Tax Updates for Short-Term Rentals in the EU

The landscape of short-term rentals, including platforms like Airbnb, is ever-evolving, with tax regulations frequently updating to keep pace with the industry’s growth.

A major talking point at this year’s ShortStay Conference, held at the Conference Center of Ancient Eleonas in Athens, was the new tax updates affecting short-term rental hosts, owners, and property managers across the European Union.

This topic, crucial for anyone involved in the short-term rental market, was highlighted by the presence and insights of key industry figures, focusing on Airbnb tax rules, income tax, occupancy taxes, and the importance of consulting with a tax professional for tax advice.

The ShortStay Conference, a pivotal event for the short-term rental industry, brought together more than 45 speakers who delved into various industry challenges and developments, including the intricacies of tax laws, tax credits, how to deduct expenses, and managing taxpayer information in a valid form.

Among these, the new taxation and legislation changes in the EU were discussed extensively, signaling their significance to the industry’s stakeholders, especially regarding income tax return and how to efficiently pay taxes.

The Essence of the New Tax Updates

The Deputy Minister of Finance, Haris Theocharis, in his videotaped greeting, underscored the importance of short-term rentals as a significant source of rental income for thousands of owners. He outlined the main points of the new regulation, emphasizing the government’s intention to simplify transactions and reduce opportunities for tax evasion, which he described as an antisocial act.

He highlighted the need for Airbnb hosts to understand these changes, including how they relate to Airbnb income, occupancy taxes, and state taxes. Additionally, the process for non-US hosts regarding income earned and the need to pay taxes was addressed.

Representatives from the governor of AADE, Angelos Kouros and Apostolos Butos, addressed ambiguities in the new tax framework, reassuring attendees that a clarifying circular would be issued. They highlighted a particularly welcome update: private individuals owning up to two properties would not be subject to the transient resident fee, offering some relief to small-scale hosts and providing tax advice on how platforms can automatically collect taxes to save time and money for hosts.

Christina Bouioukou, a representative of the accounting firm KRS, and Ioanna Kellarakou, owner of Kalypso Hospitality, further enriched the discussion. They explored practical ways in which managers could organize their accounting obligations to comply with the new regulations, including deductions, costs, and payments management for tax purposes. The importance of a tax professional in ensuring accurate tax return filing and maximizing deductions and credits was emphasized.

EU Legislation and Transparency

The conference also shed light on upcoming legislation from the European Union aimed at ensuring transparency in transactions with platforms, addressing how income and taxes paid through services like Airbnb should be reported.

Viktorija Molnar, Acting General Secretary of the European Holiday Home Association, along with Iban Rabasa from Expedia, Nasos Gavalas, President of STAMA Greece, and Marco Celani, President of the Italian Association of Short-Term Rental Managers (AIGAB), all discussed the implications of these changes.

They urged Greek professionals to engage with collective bodies to influence the creation of a sustainable framework for short-term rental activities, touching upon the need for legal guidance in navigating tax laws and the importance of tax returns.

Implications for Hosts, Owners, and Property Managers

For hosts, owners, and property managers in the EU, these updates signify a shift towards more regulated operations. The emphasis on transparency and simplification could lead to more streamlined processes, but it also requires a thorough understanding of the new obligations and opportunities, including how to manage rental income, file taxes, and consult with tax professionals for advice.

The role of platforms like Airbnb in collecting occupancy taxes and providing taxpayer information was highlighted, along with the need for hosts to keep accurate records of earnings, deduct expenses, and complete necessary tax forms.

iGMS, recognized as a key player in the industry and featured in AJL Atelier’s extensive short-term rental industry map, is at the forefront of providing solutions that help stakeholders navigate these changes. With features designed to simplify property management, iGMS aids in ensuring compliance with new regulations, making it easier for hosts to adapt to the evolving landscape, pay taxes efficiently, and save time and money.

TL;DR

• Mandatory Property Registration: Obtain a registration number for transparency.
• Regular Spot Checks: Platforms will verify listings for authenticity.
• Compliance with Tax Laws: Register for VAT if applicable, and report rental income as business revenue.
• Fair Competition: Aimed at leveling the playing field with traditional accommodations.
• EU-Wide VAT Collection: Plans to make platforms collect VAT, facing industry opposition.
• Transparency and Data Sharing: New EU rules require host registration and data sharing with authorities to regulate the market and promote sustainable tourism.
• Costs: Include VAT on rentals and administrative expenses for compliance.
• Consequences for Non-Compliance: Fines, listing removal, and potential legal action.

Hosts and rental owners need to adapt to these regulations to stay compliant, avoid penalties, and ensure fair competition in the tourism sector.

Moving Forward

You need to stay informed about tax regulations and legislative changes. These insights from the ShortStay Conference are another reminder that the industry is dynamic in nature and you’ll need to stay adaptable to keep up.

For hosts, owners, and property managers, platforms like ours provide the tools necessary to navigate these changes successfully, not only ensuring that your business complies with new regulations but also giving you an edge over the competition.