Not a long time ago I was quite happy to realise that Airbnb offers a new way to advertise your property rates when you as a host pay a flat 14% to them and a guest pays what you actually set in your calendar, so no more surprises or extras for guests. And they can compare different offers on other booking engines too. Quite fair, transparent and honest. But Airbnb would not have been Airbnb if there were no any pitfalls in that scheme. I happily lived and worked with that until I recently got a booking from a guest which country has a VAT in their tax system (to be honest many of countries have it). As soon as shared economy has many debates around it regarding how its services should be taxed, Airbnb decided to be a responsible business and to collect VAT from their service fees sending it (or not sending - we will never know…) to the guest country government budget. Because I opted for “host-only fee” guess who was the final payer of this tax - me!!! And eventually the commission from this booking raised from flat 14% to the variable 16.8%. I urgently sent a ticket to Airbnb help desk and they not so urgently confirmed that I was correct in my guess and is liable to pay VAT because the guest is from VAT collecting country (you can find the list of these countries in the jungles of Airbnb help section). I instantly got back to the old scheme of the price setting where host pays a small fee and guest pays all the service fees and taxes to Airbnb. So if you do not want to subsidise your guests economy do not choose the “host only fee” option for Airbnb commission. However, there are a couple of open questions:
that basically means that the price of Airbnb listing will be different for different origin guests, lets say for United Arab Emirates citizen it will be more expensive than for American. In case of “host only fee” activated it means that host will get less in the first case.
Why for airlines not to start to charge more if you have a certain passport? Or Ebay charge an additional VAT for shipment to these countries? Apparently Airbnb treats that situation as its services rendered to the guest and in the guest country. Therefore it has to be VAT taxable in that country. But the same logic can be applied to many companies which has an international customer base - they could be forced to pay indirect taxes in both countries - origin and the customer and final person who will pay for that is a customer of course. This a clear “Pandora” box.
So, it sounds like this is only a real problem for hosts that accept a significant number of international bookings. But, it really sounds like this is a bug in Airbnb’s platform. The host fees are meant to include all of the things that are under both Airbnb and the hosts control. International taxes are not and Airbnb’s platform should add them on top.
Still, the fact that a one country taxes a service that that it’s citizens receive in another country seems strange to me. Does a traveler from that country have to save all the receipts for everything he/she purchases in other countries and then pay tax on those payments in their home country when he/she returns?
in our country 99% of our guests are from other countries (I am from the small island in the Indian Ocean) and I only recently realised that the price u get as a guest can be different depending what nationality you are. I think the same applies to conversion fee - if u are from India from example and pay in rupees Airbnb charges you a conversion fee so someone has to pay it - either u as a guest or the host as part of ‘host only fee’ program.
This is only a problem if you are not a business and not in a VAT collecting country.
I have to pay VAT, and I can put in the option to collect VAT separately. My guest pays the room rate and I pay the 14%.
On top my guest pays 10% VAT and Touristtax, I do not pay any fees on those.
It seem AirBnB is really moving toward the professional hosts. Sooner or later the pro’s are allowed to collect deposits outside AirBnB.
did not really get what u mean. if u are in a VAT collecting country and your are business you can deduct only VAT related to your purchases in your tax return. at least how it works in my country where i was born but I guess that is similar to all indirect taxes in all the countries. in my case it was a tax (20%) on Airbnb service fee, they accrued it on their own fee and it was subject to taxation in the country of my guest origin. Even if in my current country there was a VAT and I was an established business I am in doubt I could reduce my final VAT tax for this amount because that are different countries taxes. Not sure how you guests pay extra 10% VAT and touristtax. -does Airbnb collect them separately from the guest or you charge the guest at the spot?
I get few international travels do VAT isn’t an issue for me but my area has a state & local tax on hotels & short term rentals.
If to include the fee in my rental means I pay more in state & local taxes because I’ve increased my nightly rate to include the fee. The taxes are based upon my nightly rate.
As long as I have a choice, I’m leaving the booking fees split