We’re not in the UK. We’re in the Europe. We don’t have that tax rule here.
Ok, if you’re going to be pedantic.
Are you registered for IVA?
Of course you do.
Are you really a Spanish host?
JF
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I understand that but newbies only see the bigger price up-front and don’t understand the final fees until they put the listing in the cart, so to speak.
I even tried “NO guest fees” as my first line and got blasted for my high prices. So I’ll wait and keep solidly booked (hopefully that keeps up the rest of this year), and see if ABB pushes all fees back on the hosts.
Plus, I’d have to add the 10% hotel tax that my county collects. So I’d take my $75 room and add 15% for fees, 7.5% for taxes, and 10% for hotel tax in order to make the money I’m making now.
One of the first Airbnbs in Mallorca. 2008.
No, sorry, the vat threshold is a UK thing.
No we are a sole proprietorship. Not VAT registered. We pay tax on the income.
OMG! Do you offer a CPA review course? I need to study this.
Is there a way that the guest does not pay even 5% more?
If you’re not registered for IVA, then you’re not paying 15%.
I’d hold back on that’un fella.
JF
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The problem with Airbnb regarding the choice between host only service fee vs. split fee is that it’s stupid and unworkable for a platform to have a choice, because of course it is going to make some properties appear more expensive, compared to others, when they really aren’t.
Service fees need to be applied the same across a platform, so there is an even playing field. It will be the rare guest who will drill down and say,“Oh, but wait, on this one there’s no guest service fee and on that one there is, so actually the no guest service fee one is the better deal here.” Or vice versa.
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Another reason we went to the full commission model is because it’s the same model as the other platforms.
The platform that brings us the second largest number of bookings was complaining that our pricing was 15% below theirs, but it wasn’t. It was the 15% Airbnb “service fee” that the guest pays. By switching to the full commission model, the advertised prices became equal.
And it’s easier for our Gestoria to reckon it this way.
That’s a pretty misleading, and factually incorrect comment.
In the olden days, hosts paid 3% commission and then Airbnb applied VAT1 at the rate of 21%2 to that commission, before deducting the total from the hosts payout.
Example: €100 booking nets the host €96.37 (€3 + 21% VAT = €3.63 deduction)
The guest would pay around €114
Fast forward to now, and many hosts in Europe have been (arbitrarily) moved over to the host only commission structure because they use a channel manager. I suspect this is a long term trial before moving the complete platform over to it.
So, under the HO commission structure, this is what happens to our €100 booking when the price is increased by 20%.
Example: €120 booking nets the host €98.22 (€18 + 21% VAT = €21.78 deduction)
The guest would pay €120
While the guest may only pay 5% or so more, to then say:
Is incorrect.
The guest does only pay around 5% extra, but your increase in revenue is only €1.85, not 8%, actually only 1.54%
What you’ve forgotten, or weren’t aware of when quoting your figures, is the fact that under the HO commission structure the VAT element (essentially paid by the host) increases exponentially. If you’re registered for VAT, then it’s simple, you claim the VAT element back.
If you’re not registered for VAT, then you simply suck it up, essentially as part of the commission.
What this means, in simple terms, to a non VAT registered host using the HO commission structure, is that it’s not 15% commission, it is actually 18.15%.
It doesn’t. In Europe, the prices on Airbnb are displayed as per night, and a total for the booking, with both including any cleaning fees and taxes. In reality, it doesn’t make any great difference to a guest looking at prices.
Once you’ve got your head round the ramifications of the HO only commission structure it isn’t that bad. Other than the VAT it’s the same as BDC which makes setting/editing prices simpler, at least it does for me 
The VAT element also throws up some interesting little nuggets, for example BDC don’t charge VAT on the commission, as yet. I suspect that’ll change at some point in the not too distant future as they’ve been nagging hosts to add a VAT number to their profile for around nine months now.
Because we were initially with Homeaway, now Vrbo, we get charged 20% VAT, the UK figure not the Spanish 21%. I’m not complaining, the 1% is better in my pocket!
All of the above relates to hosting in Europe, elsewhere I’m sure is different regarding sales taxes, occupancy taxes and how Airbnb deals with them.
JF
1In Spain VAT is IVA, Impuesto sobre el Valor Añadido, which when translated to English is unsurprisingly Value added tax 
2Our rate is 21%, other European countries differ so the totals here are only applicable to Spain.
In Mexico, Airbnb now adds the IVA of 16% on the nightly rate to the guest’s cost, plus the guest service fee (I’m on split fee) and deducts the ISR (income tax at 4%) and the 3% host service charge from the payout.
They release 8% of the IVA to the host, for the host to use in their monthly acccouting (we have to file and pay taxes monthly), and withhold 8% of the IVA and 100% of the ISR, which they supposedly remit to the Mexican tax dept.
And they charge IVA on the service fees as well.
It’s all quite complicated now. They just started charging and collecting taxes in Mexico since I stopped hosting due to Covid in March 2020, but I have my first guest since then arriving today, so while I used to do my own accounting for my Airbnb and my upholstery business, I just hired an accountant.
Congratulations 
We do our UK taxes ourselves, been doing it for so long now that it’s an absolute doddle. However, for our taxes here we use an asesoria (sort of para accountant) as the system is nowhere as straightforward. Lots of Spaniards do the same, dump your shit with him, pay him his €50 to €100 and it’s job done. No stress.
JF
Thank you John.
However, IVA (and any other operating expenses such as commissions) is fully deductible from our income tax. So, we still get the benefit. That may not apply in the UK. I can’t say.
That’s what I figured. I could have spent days trying to figure out the accounting, and then another hour and a half every month actually doing it, but would rather pay someone else who knows exactly what to do so I don’t have to think about it. And can use the time I would have spent on it doing my upholstery work and earning $.
There are a lot of very confused hosts these days who list an Airbnb in Mexico, but who are not Mexican residents, therefore can’t get a Mexican tax number, and don’t seem to understand that. They are posting on forums asking how to get a tax number, because without one, Airbnb charges the guest and withholds and submits 20% ISR instead of 4%. Which of course makes the place more expensive. But what these hosts don’t get is that you can’t get a tax number if you aren’t a resident, that you are not supposed to be earning money in Mexico as a tourist, and they don’t want to apply for residency because it’s more bureaucracy.
I.e., they are upset about having to actually comply with Mexico’s tax laws. They thought they could just have a vacation home in Mexico they rented out when they weren’t using it themselves, without paying any taxes to Mexico.
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Not entirely, and in reality only a very small portion.
JF
NB: Southern CA cabin on 5 acres. No need to talk about VAT…
We switched to the HO service fee because I feel most people really don’t assume that there’s going to be a service fee, but then see it and are pissed off about it and may decide not to book. Something along the lines of, “Jeez! $XXX per night and then there’s this fee AND a cleaning fee, AND then taxes? Let’s find a cheaper place.”
So we went with HO and allowed ABB to raise our base rates by a percentage that makes our payouts the same as before or a tad higher. The nightly rate increase the potential guest sees is only marginally higher and, unless some guest is running a spreadsheet to track which hosts twiddle with their rates all the time, the nightly rate comparisons between competing locations is entirely subjective. Even 2 places with the same amenities and beds can have prices wildly apart and the more expensive one will get booked maybe because it has a view or is closer to the bus stop.
It’s related to why we don’t use ABB’s price helper or whatever they call it. They are constantly telling me we should lower our rates to get more bookings. We’re pretty well booked, and their algorithm seems to ignore things like COACHELLA. ABB wanted me to lower my rates for the music festival. I raised them and got booked for a week almost immediately. The algorithm also can’t really tell a leaky Airstream from a modern cabin that sleeps the same #, and wants me to lower my rates cuz the Airstream rents for $90 a night. But we’re at $200 a mile away.
This is all to underscore that the value of a rental is subjective. It’s either in a guest’s budget or not. So if my place goes from 205 to 214 it doesn’t hinder the guest. And then, when they see the actual money they’ll pay, they see their nightly rate, our reasonable cleaning fee, and the tax. That’s it. Booked.
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Our Gestoria (one of the most respected experts in tourism law and taxation here) deducts our operating expenses in full from our quarterly income. This includes commissions and the Iva charged on those commissions from all platforms.
Again, it may be different in the UK. And just for clarity, UK tax law is not applicable in Spain.
This is the same character we experience here.
We do have the advantage of being a wildly popular tourist destination, so bookings are pretty much guaranteed, at any reasonable price - which means anything not prohibitively expensive - but even the completely overpriced listings get bookings (although tend to suffer ratings problems due to overall value).
Also, Europeans don’t seem to exhibit any shortage of money nowadays, so that keeps prices elevated, particularly in the high season.
But our operational costs are rising too. Substantially.
Why do you keep banging on about the UK when you reply to me, I haven’t lived there for years
JF
Here in Mexico it works differently. I can deduct my running expenses from my income as long as I have official facturas for the purchases, but the IVA I am charged on those purchases is accounted against the IVA I owe on my income. So in any given month I might owe IVA, or I might have a surplus of IVA credit that can be carried over to the following month.
In other words, the IVA is not deducted from my income tax, which is a separate thing.
You’re missing the point in respect of IVA charged by OTA’s, again.
Yes it’s tax deductible, as an operating expense, but you’re only getting tax relief on around twenty percent or so. It’s no different to any other factura.
You’re either being deliberately obtuse, or simply can’t grasp the basic principle. I’m done here.
JF