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

Jay18
Level 5
Borgarnes, Iceland

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

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.

87 Replies 87
Craig229
Level 2
London, United Kingdom

Jay,  I have a BVI company that owns a property .  I agree, the three forms they provided do not apply.  How did you get on?  Which forms did you fill out in the end?


 


 

Maybe they should rename themselves ErrBnB? 😉

 

A few months ago, I see that AirBnB added a section to accept company information. Finally. Unfortunately, that did not help with the tax issues caused by AirBnB.

 

After communicating with the IRS and exploring my options, I decided to fill out form W9 on the AirBnB site. My reasons included the major expense of filling out a Form 1120F.

 

By my estimates, for our accountant to provide the figures needed on Form 1120F, and a US accountant to complete and submit a form 1120F, we were looking at about $2,500 or more. Not worth it.

 

It seems AirBnB did not have a clue about how to handle the financial matters of hosts all over the world, so they based pretty much everything on US taxes and possibly laws. If you think about it, it sort of makes sense.

 

AirBnB holds ALL the cards. They have all the host's money, so they can choose how little or how much to pay out. If AirBnB, even incorrectly, does something "wrong", what recourse do hosts really have?

 

The best action hosts can take is to remove their properties from AirBnB. While that may not be an option for some, it was for us. We have deleted about 50% of our listings from AirBnB, and removing more later this year.

 

I wish there were further actions hosts could take, but there are few options unless hosts get together as a class and challenge AirBnB legally. That would be interesting.

airbnb withhold my tax and it has been 8 months still won't release it.

everytime i called, they just b**t**bleep** me saying they are working on it.

they said they will call me back, and they never did.

Meanwhile, IRS is charging me 5% each month and now it is going to go to collection.

I need help, how do I take legal action against airbnb?

 

@Hilda5 Let's make sure we are clear on a couple of points.

 

First, I am *not* condoning AirBnB's practices or actions in these cases; in fact, there are reprehensible. However, since they hold all the cards (and money), we either have to go along with their ways, or find another hosting platform.

 

Second, once AirBnB withheld this money, AirBnB has turned it over to the IRS at some point. If it turns out they did not, then you should consult a lawyer to discuss possible legal options. But I am betting they turned over the amount withheld to the IRS.

 

To attempt to get the money AirBnB withheld from you returned to you, you must file a tax return in the United States. Regardless of whether you have any presence in the US or not, this is what you will have to do. The other option is to sue AirBnB, perhaps claiming that they did not have the proper authorization to withhold the money in the first place.

 

I might be interested in joining that case, as many others seem to be ready and willing to do also. In our case, we are a company with a business located in Iceland, own, manage or co-manage four properties, all in Iceland, and are contracted with and paid by AirBnB in Ireland. No connection to the US whatsoever.

 

We did notice that since we have been fighting AirBnB over this matter, they seem to have changed their practices in that they now allow the registration of a company, as opposed to only an individual, as the owner of an AirBnB account. But since they withheld the tax, there is nothing they can do about simply giving the withheld funds back to you, unless of course a lawsuit is successful. Good luck!

Thank You Jay,

I filed tax, but airbnb still holding my tax withold and won't release it. I called them again on 8/1, they said they will have the finance department call me, they never did. ( Just like last time)

I also called the IRS to address the issue, and now I am looking for a local atterney, will keep you on the loop.

 

@Hilda5 Filing your tax return is completely different that what you need to do with AirBnB. It looks like AirBnB took the easiest way out (for them) and assumed *everyone* is subject to US taxes. You need to fill out one of the tax forms on the AirBnB site. Even then, you might still be subject to US tax based on the information provided. In theory, completing one of the three tax forms on the AirBnB site *should* stop them from withholding additional tax. No guarantees, though, since your situation might still require them to withhold some amount. In any case, filing a US tax return will allow you to get some or all of that money back. Again, once AirBnB has withheld it, and paid it to the IRS, then they cannot simply undo that and give it back to you.

@Jay18 Airbnb customer services is such a joke.

I have been contacting them regarding my 1099 tax form, they never sent it, so eventually I had to file my tax with a print out of my totally paid on Airbnb website and that's when I found out that Airbnb release my tax withold money to IRS and refuse to send it back to me.

I have been calling Airbnb customer services request my tax money back, and each time I had to explain the same thing again and again.

After 8 months of calling and waiting and insisting it is URGENT that I need to know whether they will send my tax money to IRS or back to me, so I can paid IRS.

Well, turned out they never listened, after 8 months of trying and fighting they finally sent me the 1099 form that i should have gotten 8 months ago, it is 8 months too late and still not mentioning a word of my tax money....what a joke.

I am guessing it will take another 8 months to get my tax money back....

@Hilda5 While having a 1099 form is more convenient than having to do your taxes with data printed out from a website, having a form 1099 in your hand is not a requirement to file your taxes.

 

If I were to use the data from AirBnB's site, I would print the entire captured pages, rather than simply rely on the totals provided by AirBnB. That way, should there be any changes on the AirBnB site—and I put absolutely *nothing* past them at this point—you have proof of what the site did show when you obtained the data.

 

As I mentioned previously, once a company has withheld taxes like this, they cannot "refund" them to you. They will always be paid to the IRS, and you will have to file a tax return to recover them.

 

Good luck!

Please write me I’m in Mexico and the same issue 

I recently changed my phone # to be US based, because I'm traveling through the US right now. Can that be the reason?

That's silly then!

I searched previously ( a couple of months ago) when AirBnB started this BS, and I found on a tax attorney's site very detailed information that stated that one was not subject to US tax simply because one had a US telephone number and/or a US bank account. That makes sense, because having a telephone number in more than one country would otherwise make one liable for taxes in that country? Not true. I am thinking a class-action lawsuit might get their attention.

Hi Sabina,

 

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!

Marit-Anne0
Level 10
Bergen, Norway

@Jay18

It is fully possible that when you list in the US you are liable for income tax to the US. 

You are also liable for incomcountry of e tax in your country of residence for any income outside of your country of residence. Between most "civilized" countries there is a tax agreement, allowing you to deduct whatever amount liable abroad to be deducted to your country of residence tax return. 

There is such agreement between Norway and the US, so it is very likely there is one between UK and US.  I believe you may find information on the matter on-line. Still unclear, contact your tax office.

@Marit-Anne0 The company I work for owns a B&B, and sublets two apartments for part of the year. All three locations are in Iceland, and the company holds valid licenses for all three rental properties. All income is reported here every two months for VAT purposes, and then annually as part of a yearly tax return. The company has no presence of any type outside of Iceland. AirBnB seems to have claimed the company is liable for US taxes without providing any justification or proof of why they think so except to basically say 'because we did'. The company has no obligation to pay US taxes. Period.

Hi Jay, 

Thank you so much for great contributions here for helping!

I received 1042-S from bnb. I has a listing in US but I am a Canadian. The amount of 1042 is more than the actual income I got from bnb gross income proof. Means I should pay more than I should pay. BnB withheld a small amount then stopped withholding until I provid my tax ID information. Should I file 1040NR to pay rest 30% of bnb income? Can I deduct any expence for the hosting? For my understanding is that airbnb sgould take responsebitiles to collect the tax for IRS, am I right? Btw, Airbnb refused to correct the wrong amount of 1042. Means I will pay more I should pay if I file 1042. Any ideas? 

Millions Thanks!

Alice