Going to un-list from Airbnb because of tax and commission issues

The only way I can see what the guest is paying is to go to the “Change reservation” option and there it is stated. Otherwise this info was never available on my profile…

It is getting a complex reply now. :wink:

Yes, but the VAT you pay on the puchase is only deductible from the VAT on your sales.
So a lot of people think it is lucrative to opt for VAT payment, until they notice that in the end it balances itself out, with lesser revenue because they have to increase their prices.

AirBnB is a service provider, and raises VAT (at the Irish rate) only on the service fees.
You are providing the lodging, so you should raise 7% VAT on that. Theoreticaly you would have to send an invoice for every AirBnB stay to AirBnB.

I don’t know about other jurisdictions, but here Airbnb only issues a confirmation email with itinerary to guests, it does not issue an invoice to them. If the booking goes through Airbnb, I still remain the service provider and at least theoretically, I have to raise an invoice on the guest. So when I file monthly tax returns, I have to provide an invoice number for income received from every Airbnb booking.

It is getting complicated indeed! This is how tax works for me in India: for every booking, I have to pay tax on the sum of the room price paid out to me by Airbnb + Airbnb’s commission charged to guest + Airbnb’s commission charged to me. These three amounts put together is the “taxable value” for the transaction. However since commission is part of service provided by Airbnb and not me, I am entitled to take input tax credit on the tax paid on both comnission amounts. In effect, this means that the part of tax I pay on Airbnb’s commission balances out and the net tax I pay is only on the room price paid out by Airbnb to me.

Yes, you are correct.
But as always AirBnB is operating in a very gray area where it’s questionable if their the way they operate is legal.

The way you put it, AirBnB (and other OTA’s) is operating like paypall and thus would need a banking licence, which I think they do not have.

I cannot give my guest an invoice, because I have no clue on what they pay. I can only invoice AirBnB for what they pay me.

Booking.com is one of the few doing it as it is supposed.

This is one of the reasons why AirBnB and others want to get rid of the guest fees, because how they operate now is questionable.

My tax advisor agrees with me, and he told me to put all invoices on AirBnB because they pay the bill not the guest.

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I’ve had a few business guests who have asked me for a receipt. I’ve told them that I can’t do so but that Airbnb may if they request them. I’m assuming that Airbnb has done so (on request) because that’s been the end of the matter.

This is Airbnb USA - I don’t know about other countries.

Well of course we are only talking about the amount host receives, not about any other fees.

So if a guest asks me for an invoice, I usually issue it for exactly the amount I receive, i.e. not including the 3% host fee Airbnb is charging me for “processing of sending the money” (a strange way they have of stating “our hand is in your pocket”).

I always tell guests that they need to ask for an invoice for the remainder of what they paid (i.e. both host and guest fees) from Airbnb, or Wimdu, or whatever.

Hi @p_rose,

I’m not sure if you’re still here, and sorry for the late response. I’m in India too (Bombay). What is your location? I don’t think there are many Indian hosts here.

I see someone pinged me on this thread a while back, but I seem not to have registered it.

I’ve got a couple of questions about your post.

First, my understanding is that the normal thing to do with GST is for Airbnb to handle it themselves. People are only required to get a GST number if they are a sufficiently large - the cutoff is 20 lakhs a year. And in that case I think that Airbnb is supposed to give you the tax to submit. So, I take it that is your situation?

incidentally, I think this usage of the GST is improper. It’s treating all Indian hosts on Airbnb as a single entity for tax purposes, which makes no sense. An Indian host is in no sense part of Airbnb. But I’m sure neither the Indian Govt. or Airbnb cares.

  1. Also, I’m not familiar with “input tax credit”. Can you tell me anything about it or how it works?

I’m interested in comparing notes with respect to STR in India. As I already said, there are not many Indian hosts here, and hardly anyone who is active.

You can see a link to my Airbnb listing in my profile. Just click on the green “F”. Can you PM me your listing (assuming you don’t want to make it public)?

If seems like Airbnb has A lot of Transparent Issues !!! wowow when it comes to this and their only looking after themselves,makes me wonder if I should start …Hmmmm
Taxes were one of my concerns also

Keep in mind that most people land here because they have a problem. There are many folks that we never see post unless they have a problem. So reading all these problems is going to give you a distorted view of hosting. The reality is that there are hundreds of thousands of happy hosts.

Every market, listing and host is different. The best way to find out if Airbnb is for you is to try it. Just don’t quit your day job.