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Booking: From November 1, those who rent apartments must declare the NIPT

2023-10-27 08:52:00, Ekonomi CNA

Booking: From November 1, those who rent apartments must declare the NIPT

Illustrative photo

After the country's return to a favorite tourist destination, the number of individuals who register their properties on Booking or AirBnb for daily rent has increased significantly, but the vast majority of them operate informally, according to real estate agencies.

Cooperation has already been established between the international companies that offer this type of service and the tax administration for the formalization of the market and for the taxes that must be paid for the income generated from short-term rentals.

At the request of the Albanian authorities, the Booking platform, through an announcement, has asked the owners of the apartments that if they do not declare the NIPT, from November 1 they will pay 20% VAT for the commissions that Booking holds.

"Please make your NIPT number available by 31 October 2023. Also confirm your VAT registration, date of registration and VAT registration statement by 31 October 2023. From 1 November 2023, if you have not submitted VAT registration, confirmation that you are VAT registered, the date and a copy of your proof of registration we will apply 20% VAT to the commission invoice we send you. Please note that this only applies to the commission bill we send you, it does not affect the VAT charged to the customer on the price of their stay at your property," says Booking's announcement.

For example, if a house has a daily rent of 100 euros, Booking usually takes 12-18% commission, or 12-18 euros.

Booking will now keep the VAT from the apartment owners on the commission it receives, ie 20% of the 12-18 euros, or an additional 2.4-3.6 euros. Booking will then pay this amount to the Albanian fiscal authorities.

Owners' alternatives, either 15% income tax, or register as accommodation facility with 6% VAT

While the amount that Booking will keep as VAT on the commissions may not be very high, the aim of Taxation is that through these payments the individuals registered on this platform will be identified, as the data from the payments made by Booking will be sent to them Directorate of Taxes.

The latter will then turn to the owners of the apartments to ask them to pay taxes on the income they benefit, based on the fiscal legislation.

After tax identification, individual owners have two alternatives:

First, they can continue to maintain the status they have, ie. not register for taxes, but in the meantime they have to pay 15% as tax on the income they receive from the rent.
Second, to be registered as a categorized commercial entity, as an accommodation structure for which the VAT liability is 6%. Categorization as an accommodation structure for the benefit of 6% VAT is carried out by the Ministry of Tourism, and further after receiving it, the commercial entity is registered for NIPT in Taxation.
At the moment, this measure to formalize the market through the identification of owners registered on foreign platforms is for Booking, it is expected to soon be extended to the identification of properties registered on AirBnb and Tripadvisor.

Growing rental business

In the month of September 2023, the number of daily rental structures on the two international booking platforms (according to Monitor research) and AirBnb (according to AirDNA data) reached 24,902 apartments/flats.

In September 2023, according to Monitor research, the number of apartments and houses listed on Booking reached 9,390 properties. So far 5,614 properties have been placed on Booking for letting for September 2024 (properties placed for letting near next year's season are no longer used in advance).

While on AirBnb, for the month of September 2023, according to AirDNA data that analyzes statistics for daily rental structures, there were 15,512 property listings available. Compared to September 2022, properties listed for rent on this platform increased by 25%.

In addition to the lack of formalization, the rapid development of the short-term rental market is also harming the long-term rental sector, where according to the agencies there is a lack of properties for long-term rental and the rental price has increased significantly.

Stela Dhami, from the international real estate agency "Colliers International Albania", told Monitor that the high demand for apartments from foreigners through online bookings on Airbnb and Booking, mainly during the tourism season, significantly strengthened the pressures to increase the prices of long-term leases.

Ms. Dhami claims that the number of individuals who are renting apartments to rent them out by the day has increased.

Zak Topuzi, from the Albanian Hotel Association, told Monitor that the short-term rental market on AirBnb has become a global concern and the approach to them is changing in many countries, which are either suspending them or letting them operate no longer. more than 3 months a year.

While in Albania, according to him, it was possible to force the owners of these apartments to pay the obligations through cooperation with Booking, which forces them to declare the NIPT, otherwise the entity will pay 20% VAT to the commissions, through which it will be identified in taxes.

This is the second measure undertaken by the tax administration for the registration of owners of apartments that are given for daily rent.

In 2019, from the Directorate of Taxpayer Service, the control started by contacting apartment owners by phone on all online platforms where the rental of apartments was published.

Online verification showed that a large number of them were not registered as tax subjects, but the problem of their formalization was not addressed./ Monitor