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.