New fee structure

[Carolyn-And-Stephen0]

This is absolutely a horrible decision on AirBnN’s part. It completely penalizes the host.  We have been hosting for over 10 years and a Superhost for the entire time.  I will be thinking hard about staying on with AirBnB bead on this policy change. It adversely affects the host too much.  Especially on the Income tax and Rooms& Meal Tax

[Shelley159]

Hi @Francesco602 

I can't fault you on your discussion above. If I understand correctly, hosts in Italy can deduct expenses (such as service fees) for tax if they're considered professional hosts, but I assume there are good reasons why many hosts don't want to register as professional hosts? It's probably not easy and straightforward, and I guess it may come with other disadvantages.

One point you make is about the guest not seeing the service fee anymore. Before the change, guests could also only see the total accommodation cost (including the service fee) when searching. But you're right that if they clicked through, they could see the Airbnb service fee as a line item, and that will no longer be there after the change.

I'm not sure how many guests used to pay attention to this line item, but @Elaine701 and @Mike-And-Jane0 tend to use examples along the following lines: someone who buys bread at a supermarket doesn't ask what portion of the bread's cost is made up of wheat, or someone who stays at an Airbnb doesn't ask how much the host pays for insurance and how that's absorbed into the rate per night.

So maybe it's also not very important how much the host pays for marketing (which is to a large extent what we pay Airbnb for)? Anyway, one could debate this and not all will agree, interesting topic!

[Francesco602]

Hello again, @Shelley159 . 

It's no mystery that Airbnb is favouring rental managers over individual hosts. There are many strategic and logistic advantages for a company to have fewer “clients” (we, as hosts, can be considered such) instead of multiple ones scattered around the world with their own individual problems, single requests and demands. 

That's why I don't understand the point of defending a company that, over the years, has clearly taken distance from the initial mission and just acts like every other company out there. Essentially, solely in the name of profit, efficiency, and standardisation; basically eroding the human value or layers that are part of the experience. 

They keep saying to care about hosts and guests, but it's all marketing. We are resources. 

Steering away from political views or discussions that might become too complicated for this community, I do still believe that's important for guests to see that there are additional fees associated to hosting.

It's true that, as @Elaine701 mentioned, "someone who buys bread at a supermarket doesn't ask what portion of the bread's cost is made up of wheat". However, I think that the examples are objectively a bit stretched. She's essentially comparing a commodity (something essential and low-priced) to something that's not (going on holiday, renting a listing). 

Regarding your other questions and observations:

I am not sure how much you're interested in going more in-depth about the Italian taxation system (believe me, you won't ) and the relative regulations, but summarizing the situation in a few points:

- Becoming a “professional host” has other obligations and expenses associated to it which, often, don't compensate for the taxation “benefits”. It generally becomes a practical option if you manage 2-3+ listings and your income is accordingly higher. 

- The above, if I correctly recall, is incompatible if you work in the public sector, or have specific jobs / sources of incomes. 

- You can never deduct platform's expenses (i.e., Airbnb) because Italian legislation is quite clear: you pay taxes on the gross accommodation cost, always. You can deduct other expenses (i.e., cleaning, maintenance and so on), but only after 5 years of professional hosting. 

So, long story short: for most individual hosts, this is not a viable option. 

Does Airbnb know that? Certainly. 
Do they care about that? I doubt.

[Shelley159]

Yes the tax system seems very different from mine @Francesco602 , thank you for the information!

I do sympathise with the ordinary individuals working at Airbnb who have to implement the fee structure change. There's so much anger and it can't be easy.

In your case your concerns are valid - you're taxed on gross income and gross income increases due to the change. It's not Airbnb that's taking more from you, but in your tax system you're worse off overall.

But there's also a lot of misinformation and misunderstanding from hosts who think "Airbnb increased fees from 3% to 15.5%" and so on. The reality is that many aren't negatively impacted due to being taxed on net income, but they assume that Airbnb is taking significantly more money from them and/or their guests.

[Francesco602]

Hello again @Shelley159 .

Yes, I confirm that taxation systems are substantially different across countries. Let's just say that they're different for now, suspending judgment on what's "good, bad, wrong, or right"; otherwise we risk entering political territory which, I am sure, wouldn't be appropriate for this community.

I understand, and I agree, that there's misinformation and misunderstanding about the aforementioned increase. 

The only part that I struggle to understand from your message is your mention of “individuals working at Airbnb who have to implement the fee structure change”. 
Technically, and I may be wrong, this won't be a “human-task” as it's just run by a machine. 

On the other hand, if you're referring to customer agents having to deal with anger, requests, and clarifications from hosts... well that's another story.

[Shell1094]

I wonder if we should put how much Airbnb fee is in our listing description so that the guest knows that the host isn't keeping it all. I do like the transparency of seeing the fees and taxes as a traveler so I'm surprised to see it being removed. 

[Shelley159]

Hi @Shell1094 

I wouldn't, it creates the impression that there's been a fee increase.

If you ordered food on an app, wouldn't it be a bit weird if your favourite restaurant suddenly added a banner "keep in mind that the app takes 30%"? Especially if the price you paid stayed the same as before (as it does with the Airbnb service fee change). It would make you wonder what's going on, when everything is actually the same for the customer.

[Shell1094]

I see your point. Do you see my point that transparency is expected, well, it is by travelers like me who look at the breakdown of costs. I didn't like the cleaning fee being hidden either, and now this is more secrecy. I would love the option to show the guest where the money is going. What is your suggestion for the traveler who does want to know how much is going to the host?

[Shelley159]

There's nothing preventing you from disclosing the fee percentage in your listing@Shell1094 . The main risk I see is that some guests may interpret it as an invitation to try to get hold of you to book directly at lower rates. But it's up to you if you feel the information should be there.

In my case, if a  future guest was specifically interested in what percentage Airbnb takes from me, I'd just assume they'd be inclined to Google it

So I wouldn't put references to service fees my listings.

[Shell1094]

I think I just can't understand why the cost would be hidden.... I know that you mentioned it is to simplify. Taxes and fees are almost always separate when you book a hotel. You get the base rate like 200/night and then you pay the tax/fees. Why not keep it that way? What benefit is there to hide it? Is there a value added to change it? I think this is why there is push back; the value added does not appear to be enough to make a change. Thanks!

[Shelley159]

From what I've seen, hotels don't specifically show booking platform costs @Shell1094 ?

If booked through Booking.com (which is big on hotels) the service fee works the same as Airbnb's new single fee.

If booked on the hotel chain's own website, there's no 3rd party service fee to show (the chain's website expenses aren't disclosed to guests).

The single fee really is simpler, but I agree the simplification may help Airbnb even more than it helps smaller hosts (running 2 systems probably caused a lot of issues). And there may be other, bigger reasons (competing with other platforms, perhaps?) that we just don't know.

[Elaine701]

@Francesco602 

We don't have the same unethical tax system here in Spain as you claim to have in Italy. We are taxed on our earnings, not everybody else's. 

Our earnings typically are roughly 50% of what the guest pays. Everything else is someone else's income (various taxes such as VAT and property taxes,  and our suppliers' fees and VAT charged in that,  who also pay taxes on the income they receive from us).  

If we had to pay tax on all of our taxes and suppliers' incomes in addition to our own, we'd probably be forced to shut the business down. 

For that reason, as I've suggested many times before, perhaps it would be wise to start demanding an explanation from your tax authorities regarding your obligation to pay taxes on taxes such as VAT, in addition to paying taxes on others' incomes,who also pay taxes on that same money. That's double, even triple taxation. 

I can't imagine that's even legal for them to demand that. I would expect the Italian courts to be inundated with lawsuits over this.

You might want to check that out. 

[Francesco602]

Okay @Elaine701 , 

Thanks for clarifying about the situation in Spain. I was reporting what I had previously read in this community. Thanks for the correction.

As I have explained in other posts, the reasoning behind our taxation system is that you have to pay taxes on the accommodation / listing rent price. This, essentially, corresponds to the price you decide to "sell" your space to a tourist, equivalent to the gross accommodation costs shown on Airbnb or on other booking platforms.

The reason behind this is that you can't deduct expenses from the taxable income and Airbnb, in this case, is considered as an activity-related expense (it's a service that you pay to make your listing visible). 

While I would be more than happy not to pay taxes on the Airbnb service fees, I have reasons to believe that the logics behind our system, from a purely theoretical standpoint, makes more sense; otherwise we should also be asking to pay taxes on our net profit before taxes, which would correspond to our payout minus all the associated expenses (bills, materials, cleaning, and so on...).

In short, what the point I am raising is: If, according to law, I can't deduct expenses, it makes sense to pay taxes also on Airbnb's fees for the same reason I don't deduct from my taxes the energy bills, rubbish tax, others. 

You're saying that this is incorrect because Airbnb already pays taxes (I hope they do, despite we all know they register the company elsewhere to take advantage of tax-related advantages), but the same applies to also energy bills company, cleaning services, others.

You're also suggesting to take action, but in material terms that's a bit more difficult to do in practice; especially as individuals. 

[Elaine701]

@Francesco602 

Thanks for that detailed explanation. 

But the fact remains that you are paying taxes not only on others' incomes (your laundry service surely pays taxes on their income, no?) but you're also paying taxes on taxes.

Not only the VAT that your suppliers are required to charge you, but you pay things like property taxes, yes? Is this not an operating expense? But you're paying tax on that tax. 

How can that be remotely ethical, let alone legal?

Or is there something we're both missing here?

[Francesco602]

@Elaine701 

I think the confusion is arising from the fact that Airbnb acts as an intermediary, being the one who pays the host. 

Imagine this scenario:
- The guest pays directly to the host an amount corresponding to the gross accommodation cost.

- The host pays a separate amount to Airbnb for creating the connection between host and guest.

For example: 

- I receive 100€ in cash from the guest.

- I pay 15€ separately to Airbnb through digital payment for the service.

- I pay an additional: 10€ for (internet, electricity, gas), 5€ (cleaning), 10€ (waste, property tax).

In this case, Airbnb's services are expenses that I cannot deduct from the taxable amount

Otherwise, I should also ask the tax authorities to pay income taxes on 100€ - 15€ - 25€ = 60€.

I am not sure if what I am saying makes sense if we see things as above. 

What I am just trying to say is that Airbnb fees (despite they're called as such) are NOT taxes. They're expenses. Airbnb is not an authority. It's just a private company offering a service. 

[Elaine701]

@Francesco602 

Ok. I get it

But it's still Airbnb's income, not yours. And the VAT they charge on top is also NOT YOUR INCOME. You never even receive that money. Yet you pay tax on it. And the VAT they charge on top. You're paying tax on that too. 

It's the very same thing as internet, electricity, gas, cleaning, waste, property tax... etc.

They all are expenses you incur in the process of conducting your business. It's their income, not yours. You don't have the benefit of that income, because it's not yours. That money goes to them. But you still pay tax on it.

You had me convinced a long time ago; The Italian tax system forces you to pay tax on others'  income. 

But how is that Airbnb's fault? And why should they remedy it for you? Nobody else does. It's not their problem. It's yours .

Unless of course, there's an important little bit of information that we are missing?

For example, maybe a missing bit of information could be that you only pay 5% on this "special" Italian tax system that taxes you on the gross, which means you'd be paying peanuts anyway, so the whole point would be rather moot.

You know, something like that little bit of info missing, perhaps?