Hotel/PST taxes in BC - Canada?

[Dave264]

Hi there - just setting up my airbnb here and a little confused about the collection of taxes.  I know many people are collecting and are required in the US, but up here?  There is talk that airbnb will start collecting for us, but why?  According to this: https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-120-accommodation.pdf less than 4 units is tax exempt.  Am I missing something?

If that is the case, IS there a tax I should be collecting for BC?  Not clear where to find out if your community collects the MRDT.

[Dave264]

Seems official enough now!

https://www.airbnbcitizen.com/airbnb-begins-tax-collection-in-british-columbia/

[Siobhan48]

I’m sorry if this answer is in there, I can’t see it...What about reservations made prior to Oct 1? Will they charge the guest tax? That would not have been disclosed at the time of booking probably so how do we address that? 

Thanks

[Dave264]

Hi Sioban...to me, that is still a very grey area.  Government says if money has been collected prior to Oct 1, no tax is required.  Now that Airbnb is running the show, in theory, haven't they 'collected' the money?  Has the guest already had its visa charged and its in an Airbnb holding account?  Been a while since I went through guest routine so don't recall how quick it is.

That kinda says to me that tax isn't required but if you are sitting on a pile of bookings already, probably best to hit up that government email again and see if they can comment.  Last I had from government is that we would need to collect the tax, but that was when I was of the understanding that Airbnb would collect only by the end of year, so it is kind of a new scenario yet again.

[Matthew517]

Hey all. It looks like Airbnb is now collecting this tax on their platform. When I attempt to make a booking for a property in BC, they are now charging guests Occupancy Taxes and Fees.

[Andrea2286]

Hello everybody,

just started my suite in Victoria, BC. I started on VRBO and then decided to try Air BnB. I have had three different guests this week (January 2019) and from what I can see Air BnB is NOT collecting PST. The VRBO platform does collect tax and clearly marks this out. So when I plugged in a booking for the exact same dates in each site I saw that VRBO is charging the guests tax on top of their service charge. Air BnB only charged a very small service charge. I'm guessing this is why my bookings exploded after I posted on Air BnB.....it is cheaper than VRBO. They charge higher service charges but they are also handling the taxes. Air BnB doesn't appear to.

Any updates would be appreciated,

Andrea

[Dave264]

Hi Andrea, seems a little odd and the only thing I can think of is maybe Airbnb haven’t properly set up their taxes for any new Airbnb’s since October?  They have been collecting fine for us.  What is your listing and I’ll take a peak!  Does it show a tax field when you try to select dates?  Maybe what you didn’t notice was it’s collected but they keep it as they collect for us (ie, it won’t show for payout).  It also won’t be collected for bookings over over 28 days.  From what I see with vrbo, they allow you to collect it, but it’s your responsibility to file it...for that reason I never bothered with dual listing!

[Dave264]

Ahh whoops, could have looked at your profile!  I did a booking search and the tax is showing so you have nothing to worry about.  As said, you won’t see in your payout since they file to the government personally!  It’s a sweet thing that they took the initiative.  One note is u do seem pretty cheap so no surprise the bookings.  I’m sure you could get $10-15 more!

[Maryanne11]

Im on the Sunshine Coast  BC and still not completely clear if Airb&B collects the PDF  8% , plus up to 3% municipal and regional district tax (if necessary).   Im taking in bookings for July and I dont see anywhere on the confirmations from Airb&b that the PDF tax will be charge or  collected. How do the guest know about this tax. Does Airb&b collect and do they remit.  Or should I be contacting the local municipality.  Anyone have some insight.

[Dave264]

Maryanne - its all covered by them - it will show up to the guest as 'occupancy taxes and fees' - not part of our payout from Airbnb - its based on 11% even though some are 2% MRDT...guess was just easier to take the max.  They will remit lump sum for all airbnb hosts.  Only thing that would be your responsibility would be the GST if you make over the $30k rolling in 4 Q's (and I'd love a concrete answer by anyone if they know whether CRA looks at your cleaning fees (which has to be claimed as revenue, then dedcuted) as part of that 30k calculation as well.  That's the only part I'm left scratching head about!

[Danielle680]

Hi Dave!

Thank you for all this info that you have been providing. I am new to all of this air bnb stuff! Im not sure if you can help? Im a bit confused.... I am not the owner but manage the proporty. We only rent out for the summer, but are over $30k. Does airbnb collect all the taxes? I have already booked the clints in how would I  collect the GST. How much is the GST? ahhhhh im so confused and so bad at all of this!! So far this year we are only renting for the months of July and August. I have been told I do NOT need to collect anything as airbnb collects the 11% and I am suppost to calim all income minus expenses. Feeling stressed as I have already done all my books for the summer! Any help much apprecaiated thank you!!!

[Dave264]

Hi Danielle...no fun huh?  Thats why I tightrope under the 30k (currently 29992...lol)

Airbnb only collects the PST/MRDT, it is up to you to collect the GST (5%).  You would have to collect GST from the point that the income exceeds $30k (including cleaning fees) - any of your booking beyond that you will then be required to collect.  That is where it gets really tricky to me - I mean, what if someone booked for August several months ago while you were below 30k?  In CRA eyes, you have not collected the fees, therefore, they are not on the books at time of booking, they are on the books once they arrive.  That means you will be required to send a note to them saying 'sorry, we are now over $30k and are required by the government to collect an additional 5% upon your arrival' - insert sour taste in mouth & bad review here!

Best solution to be honest - the owner eats the GST for bookings already in place, you hurry and change the ad to state front and center that an additional 5% will be required on arrival since Airbnb does not provide option to collect this in their fields.  Suffer with the hell of sorting who post 30k is owner pay, who is not!

Thus...I tightrope 30k and just block off the calendar until rolling months give me more room (which for me isn't until August...lol)

Best of luck!

[JustinandJeanette0]

Does anyone know of AirBnB will be sending out any statement identifying how much money has been collected for taxes? So when I file this as income I won’t have to pay tax that has already been collected. 

[Dave264]

you shouldn't need to know what Airbnb collected for taxes (at least the case in Canada) - your 'revenue'  to report for taxes is strictly daily rate + cleaning fees.  While here in Canada, they collect the PST/MRDT and there is nothing you have to do about that when it comes to filing, if you have to collect another country tax (ie, GST in our case if over $30000 in 4 quarters), then that is on you to collect from the guest, or pay it yourself based on your total revenue amount (not subtracted out of your revenue amount - they will nail you on audit if you do it that way).   Note also, the collection of PST/MRDT/state, whatever, is a country by country basis.  If your country doesn't have an agreement with Airbnb to collect, it will be on you to collect (based on that total revenue number).

Hope that makes sense.

[JustinandJeanette0]

Thanks Dave makes sense I’ll run it by my accountant.