AirBnB changes to Australian GST collection

Regulations/Tax Issues
1

I’ve read a few posts (on here and elsewhere) that say that GST is not applicable to short-term rental income in Australia - you just declare it as ordinary income. While this may be true if you are renting out part of your own residence, it is not always true - for example, if you rent out a property that was specifically built to rent, run a business registered for GST, or the property is owned by a business, or it makes over $75,000 annually.

In such cases you are required to charge GST and remit it to the ATO. Theoretically, you also have to issue GST invoices, but since AirBnB handles the financial interactions with guests, that is their responsibility.

This all worked fine for us up till now - we added the appropriate “custom tax setting” for the 10% GST (aka VAT) to our listing, AirBnB declares it to the guests, collects it for us, and we remit it to the tax office as required.

But now AirBnB have sent me an email saying that they are about to remove my ability to specify a GST/VAT. I have asked them what we are supposed to do instead, but they don’t even seem to understand the question. They keep directing me to the same useless “help” page which does not really even address this issue. It says I will have to do manual tax collection from guests on check-in. Not only is this not legal in Australia (e.g. it is illegal to advertise prices without including GST) it would also lead to some very difficult confrontations with guests.

My only option seems to be to bump all my prices up by 10% to cover my GST obligations. This means guests pay the correct amount, and I can continue to remit the appropriate amount of GST to the tax office, but it does not address the issue completely - for instance, AirBnB will no longer indicate to guests that they are paying GST, or issue GST invoices (another legal requirement in Australia).

Is anyone else affected by this issue? If so, how do you plan to deal with it?

2

If Airbnb is asking hots to do something hat is illegal in Australia, why not enlist your Member of Parliament to alert whatever department of the government that manages tax collection.

In most major jurisdictions, there are high-level channels between Airbnb & tax-collection departments: the government’s want to make sure they are getting every penny due to them and Airbnb wants to avoid legal or financial problems that could prove costly to both their bottom line and their reputation.

3

They haven’t actually done so yet, and it is only illegal for a subset of hosts.AirBnB clearly have no staff familiar with Australian tax law. Certainly the support staff I have been dealing with do not have a clue. They barely even seem able to understand English. I quote their own email back to them and ask them what it means, and they cannot explain.

My current plan (since I seem unable to do anything else) is to wait until they do whatever it is they are going to do and then worry about the consequences. But you are correct - if they end up forcing me to break Australian tax law, then I will notify the tax office and let them deal with it.

I just wondered if I was the only one who received the email saying they are going to turn off the only feature to allow you to charge GST properly.

1 Like
4

Okay – if Airbnb is offering you what seems to be confused and uninformed advice… same aomment.

5

Well - now two days past the deadline mentioned in the email from AirBnb, and several dozen fruitless interactions with ‘support’ later … AirBnB have done nothing and are still ‘investigating’.

Maybe they should have ‘investigated’ the Australian tax implications before sending their email :grimacing:

6

Are you registered as a private person or a business on AirBnB?

As far as I know, if you register as a business with valid registration number and VAT number AirBnB will not collect any tax, but will report your business income.

Not only AirBnB but also BDC and other platforms are forced to collect data and report income to the government.

7

We are a professional host and run a business registered for VAT/GST. We provided AirBnB all the required information, and selected the appropriate VAT/GST option on all our listings (this option is still available, despite them saying they were going to remove it on Nov 15th). AirBnB declares this tax to guests, collects it on the accommodation fees and forwards it to us to send to the tax office. Which we do. We are aware that AirBnB sends the same information to the tax office as we do, so there is no way around it for either AirBnB or us.

This situation has been in place for around a decade, works perfectly well, is all above board and (AFAIK) is compliant with Australian tax regulations.

Now someone in AirBnB has apparently decided this should change - but they cannot explain how or why, or what we are supposed to do instead to remain compliant with the Australian tax laws. The page they sent us to try and explain the changes essentially says our only option in future will be to do manual tax collection - i.e. put our hand out to guests on arrival for any taxes owing.

Not only would this be illegal, I doubt we would survive long if we tried to enforce it.

My current belief is that someone in AirBnB has gotten confused between the GST they are obliged to pay on the services they provide (i.e. booking services), and the GST we are obliged to pay on the services we provide (i.e. accommodation services). The two are completely separate.

2 Likes
8

Hi Rossh,

I am currently trying to register for GST and allocate it on Airbnb, have they removed the GST specific option? If not how do I add this to my listings? Struggling to find any information about Australian taxes/GST on airbnb help.

Appreciate the help and information you have already provided!
Jae

9

Hello Jae8

First of all, forget about asking AirBnB. They know as much about Australian taxes as they do about customer service.

Next, make sure you are REQUIRED to be registered for GST, or else that you REALLY WANT TO DO SO. We are required to do so because we run an accommodation business, but if you are just renting a room in your house, you do not have to either be registered for GST or collect it. However, you may WANT to do so for various reasons.

Here is what I do/did:

Open the “Listings” tab and select your listing (if you have more than one, you will have to repeat this process on each one). You will end up in the “Listing Editor”.

Click on the Preferences button (top of left pane - a little unnamed button with three horizontal sliders).

Click on “Taxes (Manage how taxes are collected)”.

Under “Custom Tax Collection” select “Add a Tax”. Select the type of tax as “VAT/GST”, and select “percentage per booking” and enter “10%”

You will need your business ABN. I entered mine in both the “Business Id” and “Accommodation tax registration number” because I have no idea which one is the right one. But putting it in both seemed to work ok.

When you have done all this and click “Save”, you may get an error saying “Failed to update in UpdateHostConfiguredTaxRuleMutator.” I get this on some listing but not on others, with identical information entered. I’ve no idea what it means, and neither does AirBnB. I reported this error to them months ago. They still have not fixed it (I just checked again).

Finally, ignore anything AirBnB says about “taxes” on their payouts. It’s all wrong. Just submit 10% of whatever you get paid to the ATO as GST every quarter. Less whatever GST you paid on your expenses, of course. In a slow quarter I may end up with the ATO owing me money.

If none of this works for you then all I can recommend is that you just bump your prices up by 10%. Technically, you will be breaking Australian tax law by not declaring you collect GST and not issuing GST invoices, but there is probably nothing you can do about that.

Ross.

1 Like
10

I am in USA now, and Airbnb was not charging GST at all to me, when I was a private individual, or as a registered foreign business (London). When I was in Australia physically, and didn’t have my VAT number registered correctly (so I discovered or so they say - I dispute that…) I was being charged 10% GST. When I was in Sweden for two years over the pandemic I was being charged 25% GST, despite my property being in Australia.

I no longer get charged any GST on my Australian property via Airbnb, but I do via BDC and VRBO. I tried to figure it out. I lodged official tax office queries. I asked support of the platforms, but after a lot of effort, I have resigned myself to not being able to figure it out, or fix it. I figure it is up to the ATO to clarify if they were not happy with this situation, and given I have actively contacted the ATO to ask them, and got a lame response and no follow up… I figure I have done my best. I will not be asking guests to pay GST directly, or issuing GST invoices to guests who have not paid me either.

So there is an obvious benefit to me (not being charged any GST on Airbnb which is most of my income AND it’s well over $75k pa). But I am not an Australian tax resident, and I certainly do pay tax on it, but to the UK. I am also not subject to the App tax either, being outside Australia when I ‘use’ the app to accept bookings etc… unless I I am in Australia at the time of the booking.

We can’t issue GST invoices to guests as it’s technically Airbnb charging them, and also technically I understand NOT on ‘our behalf’ either.

Here’s Grok’s take on the issue of why Airbnb treatment of GST is very different to the other platforms. Note also there was a change April 2024.

https://x.com/i/grok/share/nRPa2DafSvojOfMAhKAq4iLRw