Tax obligations for Airbnb hosts in the Philippines

David1747
Level 7
San Mateo, Philippines

Tax obligations for Airbnb hosts in the Philippines

My wife and I have been hosting through Airbnb since the beginning of the year and we have been trying to find out what our tax obligations are. We have been getting conflicting information. Barangay officials and City Hall officials have no idea what Airbnb is, so they've not been helpful. They just refer us to the BIR, but the officials in our local BIR office have never heard of Airbnb either, so the only advice we've got is that "maybe" we should be paying the 3% percentage tax that applies to small businesses who are not big enough to apply for VAT registration. But we don't consider ourselves to be running a business. We are just retirees looking to meet people and earn some supplementary income to help pay our bills. And we can't register with BIR unless we have a business name.

 

So I've been doing some research online and all I have been able to find out so far is that if you are renting out an apartment or house in which you don't live, then it should be registered as a business (either sole trader or corporate) and you need to apply for business name registration, barangay permit, mayor's permit and BIR registration and then pay income tax (personal or corporate) based on your income less allowable deductions. So that part is clear.

 

What is not clear is the tax obligations of people like ourselves who are living in a house or condo and just renting out one or two rooms. Back in 2015, the 

Philippine Hotel Owners Association (PHOA) lobbied the Department of Tourism (DOT) to apply an occupancy tax on Airbnb hosts because they felt Airbnb places were unfair competition for hotels. The DOT has acknowledged the PHOA's concerns and has said that their present thinking is leaning towards regulating listed host establishments on Airbnb, but it does not appear that any decision has been taken on this yet. Specifically, Maria Rica C. Bueno, Director, Office of Tourism Standards & Regulations, Department of Tourism said: “At this point in time we don’t have a policy or a program yet, on how to address Airbnb. While we are in the process of processing and developing accommodation standards, we will get insights from the industry and our consultants on how we will address this issue."

 

Does anyone have any other updates on this, because that quote was from 2015, and I can't find any references to any decisions that may have been taken in relation to the tax obligations of Airbnb hosts in the Philippines in the past three years?

41 Replies 41
David1747
Level 7
San Mateo, Philippines

@Reese12 Thanks for that link. The interesting sentence in that is "In the Philippines, however, the Department of Tourism (DOT) has yet to impose an accreditation system for Airbnb operators, as the industry is still very small."  If we have to pay for accreditation, and an occupancy tax on top of that, it is highly likely that will be the point where I discontinue using the Airbnb platform, because I'm sure the mayor and barangay officials are going to want their cuts too!

Hello Mr. David. I am currently having the sad situation where some nearby hotels complained about my airbnb and now the local government is telling me that I need all the legal permits. This is a single house which we divided into 2 sections for airbnb and for us everytime we are in town. Our side is always mostly vacant unless we are there, but the other side rents very often on airbnb. As you said before, since we also occupy the house, no need to register it. however, the municipality inspected and since we were not present at the time, only some airbnb guests in the other side, they automatically are forcing us to get permits (explanation is useless) unfortunately to obtain all the required clearances and permits, the house would need to be transform on a way that it satisfy all regulations as a hotel, yet, is only a house. 

 

I would really appreciate your advice or thoughts.

Lance118
Level 1
Portland, OR

Taxation=Theft.  Dude, if you are not causing a ruckus, no reason for the gov't to know you are renting it out, more than likely it is all done online and in USD outside of the country, personally I would not go to the gov't asking how I can pay tax.  My two Pesos. peace from China.

Hi David, I was wondering how your issues with the sub division administration concluded? I have a similar experience, the sub division allege that we are operating a commercial business in a private residential only zone and are insistent that we cease. So far, all they have done is instruct the guards to only allow our guests in if they can show written evidence of who has invited them and provide an I'd copy. I feel this is however the tip of the iceberg. Appreciate your advice. Regards.

Lucky26
Level 2
Taguig, Philippines

Hi Guys, I just want to share my experience regarding Tax Obligation in the Philippines to our fellow hosts. I've been renting out our 2 units 1-bedroom residential apartment in Anilao, Mabini, Batangas for more than 1 year now. Prior to the start of my hosting in Airbnb, I tried to look for an answer regarding any permit or license to Rent Out our Apartment on a daily basis but couldn't find one. I just heard from my network that if you have more than 5 rooms to be rented out then you should declare it as a Business and all the licenses and permits should be done. As of now, the nearby Beach Resorts in our area are still not complaining to the LGU regarding our Apartment Rent Out but they are complaining to our Caretaker that our Rates our way to low compared to them which is normal because we are not a resort and the location of our apartment is in the middle of a Residential Area. I only found one link from the Department of Tourism on how to have an accreditation to them. http://accreditationonline.tourism.gov.ph/Downloadables/Standards/AccommodationEstablishments.pdf

Noe26
Level 2
Manila, Philippines

Hi @Lucky26 ! 

 

I would love to hear your experience or insight about the DOT accreditation and any tax implications it might have.  

 

Thank you in advance for sharing! 

Hi, we have also received an email from Airbnb regarding this DOT accreditation, has anyone been able to do it and how does it work?  Is it actually required and what are the potential tax implications?

Hi Jennie, did you ever get the DOT accreditation? I am just starting out on listing a property. I wonder if this is needed/necessary? Thank you!

Helen2493
Level 1
Pasig, Philippines

David thanks so much for initiating this post. In 2019, I received a letter from BIR requesting to declare my rent taxes on my former condo in Shaw, Pasig. Then COVID happened and it wasn't followed through then I sold that property and wasn't bothered by BIR ever again. I checked this with a lawyer and the literature she quoted was on Rental Properties. Sorry this was way back in 2019 so can't remember the details--I'm away from home in the UK as well. What I remember was that you are not obligated to pay taxes if: 1) you don't exceed X income per year; 2) the property is under mortgage with bank; and 3) you are renting out bedrooms therefore the activity is non-residential. My situation then was under Point 2, then sold the condo so I left it that. I am currently managing an Airbnb in Acacia Estates, Taguig and haven't received any from BIR. My lawyer advised better to wait for a letter then respond, usually they'll give you 2-3 notices in 2 years. I'm not saying evade the notice, but like you said there's so much gray area on this that BIR can't clearly define where Airbnb sits. 

Has anyone else received this email from discover@airbnb.com in the last month or so? Screenshot_20211031-095551_Yahoo Mail.jpg

Salie0
Level 2
Sta. Rosa, Philippines

yes I also received this reminder but I keep on checking for Internal Revenue regulation specifically for this but I cannot find any. 

 

hope to get updates on this.

Anie13432
Level 2
Philippines

I think the issue of the DOT/tax from this discussion were not clear, had the same question in every group, but no one answered clearly. Maybe now,  host on your own risk or register in BIR or DOT whatever it is...Probably going back home now to manila to check on this, haiisssttt, i only had 1 listing in airbnb and im not sure if its worth to go back or just sell the property...