❗️Airbnb Still Charges 21% VAT Instead of 7% IGIC for Canary Islands Hosts — Years of Confusion and No Solution

[Ludek2]

Hello everyone,

I’m writing this post out of frustration, but also in the hope that it helps other hosts in the Canary Islands who might be facing the same issue.

For several years now, Airbnb has been applying 21% VAT (IVA) to host service fees for listings located in Tenerife, even though the Canary Islands are not subject to Spain’s standard VAT system. We have our own local tax called IGIC (Impuesto General Indirecto Canario), which is 7% — clearly established in Spanish law since 1993.

Despite repeatedly contacting Airbnb support, explaining the legal distinction, providing official government sources, and even mentioning that other hosts in Tenerife have had this issue corrected and received refunds, Airbnb still continues to apply 21% VAT.

What’s worse is the type of responses we get from support:

Some agents claim VAT is based on the location you log in from, not where the property is.

Others confuse Tenerife with mainland Spain or even USA (yes, really).

Some say Airbnb hasn’t “received a mandate” from the Canary government — as if a law that’s existed for 30 years doesn’t count until they get an email about it.

And most recently, the explanation was simply “we can’t do anything until our system is updated.”

In the meantime, hosts here continue to lose money every single month through these incorrect charges.

It’s disheartening to see how a global platform like Airbnb can be so dismissive of local tax realities. We’re not asking for anything special — just that Airbnb respects the existing law and applies 7% IGIC instead of 21% VAT for listings in the Canary Islands.

If anyone else here has faced (or is still facing) the same issue, please share your experience. Maybe together we can push Airbnb to finally recognize IGIC properly and treat Canary Islands hosts fairly.

Thanks for reading,

Host in Tenerife 🇪🇸🌴

[Mike-And-Jane0]

@Ludek2 if you are talking about the VAT on the service fee then I always thought this was charged in the jurisdiction the the Airbnb office is based. Presumably this is mainland Spain for the Canaries?

[Ludek2]

Thanks for your comment—it's a common assumption, but actually, the tax on Airbnb's service fees should align with the host's listing location under EU and Spanish rules. The Canary Islands' IGIC (7%) applies here, not mainland VAT, since it's tied to the services provided via the property. Airbnb's office location handles their corporate taxes separately, so they're two distinct things. If you've seen otherwise, I'd love to hear more!

[Kate1762]

That’s actually not correct. The VAT (or IGIC, in our case) is applied based on the location of the service provided — meaning where the property is located — not where Airbnb’s office is registered.

The Canary Islands are outside the EU VAT zone and have their own tax system, IGIC (7%), established by Spanish law since 1993 as @Ludek2 wrote. So applying 21% VAT to host service fees in Tenerife or any of the Canaries is legally wrong. Unfortunately, Airbnb keeps doing it, and their support doesn’t seem to understand or acknowledge the laws and facts, even after multiple reports from hosts. I hope that other hosts will also open calls about this important issue

[Kate1762 · Accepted solution]

I completely agree with this post. I’ve faced the same issue — Airbnb keeps applying 21% VAT to host service fees for properties in Tenerife, even though the Canary Islands are subject to IGIC (7%), not VAT. This has been clearly established in Spanish law since 1993.

Despite explaining this repeatedly and providing official references, Airbnb support continues to ignore the distinction. Most of their replies seem to be generated from templates or even AI bots — often including irrelevant information or links that don’t exist. My experience with their support has been highly unprofessional and shows a complete lack of understanding of the local tax system, even to the point of abusing their position instead of solving the issue properly.

[Kate1762]

https://ibb.co/TxSv28MM

I wanted to share an example of the absurd and unprofessional responses hosts can sometimes receive from Airbnb support.

This is a screenshot of a reply I got regarding VAT for my listing in the Canary Islands. As you can see, it contains multiple errors:

• Incorrect location assumptions — my listing is in Tenerife, Canary Islands, but the support agent claims I reside in Virginia.

• Incorrect logic — it claims VAT is applied based on where I log in, not where the property is located, which has no legal or technical basis.

• Broken and misleading links — the link provided does not work.

• Automated / AI-generated elements — the message even contains an empty placeholder “(enter location)” indicating it was not properly reviewed before sending.

This type of response shows a lack of understanding of tax rules, IGIC vs IVA (VAT), and proper support practices, and it’s unfortunately common when trying to resolve Canary Islands tax issues with Airbnb.

[Ludek2]

I had almost identical responses from Aribnb support. I'm glad that other hosts are also confirming this. Thanks

[Joan2709]

@Kate1762 

Yes...frustrating.

Perhaps one of the moderators could forward this to the correct team at Airbnb since it involves numerous Hosts and is compounded by the change in the new 15.5% single fee for Hosts? They also need to address the broken links in emails and incorrect location information:

@Rebecca @Bhumika 

@Kate1762 @Ludek2 

You could also try to get government officials to contact Airbnb through their City Portal and advise them of the correct information:

Airbnb City Portal

https://www.airbnb.com/cityportal

Lastly...you may need to post about this on Airbnb's social media accounts (X/Twitter, facebook).

[Ludek2]

https://community.withairbnb.com/t5/Community-cafe/%EF%B8%8F-Airbnb-Support-Is-Failing-Hosts-This-Ne...

[Marta2011]

Hola Ludek2,

I'm having the exact same problem with Airbnb Support Center and I couldn't be more frustrated.

Yesterday I spent half a day writing messages and exchanging e-mails with the Support Center 

explaining that: 

"It is impossible that my account activity shows I am residing in mainland Spain".

(Simply because I haven't been there for almost 8 years.)

"When I created my Airbnb account, I was physically in the Canary Islands, and I provided all the necessary property and tax details during registration. All my data and VV licence that is connected to Tenerife, CI. If there is any issue with how my tax location is currently set, please explain how I can update or correct my tax information in the system — given that the Canary Islands are officially part of Spain, but outside the EU VAT area.

I kindly ask you to review my case again and advise how to ensure that VAT is correctly applied (0%) according to the tax status of the Canary Islands."

In return I have received the very same automatic message as you did and a faulty link. I tried to talk with someone on the phone, but when I reached a consultant, SHE REFUSED TO SPEAK WITH ME ABOUT IT !!!!    I have told her that I keep receiving automatic messages, and I don't want to continue that conversation with that particular person and I ask one more time to call me back ... but in return I have received only that very same automatic message.  

Did someone manage to change those settings correctly?

My Canarian accountant said that some of her clients receive invoices correctly from Airbnb with 0 % -  so apparently this can be done with a bit of engagement from Airbnb...

Can someone from Airbnb executive team take a look at this problem ? 

[Maria24949]

[Maria24949]

Airbnb has already issued official written refunds confirming the 21% VAT was incorrectly applied to Canary Islands listings. It has also issued invoices showing 0% VAT for identical territory. Therefore this is not a legal question — it is a configuration error that Airbnb has the technical ability to fix and the legal obligation to fix permanently.

[Maria24949]

Hi,

Your frustration is completely valid, and everything you're describing is part of a well-documented pattern that many of us in the Canary Islands have experienced.

A few things worth knowing that might help you:

Yes, it can be done. Your accountant is right. There are accounts where Airbnb has correctly set VAT to 0% for Canary Islands listings. We've even seen two invoices side by side — same territory, same platform, one showing 21% IVA and one showing 0%. That alone proves this is a system configuration issue, not a legal impossibility.

The key is getting past front-line support. Standard agents work from templates and are not trained on regional Spanish tax distinctions. They genuinely don't know the difference between IVA and IGIC, and their scripts don't cover it. Asking them to fix it is like asking someone to repair something they've never seen before.

What has actually worked for some hosts:

• Referencing a previous written confirmation from Airbnb (if you ever got one) that the VAT was incorrectly charged — that forces them to acknowledge the precedent
• Explicitly asking for escalation to the Tax Compliance or Billing team, not a supervisor on the same front-line tier
• Writing formally to Airbnb Ireland (8 Hanover Quay, Dublin 2) rather than going through chat support — formal written complaints get treated differently
• Mentioning that you are documenting all communication and may file a formal complaint

The core argument that's hardest for them to deflect:

Airbnb has already issued refunds to Canary Islands hosts confirming the 21% VAT was applied incorrectly. They've also issued 0% invoices for identical territory. So this is not a matter of interpretation — their own system already handles it correctly in some cases, which means it's a configuration error, not a legal constraint.

You're not alone in this, and it's not your fault the system is set up this way. Keep pushing, document everything, and don't accept case closure without a written answer about the system-level fix.

Good luck 👍

[Natalia1873]

https://community.withairbnb.com/t5/Ask-about-your-listing/IGIC-vs-IVA-en-Airbnb-lo-que-hemos-descub...

[Liliana234]

Creo que serv Airbnb debería solucionar el problema con su servicio técnico y crear una ubicación o país isla Canarias con un valor de 7% de IGIC y pagarlo al gobierno de Canarias y no seguir en el caso de las islas canarias con IVA a 21%. He leído que en algunos caso han devuelto la totalidad del IVA al anfitrión, no creo tampoco que esté justo. Les estará cobrando también los 21% de IVA al cliente?