or Marginal 

Impact? Paper presented at SASE 2019, 26-29 June 2019, New York. 

10 Lehdonvirta, V., Kässi, O., Hjorth, I., Barnard, H., & Graham, M. (2019). The Global Platform Economy: A 
New Offshoring Institution Enabling Emerging-Economy Microproviders. Journal of Management 45(2): 
567-599. 

11 The Impact of the Digital Transformation on EU Labour Markets. Report of the High-level Expert Group, 

April 2019; https://ec.europa.eu/social/main.jsp?langId=en&catId=1226&furtherNews=yes&newsId=9344. 

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Security”12  and  to  a  recent  initiative  by  EU  member  state  tax  agencies  to  define  a 

taxation model for the “collaborative economy”, another name for platforms that mediate 

economic transactions.13 The OECD has also done related work.14 A Digital Single Window 

would provide four key opportunities: 

  Reporting: a medium through which platforms can report accurate earnings data, 

in respect of platform workers on their website, to tax and social security agencies 

in member states; 

  Simplification: a one-stop-shop that saves platforms from the complexity of 

reporting earnings data to multiple agencies in multiple jurisdictions; 

  Cost efficiency: a system that reduces the tax and social security compliance 

costs of platform companies and workers, in part by using automation; 

  Revenue collection: an increase in revenue collection and social security 

coverage due to authorities having more accurate and comprehensive earnings 

data.15 

In principle, an EU Digital Single Window could serve two functions: a disclosure function 

and an enforcement function. By disclosure function we refer to a system that facilitates 

income  data  reporting  at  the  EU  level,  in  order  to  facilitate  collection  at  member  state 

level.  By  enforcement  function,  we  refer  to  a  system  that  would  facilitate  actual  tax 

collection  and  distribution  to  member  states.  However,  direct  taxes  are  not  harmonised 

in  the  EU;  there  is  no  unanimity  in  how  the  platform  economy  should  be  taxed,  or 

consistency  in  how  it  is  taxed,  by  member  states.  Member  states  typically  differ  in  the 

way  that  they  define  income,  taxable  persons,  and  the  deductions  that  they  allow  in 

calculating taxable income; further, since digital platforms vary significantly and platform 

workers  themselves  may  choose  to  participate in  these  platforms  in  varied  ways,  it  has 

proven  difficult  to  harmonise  the  taxation  of  both  localized  and  web-based  platform 

12 Weber, Enzo (2019): Digital social security: Outline of a concept for the 21st century (Hans- Böckler-Stiftung. 

Working paper Forschungsförderung, 138), Düsseldorf 
https://www.boeckler.de/pdf/p_fofoe_WP_138_2019.pdf. 

13 TADEUS (2019) Tax ADministration European Union Summit (TADEUS) 2019 Outcomes Statement: 1st 

Plenary Meeting, Helsinki, Finland, 17-18 September. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/tadeus_2019_outcomes_statement_-
_1st_plenary_meeting_helsinki_finland.pdf 

14 OECD (2019), Policy Responses to New Forms of Work, OECD Publishing, Paris. 

https://doi.org/10.1787/0763f1b7-en p 32. OECD (2019), The Sharing and Gig Economy: Effective 
Taxation of Platform Sellers: Forum on Tax Administration, OECD Publishing, Paris. 
https://doi.org/10.1787/574b61f8-en. 

15 The Impact of the Digital Transformation on EU Labour Markets. Report of the High-level Expert Group, 

April 2019; https://ec.europa.eu/social/main.jsp?langId=en&catId=1226&furtherNews=yes&newsId=9344. 

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A Digital Single Window for Income Data from Platform Work 

work.16  Considerable  differences  in  the  social  security  systems  of  the  member  states 

pose  similar  difficulties.  In  this  report,  we  therefore  focus  on  the  concept  of  a  Digital 

Single Window for a disclosure function only, with enforcement to be  carried out on the 

member state level in accordance with local rules. 

In assessing the viability of a Digital Single Window, we critically evaluate: 

  The foundational requirements of such a set-up, by drawing from existing 

country-specific experiences and determining what it would take to scale up that 

set-up to the EU level—the key aims, limitations, design and functionalities, 

stakeholders, administrative capability, and infrastructure requirements. 

  The conditions and obstacles for setting up an EU-wide digital portal for reporting 

earnings data on digital platform work, bearing in mind that income tax and social 

security are not harmonised in the Union and that there is, therefore, substantial 

diversity in the legislation and administration of these systems in the member 

states; 

  The opportunities that a Digital Single Window would present and possible threats 

to the success of such a venture. 

2.  Methodology 

To achieve the objectives of this study, we used a case study approach. We first selected 

three member states that have initiated efforts to gain income data directly from labour 

platforms. We then used desktop research and unstructured interviews with  key experts 

from each country to construct a case study of each country’s efforts in this area. Cross-

case analysis was then conducted to identify potential gains that could be achieved and 

difficulties  or  risks  that  would  be  encountered  if  the  individual  national  efforts  were 

replaced  with  an  EU-level  approach.  Based  on  the  findings,  we  then  put  forward  two 

alternative  models  of  a  Digital  Single  Window  and  make  recommendations  for  a  pilot 

project. 

2.1. 

Case countries: Denmark, Estonia, France 

The three countries selected for case studies were Denmark, Estonia, and France. These 

countries  were  selected  for  study  because  of  the  unilateral  initiatives  that  they  have 

taken  to  set  up  reporting  systems  for  obtaining  income  data  from  platforms  for  the 

purposes of taxation and social security contributions. Other EU member states have also 

taken  steps  in  this  direction;  for  instance,  there  are  plans  in  the  United  Kingdom  for  a 

16 Pantazatou K., “Taxation of the Sharing Economy in the European Union” in John J. Infranca, Michèle Finck 
and Nestor M. Davidson (eds), The Cambridge Handbook of the Law of the Sharing Economy (Cambridge 
University Press 2018) p. 369. 

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A Digital Single Window for Income Data from Platform Work 

potential  “system  equivalent  to  PAYE  for  self-employed  platform  workers  (without 

affecting their employment status)”.17 However, the three selected cases are among the 

most advanced, and also have other attractive features for the purposes of this study. 

Denmark  is  an  interesting  case  because  of  its  commitment  to  developing  a 

technologically  sophisticated  mandatory  automated  income  reporting  system,  the 

technology of which could be later shared with other member states. Denmark’s Ministry 

of  Taxation  (SKAT)18  is  developing  an  application  programming  interface  (API)  through 

which platforms can report data directly into its systems. Although the Danish reporting 

system  is  not  yet  operational,  the  API  is  at  an  advanced  design  stage  and  is  going 

through technical pilots. Estonia provides a good comparison to the Danish case, because 

it  operates  a  voluntary  semi-automated  system  whereby  platforms  share  income  data 

with the tax agency (ECTB) digitally via email. Unlike the Danish fully automated system 

that  has  only  been  tested  in  pilot  projects,  the  Estonian  semi-automated  system  has 

been  operational  since  2017.  In  France,  the  data  reporting  system  has  only  just  been 

legislated for, and our case study does not include details of its technical implementation. 

We  nevertheless  include  France  as  a  more  limited  case  study  that  focuses  more  on  the 

legislative  history  and  details,  because  the  aims  of  its  new  legislation  appear  ambitious 

and cover taxation as  well as social security of platform workers.  The differences in the 

social security systems of the three countries are also notable and have implications for 

their data reporting systems. 

To  build  a  case  study  of  each  country,  we  conducted  desk  research,  which  consisted  of 

reviewing  websites,  press  releases,  legislative  materials,  and  previous  academic  and 

policy  literature  related  to  the  countries’  efforts  to  obtain  income  data  from  platforms. 

The  materials  consulted  are  cited  in  the  write-ups  of  the  studies  below.  This  desk 

research  was  complemented  with  a  small  number  of  unstructured  interviews  with  key 

experts  from  the  case  countries,  listed  in  Table  1.  The  interview  participants  were 

identified via previous literature and by contacting the relevant agencies. 

Table 1. Expert interview participants 

Martin Buur 

Product Owner, IT and Development Agency of the Danish 

Ministry of Taxation (SKAT) 

Antonio Casilli 

Associate  Professor,  Paris  School  of  Telecommunications 

17 Platforms, the Platform Economy and Tax Simplification (Office of Tax Simplification, 2018) p. 3. 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/729322/O
TS_platform_paper.pdf. 

18 Denmark has a Ministry of Taxation that consists of nine specialised agencies. One of the agencies, the IT and 
Development Agency, is developing the data reporting system in collaboration with other agencies. For 
simplicity, we will refer to the whole and its parts as SKAT. 

11 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

(Telecom Paris) 

Kirsi Haapakoski 

Tax  Policy  Officer,  DG  Taxation  and  Customs  Union, 

European Commission 

Anna Ilsøe 

Associate  Professor,  Employment  Relations  Research 

Centre (FAOS), University of Copenhagen 

Evelyn Liivamägi 

Head  of  the  Tax  Department,  Estonian  Tax  and  Customs 

Board (ETCB) 

Arto Lanamäki 

Postdoctoral  researcher  in  the  Interact  Research  Unit, 

University of Oulu 

Martin Villig 

Co-founder, Bolt (previously known as Taxify) 

(informant via 

email) 

We used the data collected via the desk research and the interviews to write up in-depth 

case  studies  on  Denmark  and  Estonia,  plus  a  more  concise  study  of  France.  The  case 

studies  aim  to  identify  the  history,  motivation,  objectives,  design  characteristics,  and 

functionalities  of  the  data  reporting  systems,  as  well  as  the  relevant  stakeholders, 

administrative  and  infrastructure  requirements,  costs,  and  any  evaluation  results. 

However,  it  was  not  possible  in  the  scope  of  this  study  to  examine  all  of  these 

dimensions comprehensively for each case country; therefore, the case studies focus on 

the most salient aspects of each case. These dimensions are introduced in detail below. 

The focus of this study is data reporting from web-based labour platforms. However, the 

national  systems  have  diverse  foci.  In  the  case  of  Denmark,  the  data  reporting  system 

will  initially  apply  only  to  letting  platforms19,  with  labour  platforms  planned  to  follow 

later. In Estonia, the voluntary system is currently used only by gig economy platforms, 

even  though  in  principle  web-based  labour  platforms  could  also  use  it.  In  France,  the 

system  is  intended  to  apply  to  all  kinds  of  labour  platforms.  Regardless  of  the  specific 

focus  of  these  national  initiatives,  many  of  their  experiences  are  likely  to  be  applicable 

also to the issue of obtaining data from web-based labour platforms.  

2.2. 

Case dimensions 

2.2.1. 

Motivation, Objectives, and History of the Reporting System 

The first objective of the case studies is to understand the history, initial motivation, and 

objectives  of  the  reporting  system  in  each  case  country.  Understanding  the  motivations 

and  objectives  behind  these  individual  systems  plays  a  vital  role  in  the  cross-case 

19 In order to crack down on undeclared income earned from casual sub-lets through platforms such as Airbnb. 

12 

 
 
 
 
                                                 
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analysis  process.  For  instance,  a  reporting  system  whose  main  objective  is  to lower  the 

compliance  costs  for  platform  workers  may  have  different  features  from  a  reporting 

system whose primary goal is to grant the tax authority greater administrative flexibility 

and  eliminate  tax  evasion  by  platform  workers.  It  is  not  necessarily  the  case  that  a 

system of earnings reporting by platform operators would lower the compliance costs of 

platform workers. It may be that such a system would facilitate the collection of data by 

the  tax  authority  but  may  not  necessarily  make  it  easier  and  cheaper  for  platform 

workers  to  work  out  and  pay  the  taxes  due.  Thus,  understanding  the  motivations  and 

objectives behind the domestic reporting systems provides context for distinctions in the 

nature,  quality,  and  outcomes  of  those  systems  and  provides  lessons  concerning  the 

potential of an EU-wide Digital Single Window. 

2.2.2. 

Stakeholders  

“It is rarely the case that everybody wins once they conform with policy.”20 Policymaking 

and  policy  implementation  always  involves  multiple  and  diverse  stakeholders  with 

varying,  and  sometimes  conflicting,  interests,  priorities,  and  objectives.  One  important 

goal  of  these  case  studies  is  to  gain  a  clear  understanding  of  the  intended  beneficiaries 

(and  their  intended  benefits)  of  the  reporting  systems,  the  stakeholders  in  the  process, 

including the groups who ought to have been part of the process but were deliberately or 

inadvertently omitted, and the instances of conflicting interests, objectives and priorities. 

The  most  obvious  stakeholders  in  the  proposed  Digital  Single  Window  are  tax  agencies, 

social insurance institutions, platform companies, and workers, but there may be others. 

A clear understanding of the nature and interests of domestic stakeholders plays a crucial 

role in the process of identifying and involving significant stakeholders in a cross-country 

initiative.   

2.2.3. 

Design and Key Features of the Reporting System 

The  legal  and  technical  design  of  an  income  reporting  system  is  vital  to  the  system’s 

effectiveness and success as well as the attainment of stakeholders’ objectives. A flaw in 

the  system  design,  for  instance,  a  system  whose  success  is  significantly  reliant  on  the 

integrity and diligence of the taxpayer, is likely to result in low uptake or lower reported 

income  than  anticipated.  We  analysed  the  design  of  the  reporting  systems  in  the  case 

countries, identifying the overall layout and unique features of each. The intention of this 

analysis and the overall analysis of the outcomes of the reporting systems is to ascertain 

20 Lanamäki A. and others, “Is a Taximeter a Guarantee of Honesty or a Barrier to Entry? Exploring Technology 
Discourse as Consequences of Policy Ambiguity”, Conference Paper presented at the Twenty-Seventh European 
Conference on Information Systems (ECIS2019) in Stockholm-Uppsala, Sweden. 

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features  and  design  options  that  result in  a  good  outcome,  and  adjustments  that  would 

be required to produce a successful Digital Single Window. 

2.2.4. 

Challenges and Hurdles in Set-up and Implementation 

We are naturally interested in uncovering what challenges and hurdles the case countries 

encountered  in  setting  up  and  implementing  their  reporting  systems.  Such  challenges 

could be technical, legal, or administrative in nature. We are moreover interested in what 

actions they took to overcome these challenges. 

Some  potential  challenges  that  can  be  foreseen  at  the  outset,  based  on  previous 

literature,  include  the  following.  First,  the  greater  involvement  of  platform  operators  in 

the  tax  affairs  of  platform  workers  could  put  the  workers  at  risk  of  acquiring  employee 

status, a situation that is likely to be undesirable to the platform operators, and to those 

platform workers who see themselves as genuinely self-employed and value some of the 

characteristics  of  self-employment.21  Another  potential  hurdle  regards  the  privacy  and 

data  protection  issues  that  arise  out  of  platform  operators  voluntarily  reporting  bulk 

information  about  their  users,  “in  particular  the  need  for  informed  taxpayer  consent, 

which in many countries needs to be freely given and capable of being withdrawn at any 

time.”22 Third, in addition to GDPR, there are strict confidentiality rules limiting many tax 

administrations for  constitutional law purposes and these rules predate, and are stronger 

than,  GDPR.  These  confidentiality  rules,  coupled  with  different  rules  on  transparency  in 

different  member  states,  may  present  a  significant  obstacle.  Sharing  information 

between  member  states  with  higher  levels  of  transparency  and  members  with  lower 

levels  of  transparency  will  be  tricky  and  this  has  been  demonstrated  by  previous  tax 

information  exchange  initiatives.  In  the  case  studies  we  will  seek  to  identify  any 

legislative  adjustments  or  design  choices  that  the  case  countries  have  had  to  make  to 

address these issues, and to analyse whether these adjustments would be suitable when 

reporting data on platform workers’ income at the EU-wide level. 

2.2.5. 

Start-up and Running Costs 

Income earned through platform work is still relatively small, but platform work is slowly 

becoming a more significant feature of the economy. It is estimated that, within the EU, 

“the five main sectors of the sharing economy generated nearly EUR 4 billion in revenues 

and  facilitated  USD  28  billion  in  transactions  in  2015,  exceeding  earlier  expectations  of 

21 Wood, A. J. & Lehdonvirta, V. (2019) Platform labour and structured antagonism: understanding the origins 

of protest in the gig economy. http://dx.doi.org/10.2139/ssrn.3357804. 

22 Aqib Aslam and Alpa Shah, Taxation and the Peer-to-Peer Economy; IMF Working Paper WP/17/187, p. 29. 

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growth.”23  An  essential  characteristic  of  a  sound  tax  system  is  that  it  should  be 

affordable;  the  cost  of  collecting  the  tax  should  not  be  higher  than  the  tax  collected. 

Thus, the initial investment and running costs of an income reporting system should not 

exceed  the  additional  income  collected  under  the  reporting  system.  We  have  sought  to 

ascertain whether the additional income reported, and additional tax collected as a result 

of  the  reporting  efforts  in the  case  countries,  warrant  the  start-up  and  running  costs  of 

an  income  reporting  system,  acknowledging  that  such  information  may  be  difficult  to 

obtain within the scope of this study. 

2.2.6. 

Evaluation Mechanisms 

We were also keen to determine whether the case countries have engaged in the process 

of  monitoring  the  implementation  of  the  reporting  systems,  evaluating  the  outcomes  to 

ascertain  the  level  of  achievement,  and  determining  the  views  of  the  stakeholders, 

including platform workers,  on outcomes  such  as compliance costs. Where a monitoring 

and  evaluation  exercise  has  been  undertaken,  the  conclusions  and  lessons  learnt  would 

be critical for any initiative towards a Digital Single Window. 

With these dimensions in mind, we now proceed to describe the case study findings. 

3.  The Platform Income Reporting System in Denmark 

3.1. 

Motivation, Objectives, and History of the Reporting System 

“There  are  approximately  140  multi-sided  platforms,  including  the  peer-to-peer  online 

platforms,  operating  in  Denmark…  with  around  4  %  of  the  population  involved  in 

supplying  such  services.”24  At  the  same  time,  there  has  been  very  little  regulatory 

response  to  the  platform  economy  in  Denmark.25  The  number  of  platforms  operating  in 

Denmark  is  a  testament  to  the  fact  that  the  government  is  not  necessarily  averse  to 

innovative  businesses;  however,  like  other  member  states,  Denmark  has  struggled  to 

reconcile its traditional regulations with the business models of platforms such as Uber.26 

23 OECD (2019), The Sharing and Gig Economy: Effective Taxation of Platform Sellers: Forum on Tax 

Administration, OECD Publishing, Paris. https://doi.org/10.1787/574b61f8-en p. 17 citing Vaughan, R. and 
R. Daverio (2016), Assessing the Size and Presence of the Collaborative Economy in Europe, Publications 
Office of the European Union, http://dx.doi.org/10.2873/971404. 

24 OECD (2019), The Sharing and Gig Economy: Effective Taxation of Platform Sellers: Forum on Tax 

Administration, OECD Publishing, Paris. https://doi.org/10.1787/574b61f8-en p. 18. 

25 Ilsøe A. and Madsen L.W., “Industrial Relations and Social Dialogue in the Age of Collaborative Economy 

(IRSDACE): National Report Denmark” (2018) FAOS Research Paper 163 p. 4. 

26 Ibid p. 10-11. 

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In  collecting  income  data  from  platforms,  the  Danish  Ministry  of  Taxation  (SKAT)  has 

adopted two approaches: conducting ordinary targeted tax audits in order to get income 

data  for  previous  tax  years  and  setting  up  an  automated  income  reporting  system  for 

future use with potentially all platforms. 

3.1.1. 

Ordinary Targeted Tax Audits 

In technical terms, the audits carried out by SKAT were not a real-time digital reporting 

system,  but  ordinary  audits  where  targeted  platforms  were  compelled  to  report  users’ 

income  data  covering  specified  tax  years.  As  is  typical  in  tax  administration,  not  much 

information  is  made  available  about  the  audits.  However,  it  has  been  publicly  reported 

that SKAT selected five platforms27 and made a mandatory request for user income data. 

Unlike  the  French  case  where  the  new  legislation  empowers  the  French  tax  agency  to 

impose  mandatory  reporting  on  all  platforms  regardless  of  their  place  of  incorporation 

and  operation,28  SKAT’s  enforcement  powers  over  platforms  that  are  not  registered  in 

Denmark are limited and therefore the audits covered Danish platforms only.  

Danish  legislation  compels  any  entity  that  receives  a  request  for  a  taxpayer’s  income 

data  from  SKAT  to  submit  such  data  without  the  need  for  further  consent  from  the 

taxpayer;  thus,  these  platforms  were  not  obliged  to  obtain  consent  from  their  users 

before  reporting  their  data.  Alongside  these  audits,  in  September  2016,  the  Dutch  tax 

agency  handed  over  to  SKAT  information  from  Uber’s  platform  on  income  earned  by 

2,233  Uber  drivers  in  Denmark  in  2014  and  2015.  The  Dutch  tax  agency  had  access  to 

this data because Uber’s European operations are headquartered in Amsterdam. 

SKAT identified a significant amount of uncollected revenue through these initiatives. For 

instance,  on  the  basis  of  the  information  received  from  the  Dutch  tax  agency,  SKAT 

demanded  additional  €1.7  million  in  tax  from  1,200  Uber  drivers  for  income  earned  in 

2014  and  2015.29  With  respect  to  the  audits  conducted  on  the  five  platforms,  SKAT 

surveyed  844  citizens  who  earned  income  through  platform  work  in  2017;  the  citizens 

were  selected  from  the  five  platforms  picked  for  the  audit.30  According  to  preliminary 

evaluation,  95%  of  the  surveyed  platform  workers  did  not  file  accurate  tax  returns, 

27 The identity of these platforms has not been publicly shared. 

28 See the French case in section 5 below. 

29 Ilsøe A. and Madsen L.W., “Industrial Relations and Social Dialogue in the Age of Collaborative Economy 

(IRSDACE): National Report Denmark” (2018) FAOS Research Paper 163, p. 4. 

30 Ibid. 

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resulting  in  revenue  loss  to  the  tune  of  nine  million  kroner  (approx.  €830,000).31  Web-

based  labour  platforms  were  not  part  of  the  audit,  so  the  actual  revenue  loss  is  likely 

higher than what was uncovered in the audit.  

Some  caution  is  necessary  in  interpreting  this  result.  For  instance,  it  is  difficult  to 

ascertain whether the inaccurate filing of tax returns was a result of complexity and poor 

tax education or deliberate tax evasion. Arguably, most Danes are very passive when it 

comes to income reporting because they are used  to third-party reporting and automatic 

withholding of taxes on salaried income and other income by their employers or banks.32 

Thus,  there  is  lack  of  participation  in  tax  compliance  and  the  idea  of  filing  one’s  own 

returns  is  a  very  foreign  concept  for  many  platform  workers,  particularly  those  earning 

additional income from moonlighting, when they have never had to file their own returns 

before  and  are  suddenly  faced  with  very  complex  compliance  rules.  Further,  income 

earned on platforms such as Uber is time consuming to report because the worker has to 

factor in complex deductions as well.33 The complexity and cost of compliance, bearing in 

mind  the  small  amounts  earned  through  platform  work,  are  likely  to  be  significant 

contributing  factors  to  the  underreporting  witnessed  by  SKAT.  This  outcome  suggests 

that  an  automated  income  data  reporting  system  could  significantly  improve  tax  and 

social insurance  compliance,  whilst  reducing  compliance  costs  to  those  workers  who  did 

comply. 

3.1.2. 

 Automatic Income Reporting System 

In  parallel  with  the  audit,  the  idea  of  an  automatic  income  reporting  system  started  to 

emerge  at  SKAT.  The  idea  was  driven  by  demand  from  Danish  platforms,  citizens, 

politicians, and various government departments, who desired a solution to address the 

lack of automatic reporting of income earned through platforms.34 Today, the solution is 

in  advanced  stages  of  development,  with  a  technical  pilot  involving  several  platforms 

ongoing.  The  purpose  of  the  technical  pilot  is  to  investigate  the  technical  feasibility  of 

having  an  automated  reporting  scheme  and  technology  to  support  platforms  and 

taxation.  The  technical  pilot,  together  with  other  initiatives  by  SKAT,  led  to  the 

recognition  that  new  legislation  was  needed  for  collection  of  income  data  for  tax 

purposes,  with  a  new  law  being  passed  on  20  December  2018  stating  that  digital 

31 Interview with Anna Ilsøe, Associate Professor at the Employment Relations Research Centre (FAOS) 

University of Copenhagen (Telephone Interview, 10 September 2019). See also newspaper reporting at 
https://fagbladet3f.dk/artikel/platform-medarbejdere-opgiver-ikke-korrekt-indkomst. 

32 Ibid. 

33 Ibid. 

34 Interview with Martin Christian Buur, Officer in the Danish Agency for Development and Simplification, part 

of the tax administration (Telephone Interview, 7 October 2019). 

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platforms that facilitate letting should report all income earned by users of the platforms 

to  the  Danish  tax  authorities.35  Gig  work  platforms  were  also  considered  but  excluded 

from the scope of this initial legislation because of the complexity presented by the social 

contribution  rules  in  Denmark.  Therefore,  even  though  the  technical  pilot  included  all 

kinds of platforms, once the official automatic income reporting system is launched, it will 

only  apply  to  letting  platforms  for  now  (eg.  short-term  accommodation  rental,  car 

rental). This hurdle will be discussed further in section 3.4. 

3.2. 

Design and Key Features of the Automatic Reporting System 

As  explained  above,  SKAT  is  currently  working  on  a  digital  solution  that  would  facilitate 

automatic income reporting for Danish platforms. SKAT’s objective is to balance its need 

to  know  the  income  earned  through  these  platforms  with  the  platforms’  need  for  a 

flexible system that meets their dynamic nature and fast-changing needs. Thus, SKAT is 

building  an  API  that  is  similar  to  what  platform  companies  are  used  to  using  when 

interfacing  with  external  systems,36  so  that  there  are  minimal  additional  compliance 

obligations  for  the  platforms.  SKAT’s  key  priority  is  to  make  compliance  as  easy  as 

possible  so  as  not  to  disadvantage  Danish  platforms,  since  large  international  platforms 

are more likely to easily navigate complex compliance obligations. Regarding the issue of 

taxpayer  consent,  under  Danish  law,  if  a  company  or  other  entity  is  required  to  report 

income to SKAT, the citizen is obligated to facilitate this.37 Thus, there are no legislative 

barriers to automatic income data reporting without express consent of the taxpayer.  

SKAT consulted platforms regarding whether they preferred annual or transaction-based 

reporting;  based  on  the  feedback  they  received,  the  preferences  were  equally  split 

between the two options. SKAT has therefore built a system that can be utilised for both 

types  of  reports; all platforms must  report income  earned by their users by the 20th of 

January,  but  can  opt  to  do  so  in  one  go  or  throughout  the  year  on  a  per-transaction 

basis.38 SKAT then follows their existing practice for making the income data available to 

other  government  authorities 

for  purposes  such  as  calculating  social  security 

contributions. 

35 Ibid. 

36 In technical terms, the API is made available to platform companies as a RESTful web service. 

37 Ibid. 

38 Ibid. 

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Figure 1. Design of the Danish tax authority’s (SKAT) system for receiving automated 

income data from platforms. 

The  type  of  data  expected  to  be  collected  through  the  API  is  quite  simple  (Figure  1); 

SKAT  will  not  know  who  the  users  let  their  property  to,  but  they  will  know  the  income 

year,  taxpayer  identity,  address,  and  the  amount  of  money  that  the  user  received.  In 

Denmark, taxpayers are usually identified by their social security number, which is used 

as  the  taxpayer  identification  number  (TIN).  While  obtaining  the  taxpayers’  social 

security numbers is therefore the obvious means to identify taxpayers, the platforms did 

not want to request social security numbers from users; the culture in Denmark is such 

that  citizens  are  hesitant  because  of  fraud  concerns  to  share  this  vital  number  that  is 

linked  to  all  their  government  data  and  services.39  The  platform  operators  therefore 

feared  that  requesting  social  security  numbers  from  users  would  result  in  them  shying 

away from using the platforms. Thus, SKAT built a system where users first verify their 

identity  through  a  portal  maintained  by  SKAT  when  signing  up  for  or  logging  in  to  the 

platform, after which the portal sends the platform a token number, which the platform 

can  use  to  identify  the  user  to  SKAT.  The  token  number  that  the  platform  receives  is 

meaningless in the hands of anyone else, but it is a stable identity number that SKAT can 

link to the user’s social security number.40 The rough design of the system is illustrated 

in Figure 1. 

The 2018 legislation allows letting platforms that do not have a registered presence or a 

permanent establishment in Denmark to operate as if they did for purposes of submitting 

their  users’  income  data.  Since  SKAT  would  find  it  extremely  difficult  to  enforce  the 

legislation  if  such  platforms  chose  not  to  comply,  the  legislation  incentivises  these 

platforms by providing that the users whose platforms report their income directly enjoy 

a  higher  income  threshold  before  they  become  liable  for  tax  on  their  earnings.41  This 

39 Ibid. 

40 Ibid. 

41 Ilsøe A. and Madsen L.W., “Industrial Relations and Social Dialogue in the Age of Collaborative Economy 

(IRSDACE): National Report Denmark” (2018) FAOS Research Paper 163, p. 19. 

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A Digital Single Window for Income Data from Platform Work 

approach seems to have been successful: in 2018 a letter of intent was signed between 

the  Danish  Ministry  of  Taxation  and  Airbnb  (which  lacks  a  registered  presence  or 

permanent  establishment  in  Denmark),  where  Airbnb  consented  to  using  this  system, 

stating that they were keen to support any initiative that would enhance transparency in 

the platform economy.42 

SKAT’s intention is to have the system operating in July 2020, to then spend six months 

educating platform operators and internal staff, and then receive the first official income 

data in 2021. 

3.3. 

Stakeholders  

It  is  clear  from  the  development  of  the  Danish  income  reporting  system  that  the 

platforms  have  been  viewed  as  equal  partners  and  important  stakeholders  in  the 

development  process.  SKAT  has  engaged  the  platforms  as  stakeholders,  right  from  the 

beginning,  through  technical  pilots  and  consultations.  SKAT  continues  to  engage  the 

platforms and, at this time, has given access to the API to one platform to verify that it 

works  as  expected.43  A  key  priority  was  designing  an  API  that  is  compatible  with  the 

platforms’ systems and that can convert the data received from the platforms into a form 

that  can  be  read  by  SKAT’s  older  systems.  Stakeholder  involvement  was  viewed  as 

critical  in  ensuring  that  the  reporting  system  does  not  create  unnecessary  compliance 

burdens for platforms and their users. 

3.4. 

Challenges and Hurdles in Set-up and Implementation  

The  technical  pilot  covered  all  types  of  platforms  including  both  letting  and  gig  work 

platforms. However, the key limitation in the Danish case is the fact that the legislation 

requiring  platforms  to  automatically  report  income  earned  by  their  users  is  limited  to 

platforms that facilitate letting of property (homes,  cars, etc.). Web-based and local gig 

platforms will therefore be outside the scope of the automatic data reporting system once 

it is officially launched. These platforms were not included in the 2018 legislation because 

of  Denmark’s  complex  social  security  legislation.44  Indeed,  it  has  turned  out  to  be 

challenging  to  secure  gig  economy  workers  within  Denmark’s  comprehensive  but 

complex social security system. The social security system relies on assumptions that are 

not in tune with the realities of gig work as it is practiced in Denmark today. Determining 

social  contributions  due  from  income  earned  from  letting is less  complex,  and  therefore 

42 Interview with Anna Ilsøe (see footnote 31) and Martin Christian Buur (see footnote 34). 

43 Interview with Martin Christian Buur (see footnote 34). 

44 Ibid. 

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the  initial  data  reporting  legislation  focused  on  letting.45  There  is  no  technical  or  data 

related  barrier  to  including  labour  platforms  in  the  automatic  data  reporting  system; 

rather, the challenge is in solving how social security ought to work for gig workers in the 

first place. 

Due to the tax-positive attitude in Denmark, several non-letting platforms have sought to 

join  the  automatic  income  reporting  initiative,  but  they  have  had  to  be  turned  away 

because  of  these  legislative  and  administrative  limitations.46  These  Danish  service  or 

web-based platforms are demanding to be included in the legislation and want to be part 

of  the  group  that  benefits  from  the  new  API  system,  but  at  this  time  the  law  does  not 

facilitate  their  involvement.  However,  the  Danish  government  is  looking  at  how  to 

urgently address this challenge. 

3.5. 

Start-up and Running Costs 

The start-up costs of the API system is significant; the Danish government has invested 

approximately  40  million  Danish  kroner  (€6.8m)  to  develop  the  system.  A  large  part  of 

the  investment  has  gone  into  developing  technology  to  convert  data  generated  by 

platforms  into  formats  compatible  with  the  old  information  systems  in  the  tax  agency. 

However, this investment is comparable in size to other development projects within the 

tax  administration.  Regarding  running  costs,  at  this  time  SKAT  does  not  expect  a  lot  of 

manual work to be necessary on the data, but this all depends on the quality of the data 

that  they  ultimately  receive  from  platforms.  Thus,  it  is  difficult  to  estimate  the  running 

costs until the system is adopted by all platforms. 

3.6. 

Evaluation 

SKAT’s  initiatives  around  the  taxation  of  platform  income  have  evolved  over  time  and 

have  included  evaluation  such  as  the  audit  detailed  above.  The  automatic  income 

reporting system is in advanced stages of development and is undergoing technical pilot 

testing, but no specific evaluation results are yet available. 

4.   The Platform Income Reporting System in Estonia 

4.1. 

Motivation, Objectives, and History of the Reporting System 

In  2014,  fee-paying  transport  services  between  private  individuals  through  platforms 

such  as  Uber,  Lyft  and  Bolt  (Taxify)  were  banned  in  France,  and  some  other  European 

countries  quickly  followed  the  precedent.  Uber,  perhaps  keen  to  create  at  least  one 

45 Ibid. 

46 Ibid. 

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success  story  in  Europe  and  demonstrate  that  Uber  could  partner  with  European 

governments  to  craft  a  positive  relationship,  worked  closely  with  the  Estonian 

government  to  develop  a  more  permissive  regulatory  framework.  The  Estonian 

government  had  been  cultivating  a  reputation  for  embracing  technology  and  being 

solution-oriented and forward-looking when it comes to technology. Thus, the two parties 

had a common interest to “promote the Government’s e-Estonia action plan [and] Uber’s 

innovative technology platform.”47 

Against  this  background,  on  9  October  2015,  the  Estonian  Tax  and  Customs  Board 

(ETCB)  and  Uber  announced  that  they  were  “setting  up  a  working  group  to  analyse 

collaboration  points  between  Uber’s  global  cash-free  service  and  the  ETCB’s  contactless 

reporting  scheme  in  order  to  offer  new  ways  of  paying  tax  liabilities  in  transport 

sector.”48  The  primary  objective  of  this  joint  effort  was  to  develop  an  income  data 

reporting  system  that  would  simplify  the  tax  declaration  process  for  Uber  drivers.  That 

objective is in line with the Estonian government’s priority to minimise bureaucracy and 

facilitate automatic tax reporting for businesses and entrepreneurs. The voluntary income 

reporting  system  has  been  operational  since  the  2017  tax  year.  It  is  not  limited  to  the 

ride sharing sector; all platform operators can use the system if they wish. 

4.2. 

Stakeholders  

Like  Denmark,  Estonia  has  actively  and  deliberately  involved  stakeholders  in  the 

development  of  the  income  reporting  system.  Right  from  the  start,  the  Estonian 

government has been keen to work together with platforms, for instance by setting up a 

joint  working  group  with  Uber  and  publishing  joint  press  statements  regarding  the 

progress made. It would appear that the ETCB is keen to build trust-based relationships 

with platform owners and to encourage voluntary trust-motivated compliance rather than 

mandatory fear-based compliance. Indeed, ETCB opted for a voluntary system based on 

the  belief  that  introducing  a  new  system  and  making  it  mandatory  would  result  in 

resistance and backlash.49 ETCB was keen to assess the tax morale of platform users and 

to  determine  whether  people  genuinely  want  to  pay  tax  and  are  simply  inhibited  by 

complex administrative processes.50 The Estonian tax administration system is motivated 

by a service ethos and this ethos greatly influenced the decision to present the system as 

a voluntary one before slowly transitioning to a mandatory system. 

47 Estonia Tax and Customs Board Press Release, issued on 9 October 2015: https://www.emta.ee/eng/etcb-and-

uber-collaborate-seeking-solutions-development-sharing-economy. 

48 Ibid. 

49 Interview with Evelyn Liivamägi, Head of the Tax Department at the Estonian Tax and Customs (Skype 

Interview, 27 September 2019). 

50 Ibid. 

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4.3. 

Design and Key Features of the Reporting System 

The  Estonian  reporting  system  is  a  voluntary  semi-automated  system.51  ETCB  has 

partnered  with  participating  platforms  to  create  an  inbuilt  feature  in  the  platform’s  user 

interface that allows the platform user to select the option to have their annual income, 

earned through the platform, reported directly to ETCB.  

For instance, in the Bolt ride hailing app, drivers can choose to push a button inside the 

app every January to automatically report their income earned through the app to the tax 

authority. The income will then appear on the driver’s pre-filled e-tax return in February. 

In the case of Airbnb, the platform sends out a communication to users every December, 

inquiring whether they wish to opt in to have their income for the previous year reported 

to the tax agency.52  

Figure 2. Design of the Estonian tax authority’s (ETCB) system for receiving automated 

income data from platforms, as it was piloted with Uber.53 

Ensuring that the system is straightforward, and the requirements are not onerous, was 

a  key  priority  for  ETCB.  Thus,  the  income  reporting  requirement  is  designed  to  involve 

just one reporting event a year, and the information that platforms are asked to report is 

kept at a minimum, i.e., ETCB only requires the personal identification code and income 

earned.  The  data  held  by  the  platform  is  encrypted  and  sent  to  ETCB  via  email.54  The 

51 Ibid. 

52 Ibid. 

53 Source: Loite, Märt (2016) e-stonian look at: collaborative economy. Presentation given at a meeting of the 

European Commission Ecommerce Expert Group on 13 October 2016. 
https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetailDoc&id=26192&no=8. 

54 Ibid. 

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email  is  manually  opened,  and  the  data  entered  in  bulk  to  ETCB’s  information  system. 

From there onwards the data flows into ETCB’s existing automated process for producing 

pre-filled  tax  returns.  Overall  the  process  is  thus  semi-automated.  An  illustration  of  the 

existing arrangement is set out in Figure 2. 

The introduction of a special business account and presumptive tax regime, which covers 

social and pension contributions, for natural persons who earn income through platforms 

has  further  lowered  the  tax  burden  for  these  taxpayers  and  enhanced  the  uptake  and 

effectiveness of the income reporting system.55 This system is described in greater detail 

in the Appendix. 

4.4. 

Challenges and Hurdles in Set-up and Implementation 

The  Estonian  government  faced  few  hurdles  in  the  implementation  of  the  system.  The 

country’s  government  services  were  already  highly  digitalized  and  digitally  integrated. 

For instance, the identification of platform users is not a challenge because  each citizen 

has  a  universal  identification  code  that  is  linked  to  all  their  government-held  data.  In 

addition, ETCB already had processes in place for receiving data from institutions for the 

purposes  of  pre-filling  tax  forms.  Perhaps  the  key  challenge  that  the  Estonian 

government  faces,  and  one  that  is  certainly  not  unique  to  Estonia,  is  securing  the 

involvement and participation of platforms that do not have a branch or office in Estonia. 

So  far,  there  has  been  no  up-take  by  international  web-based  labour  platforms.  This 

disparity means that income earned by  Estonians working through web-based platforms 

such as Upwork and Fiverr is still invisible to ETCB, unless the workers choose to report it 

themselves. 

4.5. 

Start-up and Running Costs 

The  Estonian  reporting  system  has  been  very  cost  effective.  The  development  cost  was 

low as the system connects to existing semi-automated processes at ETCB for receiving 

data  from  institutions  for  the  purposes  of  pre-filling  tax  forms.  In  addition,  because  the 

system  is  specifically  designed  not  to  be  burdensome  to  the  reporting  party,  the 

compliance  costs  for  the  platform  operators  is  kept  low,  although  they  did  have  to 

implement  changes  to  their  user  experience.  The  low  compliance  and  running  costs  are 

partly  a  consequence  of  the  fact  that  government  and institutional  databases  in  Estonia 

55 Note that this business account and presumptive tax regime applies only to natural persons earning up to 
€40,000 a year. Platform workers who provide regular services and earn income above the €40,000 
threshold are considered to earn business income and are expected to register with the Commercial Register 
as a sole proprietor or establish a private limited company. Sole proprietors are permitted to deduct 
business-related expenses from their business income, and are expected to pay income tax, social tax, and if 
they have joined the mandatory funded pension system, contribute to a mandatory funded pension scheme. 

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are  well  integrated  and  therefore  the  additional  data  required  from  platform  users  and 

owners is minimal. 

The system could be further automated by replacing email as the means of conveying the 

data  with  an  API  through  which  platforms  could  input  the  data  directly  into  the  tax 

authority’s information system, similar to Denmark. The Estonian system is not yet fully 

automated for two main reasons.56 Estonia is hopeful that an EU-wide reporting system is 

imminent,  and  the  government  has  been  watching  to  see  how  the  current  efforts  pan 

out.  Second,  ETCB  believes  that  such  a  fully  automated  system  would  be  more  cost-

intensive  than  a  partly  manual  solution,  because  it  would  require  additional  complex 

technology to implement and maintain. However, this could change if the uptake  of the 

system  increased  significantly  in  the  future  as  a  result  of  the  system  becoming 

mandatory. 

4.6. 

Evaluation 

Overall,  ETCB  views  the  outcomes  of  the  income  reporting  system  very  positively.57  In 

2016,  before  the  system  was  operational,  only  69  taxpayers  reported  income  earned 

from  Uber  and  Bolt  (Taxify),  representing  a  total  value  of  €67,800.  In  2017,  after  the 

reporting system became operational, the number of taxpayers reporting income through 

the Uber and Bolt (Taxify) platforms increased to 319, and the total amount declared was 

approximately €450,000, or almost seven times greater than in the previous year.58 That 

said, these numbers are still clearly quite small compared to the size of these platforms’ 

operations;  Bolt  alone  has  thousands  of  drivers  in  Estonia.  In  part  this  discrepancy  can 

be  explained  by  the  fact  that  many  drivers  who  earn  significant  income  through  the 

platform  declare  their  income  through  a  company  legal  entity  rather  than  as  individual 

taxpayers.  Bolt  suggests  that  as  many  as  three  quarters  of  the  drivers  in  Estonia,  even 

though  most  are  only  part-time  drivers,  declare  their  income  through  companies, 

presumably to be able to make tax deductions.59 This would leave only a quarter in the 

target  group  for  the  app-based  income  reporting  system.  Still,  even  considering  this, 

ETCB  has  concluded  that  based  on  their  analysis  of  the  numbers,  they  believe  that  the 

voluntary participation rate has reached its limit. 

To enhance compliance, ETCB now wants to move towards a mandatory fully automated 

reporting  system  by  2021.  A  mandatory  reporting  system  would  require  amendment  of 

56 Interview with Evelyn Liivamägi, (footnote 49). 

57 Ibid. 

58 https://www.emta.ee/eng/income-declared-through-uber-and-taxify-has-overwhelmingly-increased. 

59 Email discussion with Martin Villig, Co-founder, Bolt (Taxify) (17 September 2019). 

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the  legislation  in  Estonia  because  of  data  protection  and  privacy  rules.  ETCB  views  the 

idea  of  a  coordinated  EU-wide  reporting  system  positively  but  considers  that  it  would 

involve significant hurdles to get there, and that it seems likely that the second version 

of the Estonian system will be up and running before any EU one. 

5.  The Platform Income Reporting System in France 

5.1. 

Motivation, Objectives, and History of the Reporting System  

“In  France,  between  200  and  300  peer-to-peer  online  platforms  provide  services…The 

total  turnover  of  these  platforms  is  estimated  between  EUR  3  and  4  billion.”60  As  is  the 

case  in  most  countries,  the  existing  tax,  social  contribution,  and  regulatory  rules  were 

not  designed  with  the increasing  digitalisation of  the  economy  in  mind;  indeed  many  of 

the rules pose significant challenges for administrators who attempt to apply them to the 

new  situation.  The  motivation  behind  the  policy  approach  in  France  is  two-pronged:  (1) 

the desire to eliminate undesirable behaviour such as tax and social contribution evasion, 

which  distorts  competition  in  the  economy  and  starves  the  state  of  revenue  and  leaves 

workers vulnerable, while at the same time (2) not imposing outdated and unsuitable tax 

and regulatory rules which “would discourage many private individuals and would deal a 

heavy  blow  to  the  sharing  economy  and  its  ecosystem.”61  The  attitude  towards  digital 

platforms  and  platform  workers 

is  generally  positive,  with  the  current  “pro-

entrepreneurial government” keen to ensure legal clarity for stakeholders.62 

In 2017, “the Working Group of the Finance Committee of the French Senate on taxation 

of the digital economy, a non-partisan, collegial and informal subcommittee, presented a 

bill  to  establish  a  simple,  unified  and  fair  taxation  regime  for  the  collaborative 

economy.”63  The  French  government’s  priority  seems  to  be  to  create  a  special  legal 

status for individual platform workers and to permit platforms to adopt a charter setting 

out  their  social  obligations  to  platform  workers  without  risking  their  reclassification  as 

60 OECD (2019), The Sharing and Gig Economy: Effective Taxation of Platform Sellers: Forum on Tax 

Administration, OECD Publishing, Paris. https://doi.org/10.1787/574b61f8-en p. 18. 

61 Senate Information Report No. 481 (2016–2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 10. 

62 Baker McKenzie, Client Alert, August 2019, 

http://bakerxchange.com/rv/ff005030e3f1efdac3f359341441b3b3d1643808/p=9566725. 

63 Senate Information Report No. 481 (2016–2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 10. 

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employers.64  Notably,  the  bill  establishes  a  system  of  automatic  income  reporting  from 

platform workers to the French tax authorities, under certain conditions. The key features 

of the reporting system as described in the bill are as follows:  

 

“Make automatic income reporting the sine qua non condition to benefit from the 

EUR3,000 tax advantage.65 The system would then be voluntary, simple and 

reliable, and would work as an incentive.” 

 

“For users under micro-entrepreneur status, and with their agreement, allow the 

platforms to collect not only social contributions, but also the flat tax discharging 

the payment of income tax.”66 

The bill also contained specific proposals in respect to taxation of platform workers (see 

Box  1).  However,  these  proposals  were  dealt  a  significant  blow  by  the  French 

Constitutional Court in September 2018; the court blocked the provision on the basis that 

it was adopted using a procedure that was in breach of the French Constitution.67 A new 

draft law—the loi d’ orientation des mobilités—on the  special status of platform  workers 

was  reintroduced  by  the  government  in  2018  and  is  currently  working  its  way  through 

the  French  National  Assembly.68  The  intention  remains  to  create  a  special  category  for 

platform workers, an intermediary status between “employee” and “self-employed”.69 

64 Baker McKenzie, Client Alert, August 2019, 

http://bakerxchange.com/rv/ff005030e3f1efdac3f359341441b3b3d1643808/p=9566725. 

65 That is, a fixed tax allowance of €3000 on all income received by individuals via online platforms and 

automatically reported by the platforms. In effect, this exempts occasional income from moonlighting 
activities from taxation. 

66 Senate Information Report No. 481 (2016–2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 13-16. 

67 Ibid. 

68 Ibid. 

69 Senate Information Report No. 481 (2016–2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 22. 

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Box 1: Proposed Provisions on Status of Platform Workers70 

Proposals in the Draft bill “Loi pour la liberté de choix de son avenir professionnel” 

1. 

“Establish  a  fixed  tax  allowance  of  EUR  3,000  on  all  income  received  by 

individuals via online platforms and automatically reported by these platforms, so 

that  occasional  and  sideline  income  can  be  exempted  with  a  simple  rule.  For 

amounts above EUR 3,000 of gross income, the tax advantage would be regressive, 

and would become neutral when the income becomes significant.” 

2. 

“Establish a simple and unique criterion for distinguishing private individuals from 

professionals,  with  regard  to  social  contributions,  based  on  the  same  threshold  of 

EUR  3,000  of  gross  income.  If  their  income  from  online  platforms  is  below  this 

threshold, users would be presumed non-professional, and therefore not affiliated to 

the  social  security  regime  of  self-employed  workers,  and  not  subject  to  social 

contributions.” 

3. 

“Make automatic income reporting the sine qua non condition to benefit from the 

EUR 3,000 tax advantage. The system would then be voluntary, simple and reliable, 

and would work as an incentive.” 

4. 

“For  users  under  micro-entrepreneur  status,  and  with  their  agreement,  allow  the 

platforms to collect not only social contributions, but also the flat tax discharging 

the payment of income tax.” 

5. 

“Adapt the “obligation of user information” imposed on platforms to the diversity 

of  their  business  models.  When  very  frequent,  similar  micro-transactions  are 

performed  (click  adverts,  videos  according  to  the  number  of  views),  platforms 

should  be  exempted  from  the  obligation  to  provide  information  “each  time  a 

transaction is concluded” and should only be required to send a monthly report to 

their users.” 

6. 

“Strengthen tax audit  capacities  and  give  priority  to audits  of  platforms  and  users 

who do not opt for automatic income declaration.” 

5.2. 

Design and Key Features of the Reporting System 

The  French  income  reporting  system  is  designed  around  several  pillars,  outlined  below. 

The existing tax rules that are applicable to platform workers in France are complex, and 

a  detailed  discussion  on  those  rules  is  beyond  the  scope  of  this  report;  however,  a 

concise summary of the taxation of platform income is set out in the Appendix. 

70 Cited from Senate Information Report No. 481 (2016–2017) by MM. Éric Bocquet, Michel Bouvard, Michel 
Canevet, Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles 
Guené, Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on 
March 29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 13-16. 

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5.2.1. 

Sharing Information with Users 

French law requires platforms to inform their users about their tax and social contribution 

obligations.71 In complying with this provision, platforms: 

- 

“are required to provide, each time a transaction is concluded, fair, clear and 

transparent information about the tax and social contribution obligations of the 

persons who carry out commercial transactions through them”, and to 

- 

“communicate to their users, in January of each year, a document summarising 

the gross amount of all known transactions received through them in the previous 

year.”72 

5.2.2. 

Automatic Reporting under the Social Security Financing Act, 2017 

Article 18 of the Social Security Financing Act, 201773 creates three systems in relation to 

the  social  security  system:  automatic  affiliation,  automatic  reporting,  and  collection  of 

social contributions. The article provides that: 

-  All self-employed workers engaged in work via an online platform may voluntarily 

elect to automatically affiliate with the social security system and direct the 

platform to make the necessary reports on their behalf; 

- 

In respect of micro-entrepreneurs, online platforms shall automatically report “to 

the “Union de recouvrement des cotisations de sécurité sociale et d’allocations 

familiales” (URSSAF)” and deduct social contributions at source.  

5.2.3. 

Mandatory Reporting under the General Tax Code 

The  original  language  of  the  legislation  proposed  by  the  Senate  required  automatic 

income  reporting  by  platforms,  but  the  language  was  watered  down  by  the  National 

Assembly,  at  the  insistence  of  the  French  government,  and  reduced  the  obligation  from 

reporting  user’s  income  to  the  tax  agency  to  merely  informing  users  of  their 

responsibilities as set out in 5.2.1. However, vide a subsequent amendment under Article 

24  of  the  Amending  Finance  Act  for  2016,  platforms  must  automatically  report  the 

income earned on the platforms by online platform users to the tax authority. With effect 

from  2019,  online  platform  operators  are  required  to  submit  user  reports  to  the  French 

71 Article 87 of Finance Act No. 2015-1758 of December 29, 2015, codified in Article 242 bis of the General 

Tax Code. 

72 Article 242 bis of the General Tax Code. 

73 Article 18 of Act No. 2016-1827 of December 23, 2016, on Social Security Financing for 2017. 

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tax  authorities,  and  these  reports  ought  to  include  “data  on  the  users  as  provided  by 

article 242 bis of the EU VAT Directive 2006/112/EC that will enter into force in 2020.”74 

Box 2: Features of the Provision on Mandatory Reporting under the General Tax Code 

1.  The mandatory reporting provision binds all online platforms regardless of 

where they are established or situated. 

2.  The platforms are only bound by these obligations when their users reside in 

France or make sales or services in France pursuant to the VAT regulation. 

3.  The platforms are required to ascertain the French VAT taxable turnover in 

respect of their users’ transactions. 

5.3. 

Stakeholders  

While  one  of  the  motivations  of  the  French  reporting  system  is  to  promote  and  nurture 

innovation  and  to  support  more  straightforward  compliance  rules  for  platform  workers, 

France, like other European countries, has also struggled to reconcile innovation with old 

legislation  and  regulatory  tools.  UberPop  provides  a  good  example.  UberPop,  a  service 

offered by the transportation platform Uber, allowed private individuals to use their cars 

to  transport  other  private  individuals  for  profit.75  In  many  European  countries,  this 

service  caused  Uber  to  fall  afoul  of  the  law  governing  transport  provision  by  registered 

taxi operators and private hire drivers. The French response was to enact legislation, the 

Thévenoud  Act,76  whose  implementation  effectively  banned  UberPop  from  operating  in 

France. Similar events were witnessed in Denmark and Belgium.  

The  decision  to  ban  UberPop  was  partially  motivated  by  lobbying  and  backlash  from 

traditional  taxi  operators  who  viewed  Uber  as  a  threat  to  their livelihood  and  existence. 

In particular, the ease with which Uber drivers could evade taxes caused disquiet among 

traditional taxi drivers  who are heavily regulated and who have  conventionally been tax 

compliant.  Non-compliance  by  platform  drivers,  therefore,  raised  issues  around  fairness 

and  unfair  competition.  Thus,  while  platforms  and  platform  workers  are  critical 

stakeholders in the income-reporting debate, traditional actors in the industries in which 

the platforms are operating are also vital stakeholders whose input ought to be obtained. 

74 KPMG France, Report on Online Platforms: Major Extension of the French Reporting Obligation, August 9, 

2019, https://home.kpmg/content/dam/kpmg/us/pdf/2019/08/tnf-france-aug29-2019.pdf.  

75 Note that this is different from a cost-sharing service, where, inter alia, the fee received by the driver is not a 
profit and only covers the expenses of the trip such as fuel and toll charges. UberPop is also different from 
other services that Uber offers in some locations, where the drivers are not private individuals but licensed 
taxi drivers. 

76 Act No. 2014-1104 of 1 October 2014. 

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In  this  case,  it  appears  that  the  mandatory  platform  data  reporting  scheme  could 

assuage  some  of  traditional  taxi  operators’  unease  concerning  their  platform-based 

competition.  

The requirement regarding income reporting for purposes of social security contributions 

(see  Section  5.2.2  above)  was  adopted  “without  prior  consultation  with  the  actors 

concerned  or  a  detailed  impact  study”  and  has  therefore  raised  “several  technical  and 

legal  difficulties”.77  As  already  explained,  the  automatic  reporting  of  income  for  social 

security purposes is a voluntary system with no incentive; prior consultation is therefore 

particularly crucial for the success of such a voluntary system.  

5.4. 

Challenges and Hurdles in Set-up and Implementation 

We have identified a number of technical, legal, and administrative challenges in the 

efforts to set up the French system, detailed below. 

5.4.1. 

Sharing Information with Users 

Complying  with  the  requirements  of  the  system  to  share  information  with  users  is 

reasonably  straightforward  for  labour  platforms  such  as  Upwork  and  Uber,  as  well  as 

letting platforms such as Airbnb. But it is much less straightforward for platforms such as 

YouTube,  where  users  are  paid  per  “click”  or  per  “view”.78  Strictly  interpreted,  the 

platform may end up sending the user thousands of reports an hour if the user’s content 

attracts thousands of views in that period. The statutory provision also does not explicitly 

exempt  platforms  that  are  exempt  from  taxation—such  as  cost-sharing79  and  second-

hand sales platforms—from the obligation to send an annual summary of transactions to 

users.  It  is  arguable  that  such  a  statement  sends  a  confusing  signal to  users  and  could 

cause them to think that they  ought to pay tax on the gross income, while a wholesale 

exemption  from  compliance  with  the  provision  may  result  in  inadvertent  or  deliberate 

77 Senate Information Report No. 481 (2016-2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 55. 

78 Senate Information Report No. 481 (2016-2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 52. 

79 Cost-sharing in this context refers to “co-consumption” which is “the provision of a service which also 

benefits the private individual who offers it, and not only the persons with whom the costs are shared”: ibid 
p. 28. 

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breaches.80 Overall, compliance with the fairly detailed provisions of the French reporting 

system may create challenges for some platforms. 

5.4.2. 

Automatic Reporting under the Social Security Financing Act 

The  initial  challenges  arising  from  the  implementation  of  this  reporting  requirement  are 

centred on “the voluntary nature of the proposed mechanism, its operational complexity, 

and  …the  absence  of  a  financial incentive”.81  For  instance,  due  to  the  complexity  of  the 

underlying  social  security  system  and  its  incompatibility  with  the  innovative  nature  of 

platform  work,  it  is  difficult  for  platform  operators  to  ascertain  when  platform  workers 

have  crossed  the  threshold  for  affiliation  with  the  social  security  system,  that  is,  exited 

the  micro-social  system  threshold;  and  the  correct  rate  of  social  contributions  to  then 

apply.82  These  hurdles  have  severely  limited  the  automatic  collection  of  social  security 

contributions. 

5.4.3. 

Mandatory Reporting under the General Tax Code 

The  income  reporting  rules  for  tax  purposes  have  only  recently  come  into  force.  It  is 

perhaps too early to determine the challenges in this system’s daily operations. However, 

tax experts are already expressing some concerns regarding increased compliance costs 

for  platform  operators.  For  instance,  the  new  legislation  requires  platforms  to  report  to 

French tax authorities “the amount of taxable  turnover  related to its users’ transactions 

subject to French VAT.”83 This requirement incorporates platforms as active allies in the 

fight against tax fraud, but it poses a significant “administrative and technical burden in 

order  to  determine  the  territoriality  of  each  of  the  operations  carried  out  on  the 

platform”.84   

While  an  increase  in  compliance  costs  may  not  pose  a  significant  problem  for  large 

multinational platforms, these costs may stifle the growth of small start-ups in France. It 

is  also  entirely  possible  that  platform  operators  may  begin  to  pass  on  the  increased 

compliance costs to platform workers, thus reducing the amount of income these workers 

earn through platform work. 

80 Ibid. 

81 Senate Information Report No. 481 (2016-2017) by MM. Éric Bocquet, Michel Bouvard, Michel Canevet, 
Thierry Carcenac, Jacques Chiron, Philippe Dallier, Vincent Delahaye, André Gattolin, Charles Guené, 
Bernard Lalande and Albéric de Montgolfier, made on behalf of the Finance Committee, tabled on March 
29, 2017, available at http://www.senat.fr/rap/r16-481-2/r16-481-2.html, p. 56. 

82 Ibid. 

83 KPMG France, Report on Online Platforms: Major Extension of the French Reporting Obligation, August 9, 

2019, https://home.kpmg/content/dam/kpmg/us/pdf/2019/08/tnf-france-aug29-2019.pdf 2. 

84 Ibid. 

32 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

6.  Cross-case analysis and implications at the EU level 

The three case studies reveal significant differences, and some similarities, in the 

experiences of the three case countries in creating reporting systems for income earned 

through platforms. In this section we discuss the differences and similarities and identify 

lessons that are relevant for considering the potential for a multilateral Digital Single 

Window income reporting system in the EU. 

6.1. 

Summary of findings 

Table 2. Comparison of platform income data reporting systems across three case 

countries 

Dimensions 

Estonia 

Denmark 

France 

Motivation for 
creating 
reporting 
system 

  Facilitating 

  Facilitating 

  Reducing tax 

platform work 

platform work 

evasion 

  Simplifying tax and 

  Simplifying tax 

  Facilitating 

social contribution 

compliance 

entrepreneurship 

compliance 

  Not disadvantaging 

  Ensuring collection 

  Business friendly 

Danish platforms 

of social 

environment 

  Developing a 

contributions 

  Open government 

technologically 

sophisticated 

system that can be 

used by all 

member states and 

types of platforms 

Reporting 
system 
launched 

Automated v 
semi-
automated 

Mandatory v 
Voluntary 

2017 

2020 

Semi-automated 

Automated  

Voluntary   

Mandatory  

? 

? 

Voluntary for social 
contributions and 
mandatory for tax 
purposes 

Scope 

All platforms 

Letting platforms 

All platforms 

 Where the “?” symbol is used in this table, it denotes the fact that we do not have sufficient data to make an 

accurate statement. 

33 

 
 
                                                 
 
A Digital Single Window for Income Data from Platform Work 

Dimensions 

Estonia 

Denmark 

France 

Legislative 
limits on data 

Require legislative 
amendment for 
mandatory collection  

Mandatory collection 
permitted by law. No 
need for user consent. 

New legislation 
introduced for 
mandatory collection 

Data points 
collected 

  Universal personal 

 

Income year 

? 

identification code 

  Taxpayer identity 

 

Income amount 

  Letting location  

 

Income amount 

Stakeholders 

  Platform owners 

  Platform owners 

? 

  Platform users 

  Platform users 

Initial 
investment 

Low; semi-automated, 
integrated easily with 
existing systems 

Running cost  Low; but could 

increase if take-up 
among platforms 
increases, since it 
requires some manual 
labour 

40 million Danish 
kroner, comparable to 
other tax authority 
development projects 

Expected to be low, 
but depends on quality 
of data submitted by 
platforms 

? 

? 

Hurdles 

  Voluntary system 

  Legislation limited 

  Automatic 

reaching 

to letting platforms 

voluntary reporting 

saturation; need to 

  How to arrange 

for social 

move to mandatory 

social security for 

contributions not 

  Securing 

platform workers  

working as it 

participation of 

  Securing 

should: voluntary, 

international web-

participation of 

complex, no 

based labour 

international web-

financial incentive 

platforms without a 

based labour 

  Detailed provisions 

registered presence 

platforms without a 

create complexity 

in Estonia  

registered presence 

in compliance for 

in Denmark 

some platforms 

Benefits 

 

Increased tax and 

  Much increased tax 

 

Increased tax and 

social security 

and social security 

social security 

compliance, though 

compliance 

still far less than 

expected  

perfect 

  Reduced 

compliance 

expected 

  Reduced 

compliance cost for 

compliance cost for 

taxpayers expected 

taxpayers already 

  Positive 

willing to report 

relationships 

  Positive 

between tax 

34 

 
 
 
 
 
A Digital Single Window for Income Data from Platform Work 

Dimensions 

Estonia 

Denmark 

France 

relationships 

authority and 

between tax 

platforms 

authority and 

  Technological 

platforms 

foundation for 

automatic data 

reporting from a 

broader range of 

platforms in the 

future 

Tax regime(s) 
for platform 
workers 

  Ordinary tax 

  Higher deduction 

  Ordinary tax regime 

regime 

for users whose 

  Micro-tax system 

  Presumptive tax 

income data is sent 

regime 

to SKAT via API 

  Business income 

taxation 

Social 
Security 
System 

  Straightforward 

  Comprehensive 

  Comprehensive 

  Lean 

  Complex 

  Complex 

  Compatible with 

 

Incompatible with 

 

Incompatible with 

platform work (via 

platform work 

platform work 

presumptive 

regime) 

Findings  from  the  country  case  studies  are  summarised  in  Table  2.  Some  notable 

similarities  and  differences  are  apparent  between  the  cases.  First,  Estonia,  with  its  new 

and  advanced  administrative  systems,  has  been  able  to  move  much  faster  in 

implementing its data reporting system. The reporting system has been up and running 

since 2017, and ETCB has had ample opportunity to pick up weaknesses and improve on 

the  original  set-up.  Countries  with  older  and  more  complex  legacy  systems  like  France 

and Denmark are having to move more slowly. 

Second,  the  countries  differ  in  their  basic  design  choices.  Estonia  opted  for  a  semi-

automated voluntary system, Denmark went for an automated mandatory system, while 

France  appears  to  have  opted  for  a  hybrid  model.  Estonia’s  choices  were  influenced  by 

the  government’s  service-oriented  ethos  and  desire  to  build  relationships  of  trust  with 

taxpayers.  ETCB’s  expectation  was  that  if  the  system  was  simple  and  fair,  taxpayers 

would voluntarily elect to report their income. In the end, there has been some voluntary 

uptake but ETCB now  recognizes that they have to move towards a  mandatory system. 

ETCB  also  initially  opted  for  a  semi-automated  system  in  the  expectation  that  an  EU 

35 

 
 
 
A Digital Single Window for Income Data from Platform Work 

automated model would be implemented in due course. Estonia remains hopeful that this 

will  happen  but  is  preparing  to  implement  its  own  automated  system,  in  any  event,  by 

2021.  Denmark’s  options  were  motivated  by  the  tax-positive  attitude  in  the  country—

existing  legislation  requiring  and  allowing  mandatory  reporting  by  platforms  without 

users’  consent—and  the  desire  to  design  a  world-class  automated  system  whose 

technology could eventually benefit other EU member states. 

Third,  the  three  countries  have  all  found  that  web-based  labour  platforms  that  do  not 

have  a  registered  presence  in  the  country  pose  a  challenge  for  compliance.  It  may  well 

be possible to secure voluntary participation from many platforms, as the case of Airbnb 

in both Denmark and Estonia shows. However, in case a platform declines to comply, it is 

difficult to enforce the law in such circumstances. This is one area where it appears that 

EU member states would benefit from pooling their power and clout. 

Fourth,  and  important  for  this  research,  the  utilization  of  income  data  for  social  and 

pension  contribution  purposes  remains  a  significant  challenge.  While  the  successful 

reporting  of  the  data  would  solve  one  problem,  social  security  institutions  in  countries 

with  comprehensive,  complex,  and  traditional  social  security  systems  would  still  find  it 

difficult  to  utilize  this  data  to  determine  the  contributions  and  benefits  due  to  platform 

workers. Denmark’s laws and systems for income reporting for the platform economy are 

currently  limited  to  letting  platforms  for  this  reason,  while  France’s  voluntary  automatic 

income  reporting  system  for  social  security  purposes  has  not  been  successful. 

Assumptions  based  on  regular  employment  in  the  service  of  a  single  employer,  which 

underpin much of social security legislation, are incompatible with the reality of gig work 

as  it  is  practiced  today.  Estonia  has  managed  to  cut  through  the  complexity,  but  much 

work  may  be  needed  in  most  other  member  states  to  either  reform  social  security  or 

regulate platform  work  so that it conforms to  existing systems. Deeper consideration of 

this issue is beyond the scope of this paper, but we note that there is emerging work on 

“Digital Social Security”85 as well as ways of making social security more compatible with 

self-employment in general.86  

Fifth, in terms of outcomes, the Estonian case demonstrates that it is possible to improve 

compliance by using an income reporting system; however, it also demonstrates that the 

effectiveness of a voluntary system is limited, and a mandatory system as envisaged by 

Denmark  is  more  promising  in  the  long  run.  The  Danish  system  is  yet  to  be  publicly 

launched and it is too early to assess its impacts; however, since it is an improvement on 

85 Weber, Enzo (2019): Digital social security: Outline of a concept for the 21st century (Hans-Böckler-Stiftung. 

Working paper Forschungsförderung, 138), Düsseldorf, 
https://www.boeckler.de/pdf/p_fofoe_WP_138_2019.pdf. 

86 The Impact of the Digital Transformation on EU Labour Markets. Report of the High-level Expert Group, 

April 2019; https://ec.europa.eu/social/main.jsp?langId=en&catId=1226&furtherNews=yes&newsId=9344. 

36 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

Estonia’s  semi-automated  voluntary  system,  which  realised  a  modest  success,  it  is 

entirely  possible  that  it  will  generate  very  positive  results  in  the  near  future  for  both 

increasing compliance and lowering taxpayers’ compliance costs. The French law has just 

come into force and it is too early to assess its impacts in any further detail. 

Finally, it is worthwhile to consider the incentives created by a data reporting scheme. In 

Estonia, there is an apparent tendency for gig workers to incorporate. A mandatory data 

reporting scheme covering only unincorporated workers could provide a further incentive 

for  labour  to  incorporate,  which  could  be  an  undesirable  outcome  from  both  labour  and 

tax  law  perspectives.  In  France,  the  mandatory  data  reporting  scheme  for  platform 

workers  could  balance  the  incentives  between  platform  workers  and  traditional  self-

employed  people,  by  improving  the  formers’  tax  compliance.  However,  if  taken  too  far, 

automatic  reporting  of  data  on  platform  workers  but  not  on  traditional  self-employed 

workers  could  arguably  start  to  disadvantage  platform  workers  compared  to  traditional 

self-employed.  At  the  same  time,  the  Danish  case  suggests  that  self-employed  people 

can  benefit  from  the  reduced  compliance  cost  brought  about  by  automatic  reporting, 

providing an incentive to work via platforms rather than independently. The strength and 

direction  of  these  incentives  mostly  hinge  on  member  state  level  decisions  concerning 

what data is used and how. 

6.2. 

Implications at the EU level: Data Reporting Considerations 

First, and highly relevant for this study, are the significant limitations created by existing 

social  contribution  rules.  It  is  often  even  more  complicated  to  collect  income  data  for 

social contribution purposes than it is for tax purposes. Existing social contribution rules 

were not designed with the platform economy in mind and are not sufficiently flexible to 

dovetail  seamlessly  with  the  way  income  is  earned  and  reported  in  the  platform 

economy.  Even  in  Nordic  countries  like  Denmark,  with  generous  but  complex  social 

security  nets,  it  has  proven  hard  to  provide  adequate  social  protection  to  platform 

workers.  Thus,  assuming  that  member  states  were  able  to  agree  on  a  single  income 

reporting mechanism for tax purposes, much  work would be  required to determine how 

such  income  data  could  be  utilised  by  domestic  agencies  dealing  with  social  insurance 

and pension contributions. 

Second,  there  are  several  data  reporting  considerations  that  are  common  to  all  case 

countries, and that are likely to arise across the member states. While it is fairly easy to 

obtain data from platforms with a local registered presence, each case country appeared 

crippled  when  it  came  to  obtaining  data  from  international  web-based  platforms.  These 

web-based  platforms  typically  do  not  have  permanent  establishments  in  the  case 

countries,  and  without  a  local  presence  it  is  impossible  to  compel  them  to  comply  with 

domestic  legislation.  This  difficulty  is  exacerbated  in  instances  where  the  income 

reporting system is voluntary like Estonia. While Denmark has succeeded in introducing a 

37 

 
 
A Digital Single Window for Income Data from Platform Work 

pilot  mandatory  system,  it  has  also  limited  its  focus  to  local  gig  platforms,  perhaps 

realising  that  implementing  such  a  system  for  a  web-based  platform  would  yield  very 

little fruit. This is an issue where an EU-level approach could deliver better results than a 

national  approach.  Obtaining  compliance  from  web-based  platforms  operating  from 

outside  the  EU  could  still  present  a  challenge,  but  they  could  at  least  be  pursued 

collectively  with  pooled  resources.  One  solution  may  be  to  have  member  states  collect 

data from web-based platforms having a permanent establishment or registered office in 

their jurisdiction and share that data with other member states whose taxpayers use the 

platforms  but  do  not  have  such  a  permanent  establishment  or  registered  office.  This 

network  model  is  discussed  further  in  the  next  section.  However,  it  is  possible  that  this 

solution  may  require  an  amendment  to  existing  GDPR  rules  which  limit  the  data  that  a 

country  can  collect;  tax  agencies  may  face  challenges  in  justifying  the  need  to  collect 

data regarding users who are not tax resident in their countries. 

Second, since the income reporting systems currently in existence in the case countries 

are largely limited to local gig platforms, local tax agencies know the data that they need 

and can ask for what is relevant for their purposes. The nature and extent of such data 

varies from country to country. In Estonia, each citizen has a universal identification code 

and the only information that the tax agency requires is the code and the income earned. 

In Germany, for instance, where there is no universal identification code, the tax agency 

would  require  much  more  information.  Complications  arise  when  countries  try  to  share 

data  regarding  cross-jurisdictional  work;  the  tax  agencies  must  determine  where  the 

taxpayer is resident, where the property is located if the income is in respect to property, 

and  which  country  has  the  right  to  tax  under  international  tax  rules.  Thus,  additional 

information  would  be  required  for  the  multilateral  EU-wide  reporting  system  to  work; 

Member  States’  tax  agencies  would  have  to  agree  on  and  define  the  minimum  data 

required  for  the  taxation  of  platform  workers.  A  recent  initiative  by  Member  States  tax 

agencies  (FPG/097  initiated  under  TADEUS87)  has  identified  the  minimum  information 

that would be required as: 

 

Identification information: Who received the payment? 

  Transaction information: 

o  How much money they received? 

o  What supply of service or good generated the payment? 

87 TADEUS (2019) Tax ADministration European Union Summit (TADEUS) 2019 Outcomes Statement: 1st 

Plenary Meeting, Helsinki, Finland, 17-18 September. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/tadeus_2019_outcomes_statement_-
_1st_plenary_meeting_helsinki_finland.pdf 
Note that this initiative included only 18 Member States and the future inclusion of other Member States 
may significantly expand the list and nature of data listed here. 

38 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

  Platform information: What platform facilitated the transaction and therefore will 

have the reporting obligation? 

  Additional tax relevant data, for example if the income is from accommodation 

services. 

The nature and quality of data is only one consideration. The timing of the data reporting 

is  equally  important.  Tax  agencies  would  require  the  data  before  the  deadline  for 

taxpayers  to  remit  their  returns  so  that  the  tax  agencies  have  an  opportunity  to 

prepopulate  taxpayers’  tax  returns.  For  this  reason,  Denmark  is  unsure  about  the 

feasibility  of  a  network  model.  SKAT’s  primary  concern  is  that  it  would  require  income 

data by January 20th each year in order to prepopulate tax returns, and that there is no 

guarantee  that  tax  agencies  in  Member  States  with  manual  systems  would  be  in  a 

position to meet such strict timelines. Thus, since the timing and quality of data required 

in  each  country  is  different,  and  there  is  significant  disparity  in  technological 

advancements,  much  work  needs  to  be  done  to  ensure  that  the  data  shared  is  fit  for 

purpose. 

Data  protection  and  privacy  rules  also  come  into  play.  If  income  reporting  is  voluntary, 

these  rules  do  not  pose  much  of  a  challenge.  However,  as  the  Estonian  case 

demonstrates, voluntary compliance quickly reaches its saturation point and a mandatory 

system  is  required  to  keep  the  system  effective.  However,  data  protection  restrictions 

pose a hurdle for mandatory  reporting, and member states “may not  have the rights to 

collect  information  about  non-residents  from  the  platforms  resident  in  that  Member 

State.”88  For  instance,  in  the  case  of  Airbnb,  where  income  is  earned  through  offering 

accommodation,  the  taxing  rights  usually  belong  to  the  country  where  the  property  is 

located  even  if  the  property  owner  is  resident  in  a  different  member  state,89  and 

therefore  cross-jurisdictional  data  reporting  may  be  difficult.  A  mandatory  reporting 

system at the EU-wide level would require an EU directive in order to accommodate data 

reporting  within  the  existing  rules.  In  the  event  of  the  failure  to  secure  EU-wide 

consensus on such a directive, member states would have to take the initiative to amend 

their  legislation  unilaterally  to  allow  the  automatic  local  and  cross-border  reporting  of 

data without taxpayers’ express consent. 

6.3. 

Implications at the EU level: Driving Ethos and Principle-based 

Policy 

The driving ethos of each individual tax agency plays a significant role in the design of its 

income  reporting  system  and  it  may  be  that  the  driving  tax  ethos  varies  from  one 

88 Ibid. 

89 Although a double taxation treaty may allocate taxing rights differently. 

39 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

member state to another. Also, it appears that, to date, much of the tax policy governing 

the  platform  economy  has  been  reactive  rather  than  principle-based.  In  designing  a 

Digital  Single  Window,  some  member  states  may  be  more  interested  in  preventing  tax 

evasion  while  others  may  be  driven  by  the  ethos  of  service  and  simplicity  and  the  tax 

agency may be open to working together with platforms in order to design the reporting 

system. The differences in outcomes would be that one system is service driven, simple, 

transparent,  and  semi-automatic  while  the  other  is  mandatory  and  aimed  at  identifying 

and  punishing  evaders.  An  EU-wide  reporting  system  would  therefore  have  to  be 

principle-based  and  designed  based  on  a  shared  ethos.  If  the  member  states  lack  this 

shared  ethos,  it  would  be  difficult  to  secure  consensus  on  the  design  and  objectives  of 

the system. Member states would have to agree on the primary objective and motivation 

for the system: is the system primarily geared towards simplified compliance for platform 

owners and users, or towards maximising tax collection and social security contributions? 

A  system  with  platform  owners  and  users  at  the  core  is  likely  to  trade  off  accuracy  for 

simplicity and usability. On the other hand, a system driven by maximising tax collection 

is likely to sacrifice simplicity and usability for accuracy, detail, and effectiveness. 

6.4. 

Implications at the EU level: Eliciting compliance from international 

platforms 

The  third  key  consideration  that  arises  from  the  case  studies  is  the  significant  and 

additional  challenge  posed  by  the  fact  that  most  international  web-based  platforms  do 

not  have  permanent  establishments  in  the  member  states.  There  is  currently  disparity 

and  inequity  in  the  tax  outcomes  of  local  gig-based  platforms  and  international  web-

based platforms given the former are much more visible and easier to pin down for tax 

purposes.  An  EU-wide  directive  compelling  these  web-based  platforms  to  share  the 

necessary  data  may  solve  half  the  problem,  but  the  enforcement  challenge  remains. 

Which EU entity would be responsible for enforcing such a directive and how would they 

ensure  compliance?  Would  efforts  to  shut  down  such  platforms  until  they  comply  be  an 

option  or  would  that  simply  drive  the  platform  workers  underground?  One  option  would 

be to take the contractual route taken by Denmark and Airbnb. The Member States can 

designate  a  single  entity  to  enter  into  a  data  reporting  agreement  with  each  of  these 

web-based platforms, and the entity would then distribute this data to the respective tax 

agencies. 

6.5. 

Implications at the EU-level: Medium-term vs. Long-term Goal 

Setting 

The  Estonian  tax  agency  made  the  choice  to  begin  with  a  semi-automated  voluntary 

reporting system and viewed it as a prototype of sorts. Their intention is—once they have 

identified  any  flaws  and  perfected  the  semi-automatic  voluntary  reporting  system—to 

40 

 
 
A Digital Single Window for Income Data from Platform Work 

transition  towards  an  automatic  mandatory  system  reporting  system.  Perhaps  a  similar 

modest approach would be more suitable for the member states. A mandatory reporting 

system  could  be  the  long-term  goal,  but  in  the  medium-term,  the  system  can  be 

designed as a semi-automatic voluntary one.  

7.  Alternative models for an EU Digital Single Window 

In this section we outline the policy options and designs for a Digital Single Window that 

would be feasible within the limitations of the existing legal and policy framework in the 

EU,  to  set  the  foundation  for  further  work  on  this  topic.  Towards  this  end,  we  consider 

two data reporting models that arise from the case studies and from previous literature: 

a network model and a hub-and-spoke model.  

7.1. 

The Network Model 

A  Digital  Single  Window  following  the  network  model  would  work  somewhat  similarly  to 

two  existing  tax  data  cooperation  schemes  within  the  EU:  (1)  the  VAT  Mini  One  Stop 

Shop (MOSS) scheme, and (2) the mandatory automatic exchange of information (AEOI) 

scheme.  In  the  following  we  briefly  describe  these  models  and  what  strengths  and 

limitations such network models would have if applied to platform income data reporting.  

Figure 3. Data flows in the network model of DSW 

The VAT Mini One Stop Shop (MOSS) scheme is an optional scheme that allows firms that 

make  digital  supplies  to  account  for  VAT—typically  due in  multiple  EU  countries—in  just 

41 

 
 
 
A Digital Single Window for Income Data from Platform Work 

one  EU  country.  Thereafter,  in  order  to  facilitate  the  administration  of  VAT  under  this 

system, tax agencies in the Member States automatically exchange data with each other 

via  bilateral  ties  that  form  a  network.  The  MOSS  scheme  came  into  force  in  January 

2015. 

Similarly, the mandatory automatic exchange of information (AEOI) scheme is a system 

for  member  states  to  automatically  exchange  information  on  income  from  employment, 

director’s  fees,  life  insurance  products,  pensions,  and  ownership  of  and  income  from 

immovable  property.90  In  the  scheme,  tax  authorities  send  information  that  they  are 

holding  concerning  tax  residents  of  other  member  states  to  those  states’  competent 

authorities.  The  information  sent  is  limited  to  predefined  tax  data,  using  predefined 

formats  and  at  predetermined  times.  Information  is  sent  via  bilateral  ties  without  prior 

request from the other country. Mandatory AEOI has been taking place between member 

states since mid-2015. 

In  the  case  of  platform  income  data  reporting,  the  tax  agencies  in  the  member  states 

would collect data from the platforms registered in their jurisdiction and report the data 

regarding  tax  residents  of  other  member  states  to  the  tax  agencies  in  those  member 

states.  As  with  the  MOSS  and  AEOI  models,  the  data  flows  would  happen  via  bilateral 

ties,  forming  a  decentralized  network  (Figure  3).  In  practical  terms,  the  data  could  be 

shared  manually  via  encrypted  email  or  automatically  via  dedicated  IT  systems  such  as 

those used in the AEOI scheme. Such a network model of platform income data sharing 

has  previously  been  described  and  analysed  by  the  FPG/097  Project  Group  Initiated 

Under TADEUS – Tax Administration European Union Summit. 91 In the group’s view, this 

model saves the member states from the task of identifying a single entity to collect data 

from all the platforms.92 According to the Project Group, if the member states collect the 

data  from  the  platforms  themselves,  they  should  have  the  knowledge  regarding  the 

platforms  registered  in  their  jurisdiction,  and  they  can  therefore  control,  advise,  and 

provide  technical  solutions  to  the  platforms  better  than  a  single  entity  could.93  The 

Project  Group  favours  the  data  reporting  through  the  network  to  be  undertaken  via  a 

90 Report from the Commission to the European Parliament and the Council on overview and assessment of the 
statistics and information on the automatic exchanges in the field of direct taxation. COM(2018) 844 final. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/report-automatic-exchanges-taxation-dac-
844_en.pdf 

91 TADEUS (2019) Tax ADministration European Union Summit (TADEUS) 2019 Outcomes Statement: 1st 

Plenary Meeting, Helsinki, Finland, 17-18 September. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/tadeus_2019_outcomes_statement_-
_1st_plenary_meeting_helsinki_finland.pdf 

92 Interview with Evelyne Liimagi (footnote 41). 

93 Ibid. 

42 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

dedicated  technological  solution  rather  than  via  email  because  the  later  would  take  too 

long and would involve significant manual work.94  

However,  in  our  view,  the  similarity  between  income  data  reporting  and  the  VAT  MOSS 

scheme is somewhat superficial, because VAT is a harmonised  EU tax, whereas there is 

substantial  diversity  in  the  income  tax  and  social  security  systems  of  member  states 

since  they  remain  under  the  jurisdiction  and  control  of  each  national  government.95  In 

the MOSS system, the underlying tax regime is harmonised, i.e., the tax systems in each 

country  are speaking the same language to  each other.  In the case of income taxation, 

there is no harmonisation; the tax systems are speaking different languages in terms of, 

for instance, the data points and data formats that they require. Some countries require 

very  minimal  data,  such  as  a  taxpayer  identification  number  and  the  income  amount. 

Other countries require much more detailed information, such as registered address and 

date  of  birth  for  identifying  the  taxpayer.  This  results  in  a  “Tower  of  Babel”  problem  of 

each tax agency speaking its own language. 

The  AEOI  system  addresses  the  “Tower  of  Babel”  problem  by  having  a  standardized 

schema  for  the  shared  information.96  When  the  schema  was  drafted,  the  Commission 

gathered information from member states on what data points they would need in order 

to  tax.  Similarly,  the  FPG/097  Project  Group  dedicated  significant  efforts  to  defining  a 

shared  minimum  set  of  required  data  points  for  platform  income  taxation,  which  the 

agencies  would  collect  and  share  with  others  in  the  network.  However,  there  could  be 

legal limitations to tax agencies collecting data points that they do not themselves need 

but intend  to  potentially  transmit  to  third  parties.  For  instance,  General  Data  Protection 

Regulation  (GDPR)  rules  restrict  the  collection  of  data  that  an  entity  does  not  need 

(although the regulation contains exemptions possibly applicable here). 

The AEOI scheme avoids such legal limitations because it pertains to sharing information 

that tax authorities already hold about taxpayers, rather than the collection of additional 

data. Its schema is comprehensive, but tax authorities often do not possess all the data 

points the schema prescribes, and are required to only share those data points that they 

already hold. Thus the success of the system depends on the quantity and quality of the 

data that the tax authorities hold. In the case of platform workers, the whole issue is that 

tax authorities currently hold little data on them.  

94 Ibid. 

95 Further, the administration of the two taxes is significantly different because income tax is based on residence 

while VAT is based on transactions. 

96 Report from the Commission to the European Parliament and the Council on overview and assessment of the 
statistics and information on the automatic exchanges in the field of direct taxation. COM(2018) 844 final. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/report-automatic-exchanges-taxation-dac-
844_en.pdf 

43 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

A  further  difficulty  of  the  network  model  is  that  reporting  periods  and  deadlines  differ 

significantly  between  countries.  Smaller  countries  and  those  with  fully  digitalized  and 

integrated  government  systems  can  operate  with  very  short  turnaround  times,  as 

demonstrated  by  Estonia  collecting  data  from  platforms  in  January  and  funnelling  it  to 

pre-filled  income  tax  returns  by  February.  In  the  network  model,  full  tax  information 

would only be available once the slowest node in the network has managed to share its 

data.  

Another drawback of the network model is that the tax authorities would still struggle to 

get  platforms  to  comply  with  data  reporting  rules  if  those  platforms  do  not  have 

permanent  establishments  or  a  registered  presence  in  an  EU  member  state.  Both  the 

MOSS and AEOI schemes are primarily concerned with enabling the sharing of data that 

authorities  are  already  receiving,  whereas  the  problem  that  platform  income  data 

reporting schemes are aiming to address is how to obtain data from platforms in the first 

place. 

7.2. 

The Hub and Spoke Model 

An alternative model used in other instances of multilateral collaboration is the “hub and 

spoke”,  so  termed  because  its  topology  resembles  a  cartwheel.  In  this  set-up,  member 

states would nominate a central agency (the “hub”) to receive income data from all the 

platforms  with  users  in  the  member  states  and  forward  it  to  national  tax  and  social 

security agencies (the “spokes”), in whatever form they require (Figure 4). Such a model 

is currently unprecedented in the EU.97 

97 Although the AEOI scheme does include one similar dimension: certain classes of information (advance cross-
border tax rulings and advance pricing arrangements) are not exchanged on a bilateral basis, but instead the 
relevant information is uploaded in a Central Directory managed by the Commission. See Report from the 
Commission to the European Parliament and the Council on overview and assessment of the statistics and 
information on the automatic exchanges in the field of direct taxation. COM(2018) 844 final. 
https://ec.europa.eu/taxation_customs/sites/taxation/files/report-automatic-exchanges-taxation-dac-
844_en.pdf 

44 

 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

Figure 4. Hub-and-spoke model of cross-EU platform income data reporting 

The main strength of the hub-and-spoke model would be that it would address both the 

issue of sharing data with member states as well as obtaining data from platforms in the 

first place. In particular, international web-based platforms based outside the EU, which 

are currently identified as a problematic area in terms of ensuring compliance with data 

reporting,  could  potentially  be  reached  better  in  the  hub  and  spoke  model,  because  the 

central  hub  would  speak  to  them  with  the  pooled  authority  and  clout  of  the  national 

agencies,  as  opposed  to  each  agency  attempting  to  negotiate  with  the  platforms 

individually. 

The hub and spoke model would help overcome the Tower  of  Babel problem as follows. 

The  member  states  would  be  able  to  specify  the  data  points  they  need,  and  the  hub 

would  share  the  data  with  each  member  state  in  their  desired  form.  The  know-how 

regarding differences between member states’ data requirements and preferences would 

be  concentrated  in  one  organization,  as  opposed  to  each  member  state’s  tax  agency 

having to learn how to report the correct data to every other tax agency. The number of 

reporting  channels  required  in  the  network  model  is  28  (one  for  each  member  state), 

compared with the 756 required in the network model.98  

In  technical  terms,  the  hub  could  establish  an  API  similar  to  the  Danish  model  for 

receiving data from platform operators. The development and maintenance cost could be 

split  across  tax  agencies  as  opposed  to  each  having  to  develop  and  maintain  their  own 

98 The number of possible connections in a directional network of n nodes is n(n–1). In a network of 28 Member 
State tax agencies, there are thus 28*(28–1)=756 possible reporting channels (one agency reporting to 
another agency) between the agencies. 

45 

 
 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

system. The data would be stored temporarily by the hub. For forwarding the data to the 

member  state  tax  agencies,  the  hub  could  create  a  second  API  that  tax  agencies  could 

query to automatically obtain data in one of a number of pre-defined formats. In parallel 

to  the  API,  the  hub  could  also  provide  more  traditional  means  of  passing  data  to  tax 

agencies,  such  as  a  web-based  data  download  portal  or  even  paper-based  reports,  for 

those tax agencies that are not yet ready to move to automated digital operations. This 

would  allow  member  states’  tax  agencies  to  develop  their  operations  according  to  their 

individual  needs  and  resources,  which  vary  from  country  to  country.  Besides  tax 

agencies, the hub could also serve other legal recipients of income data in each country, 

such as social security providers; alternatively, these recipients could access the data via 

the local tax agency. 

The hub and spoke model also presents various challenges. The chief among them is that 

it requires a central organization that is efficient, effective, well-funded and perceived as 

legitimate  by  the  member  states.  Another  challenge  is  the  legal  basis  of  the  data 

collection.  Would  national  tax  authorities  be  able  to  legally  delegate  their  powers  to  a 

hub, or could some other legal basis be found or legislated for on the EU level? As with 

the  network  model,  GDPR  rules  must  be  taken  into  account.  Substantive  concerns  over 

data  protection  and  cybersecurity  are  also  worth  considering.  In  the  hub-and-spoke 

model,  taxpayers’  data  is  being  shared  along  a  smaller  number  of  reporting  pathways 

than  in  the  network  model,  which  could  reduce  security  risks.  But  at  the  same  time,  in 

the hub model the data is being temporarily stored in a more centralized fashion, which 

could present the risk of larger data leaks. Finally, while a hub and spoke model would be 

simpler  than  creating  28  different  systems  in  the  member  states,  it  still  introduces  an 

additional level of bureaucracy and organizational complexity. 

In terms of tax agencies’ relationships with platforms, Denmark and Estonia have  found 

that  developing  and  operating  their  own  reporting  systems  allowed  them  to  foster 

positive  relationships,  especially  with  local  platform  companies.  In  the  hub  and  spoke 

model, the tax agencies would not be  collecting data directly from their local platforms, 

so  they  would  miss  this  opportunity.  However,  since  the  actual  tax  and  social  security 

rules applicable to platforms and platform workers would be national, the local agencies 

would still be responsible for educating the platforms and taxpayers, collecting dues, and 

monitoring  compliance,  so  they  would  come  into  frequent  contact  with  local  platform 

companies.  

8.  Conclusions and Recommendations 

Based on the case studies, we take the view that there are several benefits of developing 

an EU-wide income reporting system. First, collecting income data from foreign platforms 

without a registered presence  or permanent  establishment in the country is a  challenge 

for  all  three  case  countries,  and  is  likely  to  be  a  significant  hurdle  for  all  the  member 

46 

 
 
A Digital Single Window for Income Data from Platform Work 

states.  With  a  Digital  Single  Window,  member  states  can  pool  their  power  and  clout  to 

exert pressure on foreign platforms to comply with an EU-wide requirement. 

Second, developing a sophisticated automated API-based reporting solution that presents 

low  compliance  and  maintenance  costs  is  an  expensive  venture.  While  the  cost  and 

technology  may  be  within  the  reach  of  higher  income-earning  member  states  like 

Denmark, it may not be easily affordable or accessible for some other member states. A 

Digital  Single  Window  would  allow  member  states  to  pool  their  financial  and  technical 

resources for a more cost-effective system. 

Third,  it  is  evident  that  the  case  countries  are  already  at  advanced  stages  of  designing 

different  income  reporting  systems  and  it  is  likely  that  other  member  states  will  begin 

similar  initiatives.  While  this  approach  may  not  pose  a  challenge  for  platforms  that 

operate  only domestically, a Digital Single Window would benefit platforms that operate 

cross-jurisdictionally  by  saving  them  from  having  to  use  and  comply  with  28  different 

reporting  systems.  Further,  a  lower  compliance  cost  could  encourage  growth  of  smaller 

domestic platforms and nudge them towards expanding to other member states without 

experiencing  higher  compliance  costs.  This  growth  and  expansion  would  benefit  the 

economy in the region. 

However,  significant challenges remain. First, it appears that while income reporting for 

tax  purposes  is  feasible  with  careful  thought  and  design,  income  reporting  for  social 

contribution  purposes  presents  unique  challenges,  not  least  because  of  the  complex 

social  contribution  rules  in  the  member  states.  Some  member  states  have  social 

contribution  rules  that  are  designed  in  accordance  with  assumptions  about  regular 

employment  that  are  incompatible  with  the  reality  of  gig  work  as  it  exists  today  in  EU 

labour markets. A second significant challenge concerns data privacy. If taxpayers’ data 

are being shared more  widely or stored more centrally, there is a risk of more frequent 

or more serious data breaches. Third, while an EU-wide reporting system would be much 

simpler  than  28  different  systems  across  the  member  states,  it  still  introduces  an 

additional level  of  bureaucracy  because  it  would  not  replace  the  information  systems  of 

national tax and social security agencies. 

On the basis of these conclusions, we recommend that member  states start considering 

what  it  would  take  to  conduct  a  pilot  of  a  Digital  Single  Window  for  income  data  from 

platform  work,  based  on  the  hub-and-spoke  model  as  described  above.  Some  data 

sharing  resembling  the  network  model  is  likely  to  develop  spontaneously  between 

competent authorities under the auspices of existing data sharing arrangements such as 

the AOEI scheme. The FP/097 Working Group’s efforts to develop standard data schema 

will help drive this forward. But the hub-and-spoke style Digital Single Window would in 

addition allow the pooling of resources and clout, and could simplify compliance, making 

it  worthwhile  to  dedicate  attention  to  this  model  as  well.  As  a  first  step,  we  propose  a 

47 

 
 
A Digital Single Window for Income Data from Platform Work 

mutual  learning  exercise,  in  which  advanced  member  states  such  as  Estonia  and 

Denmark  –  with  the  support  of  the  Commission  –  explain  and  discuss  with  interested 

member states their system for platform income data reporting. 

A  possible  later  pilot  of  a  hub-and-spoke  style  Digital  Single  Window  should  involve  a 

small subset of member states, selected on the basis of a pre-defined and pre-agreed set 

of  data  points  required  for  the  pilot  to  take  off.  The  pilot  could  be  made  easier  by 

selecting  countries  whose  tax  agencies  have  relatively  similar  information  systems.  The 

pilot  project  would  take  place  on  a  purely  voluntary  basis,  i.e.,  voluntary  participation 

and consent of platforms and taxpayers, as in the current Estonian model. This way the 

legal basis of the data collection and GDPR rules would present the minimum number of 

hurdles  for  piloting  the  technical  and  administrative  aspects  of  a  DSW  system.  In  this 

pilot, the role of the hub could be played by the tax agency of one of the member states; 

for  instance,  the  Danish  Ministry  of  Taxation  has  strong  technical  development  capacity 

as well as interest in promoting the platform income reporting agenda on a transnational 

level.  The  Commission could  help  establish  the  pilot  by  convening  parties  and  providing 

funding. 

If  and  when  the  technical  and  administrative  aspects  of  the  Digital  Single  Window  have 

reached  sufficient  maturity  through  piloting,  there  would  likely  be  a  need  to  look  into 

creating  a legal  basis  that  would  allow  the  system  to  be  made  mandatory  for  platforms 

and taxpayers, whilst allowing member states’ tax and social security agencies to choose 

whether  they  wish  to  opt  in  to  the  system.  Since  income  taxation  is  not  an  EU 

competence,  the  mandatory  legal  basis  would  likely  be  created  at  the  member  state 

level, just as Denmark and France have already done, and Estonia is considering doing. 

Data sharing from the hub to the spokes would likely be covered under the existing legal 

basis  for  tax  data  sharing  between  member  states,  as  long  as  the  role  of  the  hub  was 

played by a member state. Alternatively, the role of the hub could conceivably be moved 

to  a  suitable  EU-level  agency  in  a  technology  transfer  project.  For  instance,  the  newly 

established  European  Labour  Authority  is  tasked  with  “provid[ing]  national  authorities 

with operational and technical support to exchange information…”.99 However, this would 

likely  require  the  creation  of  a  new  legal  basis  in  EU  law  for  such  a  system,  a  more 

distant prospect.  

99 https://ec.europa.eu/social/main.jsp?catId=1414&langId=en. 

48 

 
 
 
 
 
 
                                                 
A Digital Single Window for Income Data from Platform Work 

9.  Appendix 

9.1. 

Taxation of Platform Workers in France 

Presently, there are no special rules in France that govern the taxation of income earned 

through  platform  work;  the  ordinary  tax  rules  apply.  Thus,  income  earned  through 

platform  work  is  treated  in  the  same  manner  as  “profits  and  capital  gains  from  self-

employed  workers  which  generally  fall  in  the  category  of  industrial  and  commercial 

profits (Bénéfices Industriels et Commerciaux  – BIC), non-commercial profits (Bénéfices 

Non-Commerciaux  –  BNC)  or  real  estate  income,  whether  or  not  they  derive  from 

professional activities within the meaning of the Social Security Code…”.100 Income falling 

under  these  categories  may  be  taxed  under  the  ordinary  tax  rules,  or—if  their  income 

falls below a certain threshold, and they are eligible for the “micro-tax system”—under a 

simplified tax regime known as the “micro-entrepreneur system”. 

Box 3: Features of the Micro-Tax System in France101 

Taxpayers who are eligible for the micro-tax system may: 

1.  Report their gross income in a simplified form. 

2.  “…benefit from a proportional tax-free allowance on their gross income, 

which  takes  into  account,  in  a  simplified  way,  expenses  incurred  from 

the activity.” 

3.  If they opt for the simplified (micro-entrepreneur) tax system, they pay a 

“flat tax in discharge of income tax instead of progressive scale taxation 

after application of a tax allowance.” 

4.  If  they  opt  for  the  ordinary  tax  rules,  the  tax  authority  applies  the 

proportional tax-free allowance and thereafter calculates how much tax 

is due. 

9.2. 

Taxation of Drivers Providing Passenger Transport Services through 

Ride-sharing Platforms in Estonia 

Drivers  providing  services  through  ride  sharing  platforms  have  three  taxation  options 

described in Box 4: 

100 Ibid 22. There are some notable exceptions to this: income derived from online platforms for cost-sharing and 

second-hand sales is subject to different provisions. 

101 Ibid 23-24. 

49 

 
 
  
                                                 
A Digital Single Window for Income Data from Platform Work 

Box 4: Taxation of Drivers Providing Services through Platforms in Estonia102 

  OPTION  1:  Platform  drivers  who  offer  occasional  driving  services,  can  choose  to 

report their income from such services as “other income” on their annual income tax 

return,  and  be  taxed  according  to  the  ordinary  tax  rules.  The  user  would  not  be 

allowed to deduct any expenses, including but not limited to, platform service fees, 

car repair charges and fuel. 

  OPTION  2:  Alternatively,  platform  drivers  who  earn  up  to  €40,000  a  year  can 

choose  to  have  their  income  tax  through  a  presumptive  tax  regime.  Under  this 

regime, platform users pay 20% on gross income for amounts up to €25,000 per year 

and 40% on gross income for amounts exceeding €25,000 per year. These taxpayers 

open  a  special  business  account  and  the  tax  is  paid  via  this  account;  the  bank 

automatically reserves a fixed percentage of the income to cover taxes and transfers 

it to the tax agency. This tax covers social tax and contributions to mandatory funded 

pension; in addition, the platform user is not expected to keep books of accounts or 

deduct expenses, keeping the compliance requirements simple. 

  OPTION  3:  Platform  drivers  providing  regular  services  should  register  as  sole 

proprietors or private limited companies. Their income would be taxed as ordinary 

business income, subject to relevant deductions. They would also be liable for VAT, 

labour 

taxes,  social 

tax,  unemployment 

insurance,  and  mandatory  pension 

deductions. 

Note that, eligibility for the simplified tax regime is not limited to platform workers. It is 

designed  for  individuals  who  earn  income  only  through  the  special  business  account  to 

ensure  that  as  long  as  the  minimum  social  contribution  is  made,  one  also  has  social 

security that is equal to workers with regular labour contracts. 

102 https://www.emta.ee/eng/taxation-income-drivers-providing-passenger-transport-service-through-ride-

sharing-service-platform. 

50 

 
 
 
 
 
 
 
 
 
                                                 
 
 
 
A Digital Single Window for Income Data from Platform Work 

51 

 
 
 
 
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