A landmark move will see automatic reporting of income of houseowners to tax authorities in Denmark by Airbnb.
This measure will make it simpler for the tax authorities to identify and spot those house owners who tend to evade tax on incomes that they make by renting out their assets through the renting platform.
Despite the fact the Denmark wants the flourishing of a”shared economy” the authorities cannot let go of its legitimate taxes, said Danish tax minister Karsten Lauritzen.
This tax evasion via Airbnb has been a matter of concern not only for Denmark but a number of other countries that have been grappling with ways and means to prevent such evasion. The move in Denmark however has to be passed by the country’s parliament.
Airbnb has also been facing severe opposition and criticism that its business has led to a steep rise in house prices and renting costs in some of the major cities of the world as caused a reduction in business for local hotels and B&B outlets, in addition to the tax evasion using Airbnb allegations.
The new measure being brought in Denmark would also put a cap on the number of days that a house owner would be able to rent out his property on the site to a maximum of 70 days in a year. A tax exemption allowance of up to 40,000 kroner (£4,690) a year would also be given to the property owners renting out their property through the site.
“We want a flourishing sharing economy in Denmark where it is possible for renters to earn a reasonable tax-free amount on making their property available,” said Mr Lauritzen. “But it is under the condition that tax payments are in order.”
In 2017, there were about 900,000 visiting users of the website into Denmark who had been accommodated in properties belonging to about 30,000 registered renters in Denmark. An average 15,500 kroner can be earned by a typical property owner in Denmark by sharing their property to the visitors for 23 nights a year.
The move was described to be “innovative and forward-thinking” by Denmark, by Patrick Robinson, Airbnb head of public policy in Europe.
“The progressive attitude of Denmark is an example to the world and demonstrates how positive results can be achieved when policymakers and Airbnb work together on the shared goals of making cities better places to live, work and visit,” he said in a statement.
Germany has also acted against Airbnb and the tax authorities of the country has directed Airbnb to disclose to it all data on its country’s users so that the tax evaders could be identified and acted upon. And the booking and passport details of the people who are staying in Airbnb properties has been agreed to be given by the company to Chinese authorities.,
(Adapted from BBC.com)