Air bnb taxes-GST, PST, MRDT

[Sam4794]

Morning,

Experts and fellows,

After running Airbnb a few years, I incorporated it in BC. 

Questions:

1. Airbnb platform collects taxes, but have they covered 5% GST,  8% provincial sales tax (PST), and  3% municipal and regional district tax (MRDT)?

2. Any guidelines, articles, links, or advice to share, for the hosts to collect the above-mentioned, if some types of taxes are actually hosts' responsibility?

Thanks in advance!

[Emiel1]

@Sam4794 

Maybe this helps:

https://www.airbnb.com/help/article/2283/tax-collection-and-remittance-by-airbnb-in-canada

Your listing shows Airbnb collects now (total 11%) for stays upto 26 nights:

(British Columbia) (Can - Vancouver Hotel)

(no idea what it means....)

Taxes which are not collected /remitted by Airbnb can be added in the tax section of your listing:

https://www.airbnb.com/help/article/2523/how-to-add-taxes-to-listings

[Sam4794]

@Emiel1 , Level 10

Thanks for your links to my questions, and I just messaged to Help Center for further clarification.

But I have some questions for you, if you don't mind:

1, Looking at your name with suffix 1, does it suggest you be the No.1 host since very beginning when Airbnb was established?

2, Must Level 10 be the highest one?

3, Must there be some achievements attached to it?

4, Any links to classification of host's levels?

Thanks in advance!

[Sybe]

Hi @Sam4794 ! Perhaps I can chime in here. 😃

The numbers you see as suffixes in usernames are added automatically when you join the Community Center. It takes the name you have on your Airbnb profile, and adds a number based on the amount of people with the same name. 

The levels you see on profiles are purely for the Community Center as well. @Emiel1  always helps lots of people on the CC (a very welcome sight!) so he is already the highest level. You can increase your level by posting, replying, giving kudos, answering questions, marking answers as 'Most Helpful', etc. 

[Sam4794]

Hi Sybe & Emiel1 ,

Yes, each and every answer here in the community helps me a lot!

To continue the topic with Emiel1, today I found a link

Why Airbnb is requesting your Canadian GST info – Airbnb Help Centre

and with two questions below:

Hosts

Airbnb encourages you to provide your GST, HST, and/or QST IDs and to review your pricing.

If you don’t provide your GST, HST, and/or QST IDs, Airbnb will charge these taxes on top of your nightly base price for any listing located in Canada.

--will this mean the guests be charged once only?

If you’ve already accounted for GST, HST, and/or QST and have included them in your base price, it will result in higher pricing of your stays.

--will this higher pricing mean the guests be charged twice: one from the hosts who have included the taxes in base price, plus Airbnb will charge these taxes on top of your nightly base price?

Need to register? Here’s how for your GST, HST, and/or QST.

Thanks for your tips.

[Sybe]

Hi @Sam4794 !

Since these questions seem to be specific for Canada, perhaps @M199 could give us some answers. 🙏

You could also try one of the local Host Clubs in your area. You can find them here:

https://community.withairbnb.com/t5/Get-Local/ct-p/en_clubs

I hope that helps! 🙂

[Claire1975]

Please note that when GST is charged is needs to be separated and specified to the guest. Also note that GST should be charged on all short term stays which is defined by CRA as 30 days or less. All stays that are over 30 days should not be charged GST which appears to have been done correctly. The problem is that the taxes are being lumped together in Occupancy Tax and this is not sufficiently broken out for the people being charged the tax and for CRA. If it is not specified on the receipt/invoice CRA does not deem the GST to have been charged. Airbnb - how do you proposed we correct this?

[Albert1877]

I am glad to see that I am not the only one struggling with this problem and ABB.   I have been trying to explain to ABB support that their taxation setup need to be corrected.  Our listing is in Quebec so there is Lodging Tax, GST and QST.   Providing ABB with your taxation number means they will not collect the tax and remit it to you.  But I have found, at least here in Quebec, that if you do not register they still are not collecting the GST and QST.  After getting the run-around and the absurd suggestion to use the Resolution Center to collect the taxes I am resigned that I have to include the taxes in my pricing. I resolve the problem of providing the tax information to the guest by proving a separate invoice which will show the tax breakout.

Unfortunately, this also means the 3.5% Quebec lodging tax is being calculated on top of the tax that I must add to the nightly price.

None of these solutions are in keeping with the taxation rules here in Canada.

Wake up Airbnb before you get fined after the right person complains to Revenue Canada.

[Lee4141]

Hi @Sam4794 .

Do you know where we might find the amounts of GST that Airbnb have submitted to CRA on our behalf, prior to me actually adding my GST number?

Thank you.

[M199]

Hi @Sam4794 , 

Disclaimer, I am not licensed to provide specific information or advice.  The below is general knowledge that can be found on the CRA website.  BTW all taxes are ultimately the hosts responsibility as they are providing the service.  Airbnb is only a tool to market and collect guest payments.

So you know, GST/HST is setup on the federal level and then flows down to the provinces.

You can set up your tax accounts on your listing and add your tax id's if you have them. You then have the option (a checkbox) that tells Airbnb that you agree to file directly to CRA. I am presuming that is needed so that your guests are not charged twice.

One thing about GST/HST is that once you earn $30,000 in a year, suppliers (you) are required by law to deduct and remit these taxes. As well, you will be able to claim the input tax credit, that's where you likely need an accountant.  

If your sales are over, $7,500 per year and under $30,000 you may voluntarily deduct and remit.  The reason for this is that allows you to claim the input tax credits.

Municipal Accommodation Taxes (MAT) are the new rage in a lot of municipalities as a way to gain tax dollars from tourists.  In the case of South Bruce Peninsula for example, as of Jan 1, 2022 all STR's are required by by-law to be registered and approved with the city.  STR's are then required to deduct and remit 4% of the room rate.  Each municipality does things in their own way.

Truly, if you are not sure, you would be well advised to contact a tax accountant as there are many implications with regards to collecting, remitting, year-end reporting. 

I hope this information helps.

Best of luck, whatever you decide.

@Sybe , @Emiel1 

Hope this gives you some insight.

[Sam4794]

Hi @M199 ,

Thanks for your response!

"all taxes are ultimately the hosts responsibility as they are providing the service.  Airbnb is only a tool to market and collect guest payments."

--I just want to identify a host's mandatory and voluntary tax responsibility, trying not to overlap / repeat ours with Airbnb's, and not to add unnecessary cost on guests.

There are 4 questions for you:

1, As per the following link and citations:

Why Airbnb is requesting your Canadian GST info – Airbnb Help Centre

Hosts

Airbnb encourages you to provide your GST, HST, and/or QST IDs and to review your pricing.

If you don’t provide your GST, HST, and/or QST IDs, Airbnb will charge these taxes on top of your nightly base price for any listing located in Canada.

1.1 will this mean the guests are charged once only?

If you’ve already accounted for GST, HST, and/or QST and have included them in your base price, it will result in higher pricing of your stays.

1.2 will this "higher pricing" mean the guests are charged twice: one from the hosts who have included the taxes in base price, plus Airbnb will charge these taxes on top of nightly base price?

2, What subarea are you living in, if you don't mind?

3,  I'm living in Killarney,  Vancouver East, are there any Host Club Facebook groups in my area or in the vicinity?

Thanks a lot!

@Sybe 

[M199]

@Sam4794 

To my understanding is that if a host has "built" GST/HST and other taxes into their base price, then Airbnb has no way knowing this and recording the taxes as a separate line entry for the host to remit.  For example, if a GST/HST and other tax account numbers are registered on the hosts account but there is no % of tax entered in the taxes section, then it would appear that the taxes were not deducted.  Which could be appropriate if the host doesn't earn $30,000.  However, that would still require the host to file $0.00 annual returns.  A pain, but it's once a year.

Scenario #2 is that that host registers tax account numbers and sets up the appropriate tax %'s. Airbnb then adds these to the guest booking and remits to the host, if that is the option selected. (Otherwise, the host can have Airbnb remit directly to CRA).

I prefer to receive the funds and make remittances directly so that I can reconcile and remit correctly.  I do not trust that Airbnb will be accurate, especially if the host sets up the taxes incorrectly. For example, I was helping a another host set up a spreadsheet to manage the remittance.  In the process we discovered that the taxeswere incorrectly setup.  The GST/HST was set up for room rate only.  The municipal tax was set up for all services.  These 2 set ups were reversed.

This is why I suggest that Canadian hosts contact a professional such as a tax accountant or lawyer.  There is a huge potential for fines, penalties and interest charges from CRA (Canada Revenue Agency).

I am located on the South Bruce Peninsula northwest or Toronto.  If it helps, you can always click on a guest or host profile to get more information, such as host listings or guest review.  As well, to contact another host privately, you can do so on their profile page.  Click "send message".

With regards to Facebook, sorry can't help you there!  Not on it, tried once for a week and got almost hacked, despite every security setting set in high.

[Neill23]

Hi @M199 - thank you for your post.  Can you clarify:

"Scenario #2 is that that host registers tax account numbers and sets up the appropriate tax %'s. Airbnb then adds these to the guest booking and remits to the host, if that is the option selected. (Otherwise, the host can have Airbnb remit directly to CRA)."

Is ABB going to add a separate line/bump up the tax percentage calculation once a GST number gets added?  I cannot find any documentation that suggests one versus the other.  Eg, our seasonal rental is $688 per night. 
Will ABB
1)  take our current tax amount of 11% (BC PST and MRDT) and bump it to 16%, and send us the GST as your post indicates? If you have a link that documents this, I would be grateful if you could share it.
2)  add a separate GST line to the calculation (as I think about this option, I doubt it, as they would have to re-jig the entire platform for this for lil ol' Canada)
3)  Assume that our 688 includes the GST and leave everything as is - in which case we will need to either eat the 5% or bump our prices accordingly.

If we don't add our GST number to our account, i can see ABB bumping the tax amount collected and remitting the 5% directly to the CRA themselves.



Thank you.

[Joanne455]

Hello M199,

I too am registered to collect and remit GST and have been for a couple of years.  I had difficulty understanding the notification from Airbnb when they informed us that effective July 1, 2022, they would be collecting and remitting for us.  Because I too, prefer to continue to collect and remit on my own: due to the assurance of accuracy;  as well as have the ability to continue to claim the ITCs.  I did what they said, and made sure that my BIN number was on my account.  Was hoping that would be enough for things to continue they way they were.  Today, was my first reservation in July.  I, of course, looked closely at the reservation payout.  I noticed that I am continuing to be paid the GST so I can remit on my own, which is a relief.  However, I also noticed this occupancy tax of .7% that the guest had to pay.  IDK, maybe its completely unrelated and simply a new tax starting now that Airbnb is simply charging, or maybe its related to the GST thing which then tells me its gone glitchy.  Of course, you can never get answers anymore from Airbnb, help/accurate information expired in the early covid days.  I am wondering, with you in the same situation, of collecting and remitting GST on your own, have you seen any change to your payout information on the reservation starting this month.  Thanks so very much.

Joanne

[Glenda142]

So if I do not have a tax number as I don’t make $30 g do I have to get a tax number just to please Airbnb. How do we know if they are already charging this.

this makes me have to hire a bookkeeper now. That’s a lot of xtra $$ to charge guests to cover this esp when just a small Bnb.A lot of paperwork.

can we not bypass this if we don’t make enough?