The owners of apartments rented by platforms specified as Booking or Airbnb faced a challenge. Fiskus took them under scrutiny and began to control for unpaid taxes. In the worst case scenario, they may be forced to settle the backlog even 5 years back. See who the problem is and what the legal consequences are.
Why are the tenants targeted?
The taxation office is increasingly controlling people renting apartments in the short word through net platforms. Interestingly, this is due to unclear government and conflicting information provided by Ministry of Finance. According to a fresh letter from the Ministry, people who rent apartments do not gotta set up a business, but in practice the taxation Office frequently decides differently.
Life events taken
‘Gazeta Wyborcza’ recalls examples of people who rented their apartments through Booking and Airbnb. Although the Ministry of Finance allowed specified transactions to be settled under private lease, The taxation office ordered them to set up a business. This, of course, entails higher costs, as taxation rules are changing.
- Private rental: the lump sum is 8.5% of revenue.
- Economic activity: Renter must pay PIT or CIT, VAT on accommodation (8%) and VAT on import of services (23%).
Experts point out that the letter from the Ministry of Finance has no legal force, and the only way out of the situation would be for the Ministry to issue a general taxation interpretation. However, the rules are so vague that the taxation may require rental companies, regardless of erstwhile arrangements.
Checks with backlog in 5 years
For people who rent apartments in the short term, the control of the taxation office may have serious consequences. Fiskus has the right to request payment of outstanding taxes for up to 5 years back, which may mean a considerable financial burden to the tenants.
In addition, the late introduced EU Directive DAC7, which aims to prevent taxation fraud, forces platforms specified as Booking or Airbnb to study detailed information about tenants. If the number of transactions exceeds 30 per year or revenues exceeds EUR 2 000, the data shall be automatically transmitted to the taxation Office.
What do you expect?
Experts indicate that more and more tenants can anticipate control. Platforms reporting transaction details make it much easier for the taxation to track the activity of tenants. This means that even those who have so far accounted for private rental can be forced to change their approach and set up a business.
What are the risks?
For renters who do not follow the rules and do not account properly, the hazard is high:
- Outstanding taxes: The taxation may require interest payments for up to 5 years back.
- Additional costs: a change in the form of taxation to economical activity can mean a much higher fiscal burden.
Therefore, it is worth checking carefully what taxation obligations are imposed on people who rent apartments in the short word and how they can be protected from financial consequences.
For tenants of apartments on platforms specified as Booking or Airbnb, the control of the taxation Office becomes an increasingly real threat. The change in the fiscal approach and the ambiguity of the rules make it possible for any to be forced to set up an economical activity and pay outstanding taxes for many years back. With a view to financial security, it is worth following legal interpretations on an ongoing basis and considering consulting a taxation advisor.
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The IRS is going hunting. Renters at Booking and Airbnb can pay taxes even 5 years back!
