AIRBNB RE­FUSES MEX­I­CAN GOV­ERN­MENT’S PILOT TAX PRO­GRAMME

The Star (St. Lucia) - Business Week - - TECHNOLOGY & TAXATION - BY AN­DREA NAVARRO, BLOOMBERG

Airbnb Inc. has stepped away from ne­go­ti­a­tions with Mex­ico that would have re­quired the home-shar­ing web­site to col­lect in­come tax from its hosts and send the money to the gov­ern­ment, ac­cord­ing to a per­son fa­mil­iar with the talks.

Af­ter a year of dis­cus­sions, an agree­ment was close: the com­pany was to give the Fi­nance Min­istry a monthly re­port of tax­payer info and how much in­come each host gen­er­ated. The com­pany would also with­hold a sin­gle-digit in­come tax, which it would re­mit to the gov­ern­ment, ac­cord­ing to the per­son, who asked not to be named be­cause the in­for­ma­tion isn’t pub­lic.

The talks about Airbnb’s par­tic­i­pa­tion in the vol­un­tary tax pilot pro­gramme fal­tered a month be­fore the agree­ment was to be an­nounced, with the com­pany say­ing it faced tech­ni­cal chal­lenges to with­hold­ing in­come taxes from hosts, the per­son said. The talks are es­sen­tially dead for now, though Airbnb has other agree­ments in place con­cern­ing pay­ment of a sep­a­rate lodg­ing tax.

“As part of our com­mit­ment to di­a­logue and to en­ter agree­ments with lo­cal gov­ern­ments, we’ve reached seven deals to vol­un­tar­ily col­lect and re­mit lodg­ing taxes in Mex­ico on be­half of hosts,” an Airbnb spokesper­son wrote in an email. Mex­ico’s Fi­nance Min­istry de­clined to com­ment.

Mex­ico was si­mul­ta­ne­ously ne­go­ti­at­ing a sim­i­lar deal with Uber Tech­nolo­gies Inc., which re­sulted in a rule geared to­ward ride­hail­ing and food de­liv­ery ser­vices that ri­val ride-shar­ing com­pany Cab­ify has joined.

DAN­ISH DEAL

The lo­cal tax ques­tion isn’t new for Airbnb. In May, the com­pany reached an agree­ment with the Dan­ish gov­ern­ment to re­port users’ rental in­come to the tax au­thor­ity. The deal in Mex­ico would have taken that one step fur­ther, with Airbnb not only re­port­ing hosts’ in­come but also col­lect­ing and re­mit­ting the cor­re­spond­ing taxes. Airbnb is work­ing with hun­dreds of gov­ern­ments around the world to reach vol­un­tary lodg­ing-tax agree­ments. It’s be­gun shar­ing hosts’ in­come in­for­ma­tion, but has so far stopped short of col­lect­ing the taxes. Mex­ico, mean­while, has been look­ing for ways to boost its tax col­lec­tion, which is the low­est among members of the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment. The out­go­ing Mex­ico ad­min­is­tra­tion is also in talks with Net­flix Inc. for an agree­ment to col­lect sales taxes from users, and the new gov­ern­ment is ex­pected to con­tinue them.

The talks are still in the early stage, the per­son said. Net­flix, based in Los Gatos, Cal­i­for­nia, de­clined to com­ment.

Airbnb is work­ing with hun­dreds of gov­ern­ments around the world to reach vol­un­tary lodg­ing-tax agree­ments. It’s be­gun shar­ing hosts’ in­come in­for­ma­tion, but has so far stopped short of col­lect­ing the taxes

Airbnb signed a sim­i­lar agree­ment last year with the US Vir­gin Is­lands to col­lect taxes on be­half of hosts and re­mit them to the Vir­gin Is­lands Bu­reau of In­ter­nal Rev­enue

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