{"id":9622,"date":"2023-01-19T10:10:07","date_gmt":"2023-01-18T21:10:07","guid":{"rendered":"https:\/\/theaccountinghub.co.nz\/?p=9622"},"modified":"2024-03-04T18:44:28","modified_gmt":"2024-03-04T05:44:28","slug":"gst-rules-for-airbnb-operators-set-to-change","status":"publish","type":"post","link":"https:\/\/theaccountinghub.co.nz\/gst-rules-for-airbnb-operators-set-to-change\/","title":{"rendered":"GST rules for Airbnb operators set to change"},"content":{"rendered":"

A change to the rules around how GST applies to services in the platform economy, such as Airbnb and Uber, will likely come into effect on 1 April 2024 as part of the Taxation Annual Rates for 2022-23 Platform Economy and Remedial Matters) Bill (No 2).<\/p>\n

The proposal<\/h3>\n

The Bill proposes that GST is to be levied on all platform economy supplies. For the individual suppliers who are not registered for GST, the platform providers such as Airbnb will be required to collect the GST directly from consumers and disperse a portion to Inland Revenue and a portion (a flat-rate credit) back to the supplier.<\/p>\n

Individual suppliers earning under the $60K\/annum revenue threshold will continue to be exempt from having to register for GST.<\/p>\n

Read more about how GST currently applies to Airbnb owners<\/a><\/p>\n

The rationale<\/h3>\n

The Government argues that some platform services provided normally would be subject to GST. But because they\u2019re being passed through these electronic marketplaces, from providers who are under the GST-registration threshold, that\u2019s not always happening. They say:<\/p>\n

\u201cIf\u00a0this was to continue it could have adverse consequences for the long-term sustainability of the GST system and place traditional suppliers of these services who are charging and returning GST at a competitive disadvantage. It could also undermine New Zealand\u2019s broad based GST system<\/em>.\u201d<\/p>\n

The intention is that the changes will put everyone on a level playing field as far as GST is concerned.<\/p>\n

It also brings these digital platforms in line with online or remote services such as Netflix. Legislation dubbed the \u2018Netflix tax\u2019 that came into effect in 2016, requires overseas businesses meeting the GST registration rules to charge and return GST on online or remote services they supply to New Zealand customers.<\/p>\n

More about GST on remote services supplied by overseas businesses<\/a><\/p>\n

How the proposed changes will work<\/h3>\n

The best way to explain how the new rules will work in practice is through an example:<\/p>\n

Mike owns a bach in the Coromandel that he rents out on Airbnb when he\u2019s not using it. As he earns under the $60K\/annum GST threshold, Mike is not registered for GST.<\/p>\n

Sally books accommodation through Airbnb from Mike for $200 excluding GST.<\/p>\n

Airbnb will then be required to:<\/p>\n