AirBnB withholding tax for non-US listings and non-US resident

[Jay18]

Recently AirBnB started withholding tax, which we believe is an amount for US income tax. The thing is, none of of our listings are in the US. The person who created the AirBnB account for the business who owns or leases the rental listings is a resident of the same non-US country. One AirBnB rep said that in order to avoid US income tax withholding, the company needed to open a business account. Anybody ever hear of that? I spoke with another AirBnB rep later, and they stated there was no such thing as a business account for hosting, only business accounts to find places to rent for their employees, etc.

[Joachim36]

Hi Ant,

I am having the same problem. I am very desperate, nobody seems to be able to help me.

Did you find a solution?

[Nan18]

Hi Joachim,

Does airbnb still withold your tax? I have same situation, non-american list, non-american resident, non-american income, but they start to withold 30% tax from this year october, I filled W8ben form, do you think it will stop them withold tax? Customers cannot help and answer my question. Could you kindly share your experience to me?

Thanks a lot!

[Joachim36]

Hi Jay,

I am in the same position. I am from The Netherlands and have zero connection with the United States. They withholded the American tax 28% of all my bookings for a month. I had to fill in the form you mentioned, which I did. At the moment everything is good again. But I still want my money back they took from me. After calling them almost everyday for 8 weeks now, they say it is out of their hands.

Did you solve it eventually? I am very deperate and don't know what to do anymore.

Thanks for your time!

[Mike448]

Same situation from South Korea.

Did you get case manager from Airbnb?

Do you have a ticket number?

*sensitive information hidden*

Thank you.

[Barbara98]

I am from Jordan and rent out property in Europe.  So far no US tax witholding, but today I was asked to set a 'minimum payout amount' on the Eurpean bank account, so Air Bnb will hold payouts until that minimum is reached.  I tried to enter an amount but so far it seems to be rejected.  What is that about and why is it being asked all of a sudden?  

[Jay18]

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 wrote:

I am from Jordan and rent out property in Europe.  So far no US tax witholding, but today I was asked to set a 'minimum payout amount' on the Eurpean bank account, so Air Bnb will hold payouts until that minimum is reached.  I tried to enter an amount but so far it seems to be rejected.  What is that about and why is it being asked all of a sudden?  

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As far as I know, a minimum payout amount has always been required for each payout method. For some payout types, they might not have required a minimum payout amount in the past, but now require it. No one knows for sure what is going on at AirBnB. Just ask someone who works there. 😉

[Nan18]

Hi Mike,

Does airbnb still withold your tax? I have same situation, non-american list, non-american resident, non-american income, but they start to withold 30% tax from this year october, I filled W8ben form, do you think it will stop them withold tax? Customers cannot help and answer my question. Could you kindly share your experience to me?

Thanks a lot!

[Samah0]

Hi Jay!

I am in Cairo Egypt and i am facing the same situation. You said you filled in a form to make things good again, what form is that? and how did you fill it in without the US tax information? Your help would be greatly appreciated!

Thank you in advance

[Jay18]

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 wrote:

Hi Jay!

I am in Cairo Egypt and i am facing the same situation. You said you filled in a form to make things good again, what form is that? and how did you fill it in without the US tax information? Your help would be greatly appreciated!

Thank you in advance

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My situation will likely not match yours. In a nutshell, you will have to file some sort of tax return with the IRS to get the 28% AirBnB withheld returned to you. Once deducted from your payout, AirBnB WILL NEVER return the money to you. Well, if a court of competent jurisdiction tells them to, then they would. But otherwise, forget it. So you will need to determine which IRS form to file to get a refund of the money AirBnB "stole" from you. Good luck!

[Jay18]

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 wrote:

Hi Jay,

I am in the same position. I am from The Netherlands and have zero connection with the United States. They withholded the American tax 28% of all my bookings for a month. I had to fill in the form you mentioned, which I did. At the moment everything is good again. But I still want my money back they took from me. After calling them almost everyday for 8 weeks now, they say it is out of their hands.

Did you solve it eventually? I am very deperate and don't know what to do anymore.

Thanks for your time!

---

Hi Joachim,

Once AirBnB withholds the 28% of your income, it is "out of their hands". Granted, they should have never withheld the money in the first place, and it *WAS* in their hands when they made the decision to do that. The only way you will be able to get the withheld 28% back is to file a tax return with the IRS. Which IRS form you need to file can be difficult, if not impossible, to determine, depending on your situation. Good luck!

Regards,

Jay

[Janie37]

Same here! Canada listings, Canadian Corp, Canadian Owners. A couple throusand $$ have been withheld at this time from our bookings. What's worse is that when we were first notified about the requirement to update our tax info, I called AirBnB because none of the 3 options matched our situation - I was told that it was ONLY FOR US HOSTS!! Imagine my frustration...

To add insult to injury,  AirBnB points to our local tax professional and local tax professional points to AirBnB...

I'm about to call the IRS. Did anyone get a reimbursement or commenced a process with the IRS?

Thanks all,

[Jay18]

@Janie37 The sad news is, once AirBnB withholds US taxes from your payouts, there are only two ways to proceed: 1) file a US tax return and have the money they withheld returned to you, or 2) sue AirBnB for wrongfully withholding US taxes if they were not applicable to you.

AirBnB did not do what most legitimate organizations would do, and that is verify your tax status BEFORE withholding the tax. In my case, I work for an Icelandic company that has no tax or other presence in the US, not even a telephone number or post office box. No bank account either.

I contacted the IRS, and I was told the company had to file a US tax return to claim the funds. I said screw that.

I worked out an agreement where I will file this amount on a zero tax return in the US, and have the money returned to me, then I will return it to the company. The company in Iceland has already paid VAT and applicable income taxes on ALL AirBnB income here in Iceland, and the amount withheld in 2017 alone was several thousand dollars.

The reason the company is not filing a form 1120-F is because it would cost quite a bit for the company's accountant to create all the numbers needed for the form, and then they would have to pay a tax professional in the US to actually file the form. Like I said, screw that. Actually, I said something else, but proper decorum prevents me from stating exactly what I feel. 🙂

[Janie37]

Awesome!

Per the IRS Tax Law Department - Oct 30th, 2018

Form 1120-F is required for the reimbursement of Withholding Tax.

In order to file that form, you require a Federal Employer Identification Number (FEIN) which you apply for using form SS-4 Form (Application of EIN - available on the IRS website)

This form will request information such as where the entity was formed, what type of entity it is, and the reason for the application (Withholding regulation).

If you are an officer of the entity, you can receive your FEIN faster (by phone) by calling (267) 941-1000 (international call center phone) xt 4 xt 4.

Good luck everyone!

[Jay18]

@Janie37 For those listening on this thread, for 1120-F is only for foreign corporations. If you are instead an individual that AirBnB erroneously subjected to US tax withholding, you will first need to obtain an individual taxpayer identification number (ITIN) using form W-7. Once you have that, I believe the proper form to file is 1040NR or 1040NR-EZ. No idea which would fo these forms would apply; however, one thing is certain: AirBnB is 100% to blame for this mess.

[Kyle216]

Yes that's right!

It just so happens that I already had a US ITIN so the EIN application was done in 5min over the phone.