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In world first, AirBnB to report income directly to Danish authorities

Danish tax officials and the international home rental site Airbnb have announced an agreement that will ensure that short-term rental income in Denmark will be automatically reported to the authorities.

Published: 18 May 2018 03:10 CEST
Updated: 18 May 2018 21:10 CEST
In world first, AirBnB to report income directly to Danish authorities
Airbnb will build a solution into its online platform to directly report income to Skat. Photo: Ólafur Steinar Gestsson/Ritzau Scanpix
According to the Tax Ministry, Denmark is “undoubtedly” the first country to get Airbnb to agree to such an arrangement. 
 
The agreement came just days after parliament agreed to set a cap on how many days Danish homeowners can rent out their homes through the service, as well as how much money can be earned tax-free through Airbnb before it has to be reported to Skat, the national tax authority. 
 
Tax Minister Karsten Lauritzen said the agreement is essential to ensure that Airbnb ‘hosts’ pay the right amount of tax. 
 
“I’m not always a happy tax minister, but I am today,” he said on Thursday. “This is how we will get the sharing economy to grow while also ensuring that taxes are paid.”
 
Lauritzen announced the arrangement alongside Airbnb’s Patrick Robinson, the company’s director of public policy in Europe, the Middle East and Africa. Robinson said that Denmark was a good place for Airbnb to start the automatic reporting. 
 
“Denmark is a good place to try this. Denmark has a strong welfare society and the Danes are open to new things,” Robinson said. 
 
As part of the political agreement that proceeded the Airbnb deal, Airbnb hosts were given increased tax-free allowances on their rental income. For permanent residences, the amount homeowners can earn before paying tax will be increased from 24,000 to 28,000 kroner. For those renting out summer homes, the tax-free allowance will be raised to 40,000 kroner from the previous 21,900 kroner. When the rental income exceeds those amounts, it will be taxed by Skat.
 

A graphic from the Tax Ministry showing how much tax-free income can be earned through short-term rentals. 
 
The amount of days that one can rent out their home will be capped at 70 per year. 
 
Airbnb is expected to build a digital solution that can be integrated into its online platform. All rental income in Denmark will then be sent digitally to Skat to ensure the proper taxes are paid. 
 
NOTE: This article was updated on May 18 at 9.10pm to clarify the different levels of tax-free allowance.

TRAVEL

Airbnb to share homeowner info with Danish taxman

Home-sharing platform Airbnb will, as of July 1st, send information about Danes who list their homes on the site to tax authorities to make sure they collect their due, under a deal Danish lawmakers approved Thursday.

Published: 4 April 2019 19:13 CEST
Airbnb to share homeowner info with Danish taxman
File photo: Ólafur Steinar Gestsson/Ritzau Scanpix

“Airbnb will share information about Danish homeowners' revenues with tax authorities as of July 1st, 2019. As of 2021, the reporting will be done automatically,” Denmark's taxation ministry said in a statement.

Income taxes are deducted at the source in Denmark. The information shared with Airbnb will concern only tax details and no other information about the users' profile.

A tax ministry spokesman told AFP this was the first deal reached between Airbnb and a country's tax authorities.

According to VisitDenmark, a million people stayed in an Airbnb residence in Denmark in 2018. Some 39,000 homes were listed on the site last year.

“The new rules … will ensure that ordinary Danes can continue to benefit from tourism to Denmark … and that the government can get its share of the economic boost provided by tourism,” Airbnb's head of northern European operations, Hadi Moussa, said in the statement.

Airbnb, accused of aggravating housing crises by driving up rents and pushing out tenants and criticised by the hotel industry, currently faces legal battles in several countries.

In France, Airbnb risks a 12.5 million euro fine for listing 1,000 homes on its site that have not been officially registered with the city of Paris.

Paris, Berlin, Amsterdam, Barcelona, Tel Aviv and Dublin have all either announced or adopted measures to regulate temporary rentals through Airbnb.

READ ALSO: In world first, Airbnb to report income directly to Danish authorities

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