What is VAT and how does it apply to me?
Value Added Tax, or VAT, is a tax assessed on the supply of goods and services. Airbnb charges VAT on its service fees for customers from Albania, Belarus, Chile, Colombia, Iceland, Mexico, Norway, Russia, Saudi Arabia, Serbia, South Africa, Switzerland, Taiwan, the Bahamas, the European Union, Uruguay, and the United Arab Emirates.
In Mexico and Taiwan, VAT applies to the accommodation price plus any fees for other items, such as cleaning, extra guests, and guest service fees. For listings and Airbnb Experiences located in Mexico and South Korea, VAT applies to guest and host service fees (unless otherwise exempt).
Airbnb is also required to collect VAT on its service fees from all users who contract with Airbnb China. In Japan, Japanese Consumption Tax, or JCT, is applicable instead of VAT. In Japan, JCT applies to the hosts (via the “reverse charge” system) and the guests.
In Australia, New Zealand, and Singapore, Goods and Services Tax, or GST, is applicable instead of VAT. GST applies to the hosts and the guests. In Malaysia, service tax is applicable instead of GST or VAT. Malaysian service tax applies on service fees for guests and hosts in Malaysia.
VAT, JCT, and GST rates are usually calculated according to the local rate of the customer's country of residence or the place of supply.
VAT, JCT, GST, or service tax is charged at the time of payment and is based on the total guest service fee for a reservation. If you change your reservation, VAT, JCT, or GST adjusts to reflect any change in the service fee. Airbnb charges JCT from guests who reside in Japan (and then Airbnb reports and pays the JCT). In this regard, Airbnb (Airbnb Ireland) is registered as a Registered Foreign Business under the JCT act (Registration No. 00046).
Airbnb collects VAT from guests who reside in Taiwan on the guest service fee. Airbnb also collects VAT on the full accommodation price plus any fees for other items, like cleaning fees or fees for extra guests, if applicable, from all guests staying in Taiwanese listings (i.e. domestic and inbound travelers) and Mexican listings. Airbnb is required to charge VAT on the guest service fee from all guests whose reservation listing is located in South Korea.
VAT, GST, or service tax is deducted from your payout and is based on the total host service fee for a reservation (unless otherwise exempt). If a reservation is changed, VAT or GST adjusts to reflect any change in the service fee.
For hosts who reside in Japan, each host is obligated to report and pay the JCT because the hosting services that Airbnb provides are subject to the “reverse charge” system under the JCT act (Airbnb does not charge or report/pay such JCT). As to the JCT payment by way of the “reverse charge” system, please refer to the explanation on the National Tax Agency of Japan's website.
Please consult your nearest local tax offices or your tax advisors as to your specific tax consequences.