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MEXLAW > Accounting  > Formalized Tax Collection Through Airbnb in Quintana Roo

Formalized Tax Collection Through Airbnb in Quintana Roo

Travelers have changed over the years; nowadays many people prefer to stay in homes rather than large resorts. Airbnb has become a popular choice,  an intimate, less expensive way to travel and see the world. Many travelers make lasting connections in these homes and neighborhoods and experience more culture than they would if they were staying at a large resort.

Airbnb’s popularity continues to grow and because of its success has triggered concern from the hotel industry regarding tax obligations and the lack of regulations for this type of accommodation. The Mexican government also recognizes the importance of home sharing for the development of local tourism and the income it generates. Airbnb and the state authorities have signed an agreement, As of October 1, 2017, travelers booking accommodations through Airbnb in Quintana Roo will be charged a 3% lodging tax, the tax will be calculated and processed online during the reservation process. The tax is not a new one, but it has been formalized by collecting it through Airbnb. A 3% tax on lodging is considerably low in comparison to other vacations destinations who charge up to 20% lodging tax.

At this time only Mexico City and Quintana Roo are included in this agreement, but other favorite locations in Mexico are expected to sign the agreement in the upcoming weeks.

According to Airbnb, they have experienced incredible growth in Quintana Roo, a 131% increase in Airbnb guests arriving in Quintana Roo, and 189% growth overall in Mexico. There are thousands of homeowners enjoying the success and ease of running their home business through Airbnb. The tax will provide a substantial revenue for the state.

The host benefits by having Airbnb be responsible for calculating,  collecting and submitting the tax. The lodging tax does not affect the host’s income or income tax.

Airbnb reports that as a part of their long term commitment to Latin America they are opening offices in Mexico City and Buenos Aires, “growing our presence in Latin America and strengthening our commitment to democratizing travel around the world.”

The Secretary of Finance website states “In Mexico, 62,000 properties offer this service in several tourist destinations, among which CDMX, the Riviera Maya, Cancun and Puerto Vallarta.”  

The companies that provide this type of platform are not responsible for declaring the income of individual hosts, but homeowners are reminded to claim revenue and comply with their income tax obligations it is important to be aware of Mexico’s tax laws.

Consult with an accountant at Mextax to find out the best way to manage your income, expenses and deductibles of your home business. contact@mextaxes.com

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