Inspection done by financial administration. Do you tax your income from Airbnb correctly?

The General Financial Directorate has gained access to data about persons that provide accommodation via Airbnb and currently, the GFD uses the data for inspection. Their aim is to check whether the respective persons have taxed their income from this kind of accommodation properly and correctly. The landlords -either private individuals or legal entities - are being contacted by the financial administration, and if the financial administration has any doubts about possible discrepancies between the declared and real income of such persons/entities, it will require an explanation or will call on the persons/entities.

Some time ago, the financial administration published its opinion on the taxation of such income. According to the opinion, in most cases such income is considered income from providing accommodation services by its very nature. This means that such income should not be taxed by private individuals as income from renting real estate but as income from running a business, and as such, is subject to health insurance and social security contributions. Income from Airbnb can be affected by VAT aspects as well because accommodation services are subject to VAT, contrary to income from renting real estate which can be VAT exempt. Also commission paid to agents is subject to VAT, which means that landlords who are VAT non-payers can become liable for VAT registration as a "VAT identified person" and subject to VAT payments from such commission.

Because no taxation or incorrect taxation of landlords' income from Airbnb can result in sanctions due to the failure of meeting tax duties, it would be appropriate for landlords to review the nature of their income and consider which tax regime they are subject to. If any discrepancies are found, it is recommended that an additional tax return be submitted to reduce any possible sanctions.