Accommodation Association of Australia (AAoA) says companies which are platforms for residential properties being used for tourism accommodation are continuing to avoid paying their fair share of taxes in Australia and it’s not on.
The Association says this week’s ruling issued by the Australian Taxation Office (ATO) regarding the sharing economy is inconsistent.
“The ATO has determined that if you make a car available for public hire and use it to transport passengers for a fare, you are required to be registered for GST regardless of your turnover,” said AAoA CEO, Richard Munro.
“Yet, if you make a room in your property available for public hire and charge a fee, GST doesn’t apply.
“Surely, the most sensible approach would be for the ATO to ensure that all companies operating in Australia’s sharing economy pay the same taxes as ‘bricks and mortar’ companies, including GST and company tax,” he said.
Munro’s comments came following an ATO ruling whereby Uber car drivers have been given less than three months to start paying GST, yet the 35,000 Airbnb hosts in Australia won’t have to collect GST or even register for it.
“Airbnb welcomes this announcement by the ATO,” Airbnb’s Australian General Manager, Sam McDonagh said in a statement. “It’s another signal that the sharing economy is here to stay in Australia.”
However, the ATO said Airbnb hosts would still need to declare any income earned from the service and if they didn’t, it would be declared as tax evasion.
Munro said the reaction of some sharing economy companies is evidence that a more detailed policy response is required.
He said: “Many operators in Australia’s accommodation industry are asking the question: ‘does Airbnb pay company tax in Australia; indeed, does it pay any tax in Australia?’
“If it doesn’t, then it is free-riding on the bricks and mortar operators in the tourism industry who pay company tax that, in part, goes towards funding organisations like Tourism Australia, which has responsibility for driving visitation to Australia.
“It appears as if Airbnb has plenty of money to spend on marketing, including sponsoring high-profile Australian sporting clubs and major advertising campaigns, while it is seemingly paying little or no tax in Australia.
“This is in addition to the existing legal question marks which hang over property owners who rent out rooms through Airbnb and other similar platforms such as compliance fire and safety, insurance and disability access to name just a few,” he said.