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Regulation and the sharing economy ERIK DE RIDDER LEGAL ADVISOR CENTER FOR SUTAINABLE ECONOMIES AND LAW BRUSSELS – EUROPE CDER.BE

Peer 2 peer regulation

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The sharing or peer 2 peer economy: need for (more) regulation? Erik De Ridder Independent Tax and Legal Advisor Center for Sustainable Economies and Law EU - Brussels Cder.be

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Page 1: Peer 2 peer regulation

Regulation and the sharing economy

ERIK DE RIDDER

LEGAL ADVISOR

CENTER FOR SUTAINABLE ECONOMIES AND LAW

BRUSSELS – EUROPE

CDER.BE

Page 2: Peer 2 peer regulation

Context

In the EU and in Belgium, we start to see more & more peer 2 peer interactions between individuals, organisations and companies.

‘Sharing’ Interactions are happening in a legal shadow area and are entering the radar of EU, national, regional and local authoritities.

E.G: P2P taxi services: Uber.com P2P hotel services: Airbnb.com

…But also the following ‘interactions’:

Page 3: Peer 2 peer regulation

Sharing activities

Barter (Iedereen.ruilt.mee.be, eggsandrabbitholes.com ) Gifting (Paynut.org) Buying groups (Samensterker.be) Peer 2 peer car sharing (Autopia.be, Tapazz.com) Coöperatives in energy, finance, insurance (Ecopower, New. B) Complementairy currencies (Ecoiris.be) Community supported agriculture (Velt.be) Crowdsourcing (99designs.com) Crowdfunding (Crofun.be, Growfunding.be) Timebanks (Tijdbank.cc)

Page 4: Peer 2 peer regulation

Sharing activities

Open source (Farmhack.org) Fair trade (Oxfam) Co-housing (Samenhuizen.be) Co-working; (Factory 40, Betacowork.com,

transformabxl.be/ ) Consensus decision making (Loomio.com) Local Exchange Trade Systems (LetsVlaanderen.be) Copyleft (Creative Commons License, Peer Production

License) Intentional Communities: (Transition networks)

Page 5: Peer 2 peer regulation

Stakeholders

Governments are not fully prepared to deal with these issues (cfr. conviction of Uber by the Brussels trade court)

Cities and Governments argue against these platforms: Dishonest competition: no license, no compliance with

city regulations! Safety issues! Quality issues! Consumer protection issues! Insurance and risk issues! Social and tax law Issues! Tax fraud! Cartels!

Page 6: Peer 2 peer regulation

Stakeholders Sharing economy private companies like Uber might argue :

We provide C2C/B2B technology intermediary service, not transport services.

We DO: Broker Services cfr. Google, Ebay Geolocalisation Services cfr. Google Maps Payment Services cfr. Goldman Sachs, Paypal

We DO NOT: Employ people ( we have no authority over drivers thus

do not employ them) Render transport Services

Innovative, Efficient, Effective! Consumer interest: lower prices! EU Free Competion of Services Directive! Cartels!

Page 7: Peer 2 peer regulation

Stakeholders Sharing economy non profit entities like Taxistop,

LetsVlaanderen, Eco-Iris etc. might argue: We promote and facilitate sharing activities between

citizens:

This is a not for profit activity – covering only expenses

This is volunteering! This is social and ecological! This is helping neighbours! This is building up lively neighbourhoods! This is not subject to:

Insurance Tax and social security contributions

Page 8: Peer 2 peer regulation

Stakeholders

And the citizen??? Suppose you are an individual ‘interacting’ or ‘sharing’

goods, skills or knowledge with other individuals , what then is your legal position?

Page 9: Peer 2 peer regulation

Taxation

Under the Belgian volunteering law you can earn exempt of tax and social security contributions:

An income of max 1.308,38 EUR per year and 32,71 per day

Car/ bike Travel expenses of max 0,3461/0,22 EUR per km per day – max 300 EUR per year.

This can be combined with unemployment income under certain formal conditions

Page 10: Peer 2 peer regulation

Taxation

Under the Belgian income tax code you can earn an occasional Income (i.e. not a regular, professional activity)

But this has to be reported in your income tax return! Taxed as diverse income at a fixed rate of 33% Combinable with unemployment income If turnover <15.000 EUR without VAT

Page 11: Peer 2 peer regulation

Taxation

Under the Belgian income tax code you earn taxable professional income:

When you regularly perform professional for profit activities subject to:

Income tax (Personal, Corporate or Non Profit) Social security contributions VAT

if turnover > 15.000 EUR per year You should register with VAT authorities

Page 12: Peer 2 peer regulation

Taxation

You are advised to register either:

as independent (eenmanszaak) as company (VOF, Comm. V, BVBA, NV, CVBA) as not for profit entity ( VZW, Stichting).

Page 13: Peer 2 peer regulation

Conclusion

Now what should Public sector, companies, not for profit organisations and citizens do?

Collaborate to enhance creation of the best possible platforms, networks or utilities for the distribution of: Transport Energy Food Currency Data Public Policy Law and security

For the benefit of all citizens/contributors/users/stakeholders (cfr. people, planet, profit)

Page 14: Peer 2 peer regulation

Conclusion The ultimate beneficial ‘ownership’ structure for the costs

and benefits of these ‘innovative’ platforms is important to take into consideration: Value driven? Which Values? People, Planet, Profit? State, Private, Public or Common? Competitive or Coöperative ? Centralized, Decentralized, Distributed or Participative ? Global, Regional or Local ? Stand alone or Networked? Analog or Digital? Closed or Open Source? Protected with a Traditional License, Creative Commons

License or Peer Production License?

Page 15: Peer 2 peer regulation

Conclusion

Conclusion: We start noticing the emergence of activities:

Mixing the above summed up elements; Supported by internet technologies (complex

algoritmes etc) Not fitting in the current legal system and concepts

that, we must not forget, was designed in Napoleontic civilization.

Private sector, Public Sector, Not for profit sector AND Citizens should start collaborating to deal with these emerging activities.

Page 16: Peer 2 peer regulation

Contact

More info:

Erik De Ridder Independent Tax and Legal advisor Founder of the Belgian Center for Sustainable Economies

and Law Research, Education, Advise and Network Referral on

Sustainable Economies and Law Cder.be (in Dutch) [email protected] + 32 476/98.44.84