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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?
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.
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.
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
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.
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.
