13 ms·

Canada to apply GST/HST to short-term rentals booked online

97 points by 63labs 6y ago

arcticbull 6y ago
> One reason that short-term rentals have been cheaper than hotels is because hotels had to collect and pay sales tax while Airbnb didn’t. Seems like this isn’t a new tax from out of nowhere to disadvantage Airbnb but rather a policy designed to bring Airbnb in line with their peers. It reads like Airbnb was put at an artificial advantage as compared to hotels because hotels had to charge sales tax. Now everyone does. Seems fair to me. What seems unfair is that they weren’t subject to this the whole time. Honestly surprised it’s not retroactive.
- esc_colon_q 6y ago
  Fixing a bad law is fine, but you can't propagate that back just because you wish you'd thought of the edge cases then. Or at least you shouldn't, if you have any sense of fair play...
  - arcticbull 6y ago
    In Canada ex post facto laws are prohibited in the charter of rights and freedoms for criminal matters only - and this isn’t an absolute prohibition either. They are permitted for civil matters. It’s an interesting thought exercise, and fairness would in my sole opinion be based on whether they knew they should have been paying the whole time and were getting away with it. It won’t happen, though.
  - usrusr 6y ago
    Legislative changing laws, that should definitely not apply retroactively, even if sometimes this is very painful. Executive fixing application of laws that haven't been applied correctly in the past however is an entirely different story. If laws oblige you to pay taxes you are obliged to pay wether they have been collected or not. Not much different from a crime being a crime wether you are caught or not. Unless of course there's also a law that states an equivalent of "taxes not collected within the first $n $timeunit are waived".
    - syshum 6y ago
      The problem with that is the AirBnB never owed the tax in the first place. Either the Host does, or the Consumer of the service does, AirBnb would just be collecting and remiting that on behalf of the parties
      - Sanzig 6y ago
        Depends on the jurisdiction, but most wouldn't put this on the consumer. In most jurisdictions, if a merchant neglects to collect sales tax when the sale is made, it's out of their pocket - not the customer.
  - DanBC 6y ago
    Tax law is a bit more complicated. Tax law is what's written in statutes, but it's also how the courts interpret the law. This means there's stuff that's clearly lawful, stuff that's clearly unlawful, and then a grey area where reasonable people can interpret the law in different ways and we need the courts to rule. This works well when you have cases that go to court. But some tax authorities prefer a light-touch or right-touch regulatory approach, and so they prefer to persuade people to pay tax that's owed and they leave court cases for the blatant offenders. That means we don't get the case law.
  - rootsudo 6y ago
    Ex post facto.
    - freeone3000 6y ago
      Is legal in Canada. I'm honestly surprised it wasn't applied here, because it's clear that tax should have been paid by analogy, even absent a direct law.
  - calyth2018 6y ago
    I disagree. What's being explicitly applied is the federal and provincial sales tax. Airbnb and the hosts were selling a service without collecting the sales tax. Someone was tax evading, and someone owes the CRA back taxes.
- buran77 6y ago
  > was put at an artificial advantage as compared to That makes up most of the "disruption" lately. Companies discover that they can exploit some legal loophole by claiming "but technology" and get an upper hand over classic competitors. By the time they're forced to follow the same rules, or (less likely) the law is relaxed for everyone else, they already have a healthy head start and can either claim that they're being treated unfairly, or that they're better than everyone else.
  - AmericanChopper 6y ago
    My reading of that article was that tax liability hasn’t changed at all. The Airbnb hosts were always liable for paying all of their taxes, including whatever sales taxes they were liable for. This change means that Airbnb are now responsible for collecting that sales tax and paying it to the government on behalf of their hosts. Whatever opinion you have about that, it doesn’t seem to be addressing any sort of loophole. It’s not a new tax, it’s just a new regulation for collecting it.
  - throwaway201103 6y ago
    The biggest and most common "loophole" being "we don't need all the physical infrastructure" Amazon: we don't need to own retail stores or inventory Airbnb: we don't need to own hotel properties and employ managers and housekeepers Uber: we don't need to own cars and employ drivers Are there any examples of tech disruptors that are really displacing classic competitors only on the basis of tax loopholes?
    - rob74 6y ago
      Can't think of any, but it's still fair to say that tax loopholes (and lack of other regulations that the established competitors are subject to, e.g. Taxi licenses) provide an additional advantage...
    - TheOtherHobbes 6y ago
      Amazon: We don't need to pay sales tax or look after our warehouse employees AirBnB: We don't need to pay sales tax or look after our hosts Uber: We don't need to pay sales tax or look after our drivers The sales tax problem is only a loophole in some territories. The "look after" part is a problem in all of them.
jariel 6y ago
It's just unbelievable to consider that Amazon, AirBnB etc. have been so successful due to tax irregularities, and of course, when at scale, they G and A can doe this via Dublin loopholes etc.. When bureaucrats are searching for ways to make money, and they always all, for god's sake why don't they go to the obvious places first? We also have to consider how much our subsidized postal systems are really just subsidizing one form of business over another.
- bawolff 6y ago
  > We also have to consider how much our subsidized postal systems are really just subsidizing one form of business over another. Canada post is not exactly subsidized: https://www.ctvnews.ca/mobile/business/canada-post-group-reports-2017-profit-up-as-parcel-business-swells-1.3913827 https://www.ctvnews.ca/mobile/business/canada-post-group-rep... But even if it was, this is precisely the type of thing it makes sense to subsidize, since its a business that enables other businesses.
  - onemiketwelve 6y ago
    And a business that used to enable communication between residents, business, and government
  - jariel 6y ago
    1) Canada post is a crown corporation and is effectively subsidized [1]. It's existence is guaranteed, it effectively cannot go insolvent, as such it receives considerably better terms of business than otherwise. And more. 2) "its a business that enables other businesses" Almost all businesses 'enable other businesses' - this is absolutely not a reason to subsidize package delivery. In fact, it's the opposite of a reason. If there is a reason, it's to ensure some kind of common mail delivery particularly to remote outposts. [1] https://lfpress.com/opinion/columnists/canada-post-back-to-a-subsidized-social-service#:~:text=Trudeau%20has%20chosen%20to%20move,on%20taxpayer%20subsidies%20to%20survive https://lfpress.com/opinion/columnists/canada-post-back-to-a....
  - pjc50 6y ago
    He's probably referring to the international postage system which makes it cheaper to ship from China than in- country.
OneGuy123 6y ago
A completely personal rant: I was almost evicted since my landlord wanted to make more money with Airbnb. Before that I've already heard of cases how in tourists towns the local poorer population wasn't able to get long term apartments because richer tourists filled them through Airbnb. Airbnb is cancer for the local population in any country that isn't very rich because locals & students then have to commute from further distances. So banning Airbnb would be godsend for the local population of many countries, if you want to make money with renting open a hotel. Obviously there is the argument "I own the apartment so I can do whatever I want". I really have no good counter argument for this as it is true. But all laws are really relative to the culture. This same person could then say "I don't owe the country any taxes because _I_ made the money". So this just goes to show that we "normalize" everything based on laws. For the greater good of the local population in poorer countries Airbnb should be banned.
- onemiketwelve 6y ago
  The thing that sucks is that a lot of the publicised grievances are always with the demand side, and never the supply aka the home owners. Since they are richer or something, denying them side income or filling an empty room that would otherwise go unused is supposed to be a loss they should stomach, not to mention the savings/ better experience for the renter who doesn't want a hotel experience. And yes, there are lots of serial property owners who run lots of homes on Airbnb but I really don't think regulation can be nuanced enough, at least what's been proposed.
  - freeone3000 6y ago
    > Since they are richer or something, denying them side income or filling an empty room that would otherwise go unused is supposed to be a loss they should stomach Quite simply, yes. If this were all it was, nobody would have a problem. The issue is short-term rentals taking over reliable lease stock. Landlords can make more money with less downside renting out one weekend a month than an entire month, so why wouldn't they? So rental properties simply vanish from the market at key price points. If everyone had a home that they owned, I would not have a problem with airbnb. But this is not the case, and we have no intention of making this the case, so as long as we have obligatory renters, we can't have this incentive.
acd10j 6y ago
I can see no mention in article of Airbnb asking for a bailout in Canada and in turn Canada slapping a tax.
- mattmanser 6y ago
  Penultimate paragraph. Likely an editor sensationalized the title, as you're right, it's not the focus of the article.
- mgbmtl 6y ago
  AirBNB asked for a bailout back in March 2020. The blog post makes it sound like there was a cause and effect, but this is just the government normalizing things across the country. Here are more official sources on the news: https://www.cbc.ca/news/politics/economic-update-child-care-netflix-tax-1.5822327 https://www.cbc.ca/news/politics/economic-update-child-care-... https://www.thestar.com/business/2020/11/30/ottawa-to-impose-fair-share-of-tax-on-digital-giants-including-netflix-amazon-and-airbnb.html https://www.thestar.com/business/2020/11/30/ottawa-to-impose...
  - Sanzig 6y ago
    I think (well, I hope) that Airbnb understood that request would go nowhere. Airbnb is politically radioactive in Canada, any government percieved as "bailing out" Airbnb would likely suffer consequences at the ballot box. I suspect Airbnb instead made the request to placate underwater hosts during the start of the COVID tourism crash - they had to be seen as doing something. Still an incredibly scuzzy and tone-deaf ask, but put in context, I sort of get why they did it.
f6v 6y ago
The audacity of asking for a bailout while planning the IPO.
- eschulz 6y ago
  Very audacious. Looks like their approach was to illustrate the financial difficulties of the Canadian hosts and ask the government of Canada to help those people out. Classic situation where the lion's share of the financial risk is held by thousands of individuals instead of the central company, and this is probably what also let them avoid certain taxes in the first place.
63labs 6y ago
How did the title of the HN post change? I originally posted "Airbnb asked Canada for a bailout. Canada slapped Airbnb with a tax." It's now "Canada to apply GST/HST to short-term rentals booked online"
- mynegation 6y ago
  Probably changed by a moderator because they considered original one clickbaity. About new title: as a Canadian I am well aware what GST/HST is but might be worth changing back to the generic “sales tax”.
  - 63labs 6y ago
    Interesting... I didn't know they did that.
janeroe 6y ago
What is this thread, a branch of /r/LateStageCapitalism? People, who are not aware that the questions they raise were answered centuries ago, are philosophastering about their "solutions".
deleted 6y ago
[deleted]
burke 6y ago
In Canada, businesses are exempt from collecting GST/HST if the business makes under $X per year. This feels sensible and reduces paperwork and things to think about when starting up, but is a clear example of how AirBnB was skirting the rules by treating each renter as a business. They should have been collecting GST/HST from the start at the platform level.
- randlet 6y ago
  $X is $30,000CAD FWIW. The exemption is helpful for getting off the ground as it's one less thing to think about, even though in reality charging (and filing) GST/HST is not very onerous.
- mattbee 6y ago
  In the UK they already add VAT to their commission fees, which is what Airbnb is "selling" e.g. if you pay £100 for a stay in a UK-based short let, Airbnb's fee on that might be £15, of which £12.50 is their fee, and £3 is 20% VAT. £85 is held in trust for the host, and passed on direct. So Airbnb's income on that transaction is £12.50, not £100. Hosts do sell their properties on multiple platforms, and their income determines whether they have to register for VAT. In Canada it's apparently $30,000 per quarter, in the UK it's about £85,000 per year. So lots of Airbnb hosts don't currently have to pay VAT.
sleepysysadmin 6y ago
Canada still hasn't put out a budget. Their "Fall economic update" explains why there is no budget. Their deficit is $381 billion. Yet they are talking about socialized childcare? To be clear, Canada's total debt that built up since the 1980s is ~$750 billion. In 2020 alone the deficit of an equivalent of 20-30 years of government debt. Who is to pay for all this spending? Well it's simple. We can look to our largest industries. Mining/Oil/Gas is actively being harmed and can't even afford themselves. Manufacturing was destroyed by christia freeland. Government taxes destroyed bombardier which is now being sold off. Little to airbus, little to alstom. So we know exactly who is left in Canada to pay the bills. FIRE. Finance, Insurance, and Real Estate. Finance are the ones who get to handle and manage the debt. So let's be realistic, Insurance and real estate left. Oh right, record low interest rates, possibly going negative. Real estate is being propped up by the government trying to prevent explosion. I guess Insurance will be the one holding the entire debt?
- cmrdporcupine 6y ago
  Some context: "Today [2018], per-capita Canadian federal debt is equal to US$13,588.51. In the U.S., the same figure is nearly five times higher at $67,000 per American." Source, the not-very-left-wing National Post: https://nationalpost.com/news/the-utterly-unbelievable-scale-of-u-s-debt-right-now https://nationalpost.com/news/the-utterly-unbelievable-scale...
- maxerickson 6y ago
  Governments don't need to pay off debt. At least not until they crash their currency, but that already makes the debt go away.
v77 6y ago
The bigger news from this budget update is that Netflix/Prime avoided a 'Cancon tax', where they would be forced to make more Canadian content for the services, funded by an added levy on consumers in the country. We dodged a bullet there, I certainly don't mind these changes.
- bregma 6y ago
  I'm old enough to remember when CanCon was brought in to broadcast TV and radio. Lots of business owners whined loudly about having to not import cheap second-hand culture from foreign places and how it cut in to their personal wealth generation capacity. There was a bit of a rough transition (cough Beachcombers cough) but eventually the investment paid off with interest. I wouldn't resent a cultural development fee. It helps maintain a virtual wall across the southern border to protect our delicate assets.
  - dblohm7 6y ago
    Is it really effective across all media? Canadian radio is awful IMHO because of CanCon rules: there aren’t enough Canadian artists within a specific radio genre to saturate a station’s quota, so in many cases we end up hearing the same artists repeatedly throughout any given day.
    - throwaway201103 6y ago
      Bieber fatigue?
      - dblohm7 6y ago
        Try Nickelback! Shudder
    - bregma 6y ago
      That was the argument used 50 years ago. It hasn't been true for about 40 years. Unless your genre is "American pop artists" or maybe "Italian renaissance original instruments".
mattbee 6y ago
Canada still has an exemption for small suppliers not to pay sales tax, so this provides a strong incentive for those to find ways to take bookings outside of Airbnb. Does an owner-operated web site count as a "digital platform"? What about a centralised telephone booking service? Or does it just mean "anything that's big enough to be targeted as one entity by government"? It seems clumsy to tax the booking method rather than the supply itself, but maybe it's a matter of practicality for tax collectors.
- ryanbrunner 6y ago
  I don't think this is such a bad thing. If AirBnB's role of the relationship isn't worth the premium you pay to cover taxes, that's a pretty strong argument that AirBnB isn't really providing much value and we'd be better off without a middleman in this relationship (I think for what it's worth that this probably isn't true, and people will happily pay 5-15% to be able to deal directly with AirBnB)
  - mattbee 6y ago
    Airbnb already charge VAT (in the UK at least) on the host service fees, i.e. the 15% of the transaction they keep for themselves. So Airbnb already charge for their service, and they're taxed on it. What's new is taking GST (or VAT) on the accommodation too, which is normally paid over to hosts direct, and who have to remit VAT only if they were over the "small trader" threshold (in the UK that is not many).
xutopia 6y ago
I benefited from AirBnB and I am glad this is in place. Now hotels have no excuses but to offer better services or better price.
- hasuej 6y ago
  Yep, this is great for AirBNB hosts. It legitimizes the service and gives people a predictable/regulated way to run their rentals.

97 points by 63labs 6y ago

> One reason that short-term rentals have been cheaper than hotels is because hotels had to collect and pay sales tax while Airbnb didn’t. Seems like this isn’t a new tax from out of nowhere to disadvantage Airbnb but rather a policy designed to bring Airbnb in line with their peers. It reads like Airbnb was put at an artificial advantage as compared to hotels because hotels had to charge sales tax. Now everyone does. Seems fair to me. What seems unfair is that they weren’t subject to this the whole time. Honestly surprised it’s not retroactive.

esc_colon_q 6y ago
Fixing a bad law is fine, but you can't propagate that back just because you wish you'd thought of the edge cases then. Or at least you shouldn't, if you have any sense of fair play...
- arcticbull 6y ago
  In Canada ex post facto laws are prohibited in the charter of rights and freedoms for criminal matters only - and this isn’t an absolute prohibition either. They are permitted for civil matters. It’s an interesting thought exercise, and fairness would in my sole opinion be based on whether they knew they should have been paying the whole time and were getting away with it. It won’t happen, though.
- usrusr 6y ago
  Legislative changing laws, that should definitely not apply retroactively, even if sometimes this is very painful. Executive fixing application of laws that haven't been applied correctly in the past however is an entirely different story. If laws oblige you to pay taxes you are obliged to pay wether they have been collected or not. Not much different from a crime being a crime wether you are caught or not. Unless of course there's also a law that states an equivalent of "taxes not collected within the first $n $timeunit are waived".
  - syshum 6y ago
    The problem with that is the AirBnB never owed the tax in the first place. Either the Host does, or the Consumer of the service does, AirBnb would just be collecting and remiting that on behalf of the parties
    - Sanzig 6y ago
      Depends on the jurisdiction, but most wouldn't put this on the consumer. In most jurisdictions, if a merchant neglects to collect sales tax when the sale is made, it's out of their pocket - not the customer.
- DanBC 6y ago
  Tax law is a bit more complicated. Tax law is what's written in statutes, but it's also how the courts interpret the law. This means there's stuff that's clearly lawful, stuff that's clearly unlawful, and then a grey area where reasonable people can interpret the law in different ways and we need the courts to rule. This works well when you have cases that go to court. But some tax authorities prefer a light-touch or right-touch regulatory approach, and so they prefer to persuade people to pay tax that's owed and they leave court cases for the blatant offenders. That means we don't get the case law.
- rootsudo 6y ago
  Ex post facto.
  - freeone3000 6y ago
    Is legal in Canada. I'm honestly surprised it wasn't applied here, because it's clear that tax should have been paid by analogy, even absent a direct law.
- calyth2018 6y ago
  I disagree. What's being explicitly applied is the federal and provincial sales tax. Airbnb and the hosts were selling a service without collecting the sales tax. Someone was tax evading, and someone owes the CRA back taxes.
buran77 6y ago
> was put at an artificial advantage as compared to That makes up most of the "disruption" lately. Companies discover that they can exploit some legal loophole by claiming "but technology" and get an upper hand over classic competitors. By the time they're forced to follow the same rules, or (less likely) the law is relaxed for everyone else, they already have a healthy head start and can either claim that they're being treated unfairly, or that they're better than everyone else.
- AmericanChopper 6y ago
  My reading of that article was that tax liability hasn’t changed at all. The Airbnb hosts were always liable for paying all of their taxes, including whatever sales taxes they were liable for. This change means that Airbnb are now responsible for collecting that sales tax and paying it to the government on behalf of their hosts. Whatever opinion you have about that, it doesn’t seem to be addressing any sort of loophole. It’s not a new tax, it’s just a new regulation for collecting it.
- throwaway201103 6y ago
  The biggest and most common "loophole" being "we don't need all the physical infrastructure" Amazon: we don't need to own retail stores or inventory Airbnb: we don't need to own hotel properties and employ managers and housekeepers Uber: we don't need to own cars and employ drivers Are there any examples of tech disruptors that are really displacing classic competitors only on the basis of tax loopholes?
  - rob74 6y ago
    Can't think of any, but it's still fair to say that tax loopholes (and lack of other regulations that the established competitors are subject to, e.g. Taxi licenses) provide an additional advantage...
  - TheOtherHobbes 6y ago
    Amazon: We don't need to pay sales tax or look after our warehouse employees AirBnB: We don't need to pay sales tax or look after our hosts Uber: We don't need to pay sales tax or look after our drivers The sales tax problem is only a loophole in some territories. The "look after" part is a problem in all of them.

jariel 6y ago

It's just unbelievable to consider that Amazon, AirBnB etc. have been so successful due to tax irregularities, and of course, when at scale, they G and A can doe this via Dublin loopholes etc.. When bureaucrats are searching for ways to make money, and they always all, for god's sake why don't they go to the obvious places first? We also have to consider how much our subsidized postal systems are really just subsidizing one form of business over another.

bawolff 6y ago
> We also have to consider how much our subsidized postal systems are really just subsidizing one form of business over another. Canada post is not exactly subsidized: https://www.ctvnews.ca/mobile/business/canada-post-group-reports-2017-profit-up-as-parcel-business-swells-1.3913827 https://www.ctvnews.ca/mobile/business/canada-post-group-rep... But even if it was, this is precisely the type of thing it makes sense to subsidize, since its a business that enables other businesses.
- onemiketwelve 6y ago
  And a business that used to enable communication between residents, business, and government
- jariel 6y ago
  1) Canada post is a crown corporation and is effectively subsidized [1]. It's existence is guaranteed, it effectively cannot go insolvent, as such it receives considerably better terms of business than otherwise. And more. 2) "its a business that enables other businesses" Almost all businesses 'enable other businesses' - this is absolutely not a reason to subsidize package delivery. In fact, it's the opposite of a reason. If there is a reason, it's to ensure some kind of common mail delivery particularly to remote outposts. [1] https://lfpress.com/opinion/columnists/canada-post-back-to-a-subsidized-social-service#:~:text=Trudeau%20has%20chosen%20to%20move,on%20taxpayer%20subsidies%20to%20survive https://lfpress.com/opinion/columnists/canada-post-back-to-a....
- pjc50 6y ago
  He's probably referring to the international postage system which makes it cheaper to ship from China than in- country.

OneGuy123 6y ago

A completely personal rant: I was almost evicted since my landlord wanted to make more money with Airbnb. Before that I've already heard of cases how in tourists towns the local poorer population wasn't able to get long term apartments because richer tourists filled them through Airbnb. Airbnb is cancer for the local population in any country that isn't very rich because locals & students then have to commute from further distances. So banning Airbnb would be godsend for the local population of many countries, if you want to make money with renting open a hotel. Obviously there is the argument "I own the apartment so I can do whatever I want". I really have no good counter argument for this as it is true. But all laws are really relative to the culture. This same person could then say "I don't owe the country any taxes because _I_ made the money". So this just goes to show that we "normalize" everything based on laws. For the greater good of the local population in poorer countries Airbnb should be banned.

onemiketwelve 6y ago
The thing that sucks is that a lot of the publicised grievances are always with the demand side, and never the supply aka the home owners. Since they are richer or something, denying them side income or filling an empty room that would otherwise go unused is supposed to be a loss they should stomach, not to mention the savings/ better experience for the renter who doesn't want a hotel experience. And yes, there are lots of serial property owners who run lots of homes on Airbnb but I really don't think regulation can be nuanced enough, at least what's been proposed.
- freeone3000 6y ago
  > Since they are richer or something, denying them side income or filling an empty room that would otherwise go unused is supposed to be a loss they should stomach Quite simply, yes. If this were all it was, nobody would have a problem. The issue is short-term rentals taking over reliable lease stock. Landlords can make more money with less downside renting out one weekend a month than an entire month, so why wouldn't they? So rental properties simply vanish from the market at key price points. If everyone had a home that they owned, I would not have a problem with airbnb. But this is not the case, and we have no intention of making this the case, so as long as we have obligatory renters, we can't have this incentive.

acd10j 6y ago

I can see no mention in article of Airbnb asking for a bailout in Canada and in turn Canada slapping a tax.

mattmanser 6y ago
Penultimate paragraph. Likely an editor sensationalized the title, as you're right, it's not the focus of the article.
mgbmtl 6y ago
AirBNB asked for a bailout back in March 2020. The blog post makes it sound like there was a cause and effect, but this is just the government normalizing things across the country. Here are more official sources on the news: https://www.cbc.ca/news/politics/economic-update-child-care-netflix-tax-1.5822327 https://www.cbc.ca/news/politics/economic-update-child-care-... https://www.thestar.com/business/2020/11/30/ottawa-to-impose-fair-share-of-tax-on-digital-giants-including-netflix-amazon-and-airbnb.html https://www.thestar.com/business/2020/11/30/ottawa-to-impose...
- Sanzig 6y ago
  I think (well, I hope) that Airbnb understood that request would go nowhere. Airbnb is politically radioactive in Canada, any government percieved as "bailing out" Airbnb would likely suffer consequences at the ballot box. I suspect Airbnb instead made the request to placate underwater hosts during the start of the COVID tourism crash - they had to be seen as doing something. Still an incredibly scuzzy and tone-deaf ask, but put in context, I sort of get why they did it.

f6v 6y ago

The audacity of asking for a bailout while planning the IPO.

eschulz 6y ago
Very audacious. Looks like their approach was to illustrate the financial difficulties of the Canadian hosts and ask the government of Canada to help those people out. Classic situation where the lion's share of the financial risk is held by thousands of individuals instead of the central company, and this is probably what also let them avoid certain taxes in the first place.

63labs 6y ago

How did the title of the HN post change? I originally posted "Airbnb asked Canada for a bailout. Canada slapped Airbnb with a tax." It's now "Canada to apply GST/HST to short-term rentals booked online"

mynegation 6y ago
Probably changed by a moderator because they considered original one clickbaity. About new title: as a Canadian I am well aware what GST/HST is but might be worth changing back to the generic “sales tax”.
- 63labs 6y ago
  Interesting... I didn't know they did that.

janeroe 6y ago

What is this thread, a branch of /r/LateStageCapitalism? People, who are not aware that the questions they raise were answered centuries ago, are philosophastering about their "solutions".

deleted 6y ago

[deleted]

burke 6y ago

In Canada, businesses are exempt from collecting GST/HST if the business makes under $X per year. This feels sensible and reduces paperwork and things to think about when starting up, but is a clear example of how AirBnB was skirting the rules by treating each renter as a business. They should have been collecting GST/HST from the start at the platform level.

randlet 6y ago
$X is $30,000CAD FWIW. The exemption is helpful for getting off the ground as it's one less thing to think about, even though in reality charging (and filing) GST/HST is not very onerous.
mattbee 6y ago
In the UK they already add VAT to their commission fees, which is what Airbnb is "selling" e.g. if you pay £100 for a stay in a UK-based short let, Airbnb's fee on that might be £15, of which £12.50 is their fee, and £3 is 20% VAT. £85 is held in trust for the host, and passed on direct. So Airbnb's income on that transaction is £12.50, not £100. Hosts do sell their properties on multiple platforms, and their income determines whether they have to register for VAT. In Canada it's apparently $30,000 per quarter, in the UK it's about £85,000 per year. So lots of Airbnb hosts don't currently have to pay VAT.

sleepysysadmin 6y ago

Canada still hasn't put out a budget. Their "Fall economic update" explains why there is no budget. Their deficit is $381 billion. Yet they are talking about socialized childcare? To be clear, Canada's total debt that built up since the 1980s is ~$750 billion. In 2020 alone the deficit of an equivalent of 20-30 years of government debt. Who is to pay for all this spending? Well it's simple. We can look to our largest industries. Mining/Oil/Gas is actively being harmed and can't even afford themselves. Manufacturing was destroyed by christia freeland. Government taxes destroyed bombardier which is now being sold off. Little to airbus, little to alstom. So we know exactly who is left in Canada to pay the bills. FIRE. Finance, Insurance, and Real Estate. Finance are the ones who get to handle and manage the debt. So let's be realistic, Insurance and real estate left. Oh right, record low interest rates, possibly going negative. Real estate is being propped up by the government trying to prevent explosion. I guess Insurance will be the one holding the entire debt?

cmrdporcupine 6y ago
Some context: "Today [2018], per-capita Canadian federal debt is equal to US$13,588.51. In the U.S., the same figure is nearly five times higher at $67,000 per American." Source, the not-very-left-wing National Post: https://nationalpost.com/news/the-utterly-unbelievable-scale-of-u-s-debt-right-now https://nationalpost.com/news/the-utterly-unbelievable-scale...
maxerickson 6y ago
Governments don't need to pay off debt. At least not until they crash their currency, but that already makes the debt go away.

v77 6y ago

The bigger news from this budget update is that Netflix/Prime avoided a 'Cancon tax', where they would be forced to make more Canadian content for the services, funded by an added levy on consumers in the country. We dodged a bullet there, I certainly don't mind these changes.

bregma 6y ago
I'm old enough to remember when CanCon was brought in to broadcast TV and radio. Lots of business owners whined loudly about having to not import cheap second-hand culture from foreign places and how it cut in to their personal wealth generation capacity. There was a bit of a rough transition (cough Beachcombers cough) but eventually the investment paid off with interest. I wouldn't resent a cultural development fee. It helps maintain a virtual wall across the southern border to protect our delicate assets.
- dblohm7 6y ago
  Is it really effective across all media? Canadian radio is awful IMHO because of CanCon rules: there aren’t enough Canadian artists within a specific radio genre to saturate a station’s quota, so in many cases we end up hearing the same artists repeatedly throughout any given day.
  - throwaway201103 6y ago
    Bieber fatigue?
    - dblohm7 6y ago
      Try Nickelback! Shudder
  - bregma 6y ago
    That was the argument used 50 years ago. It hasn't been true for about 40 years. Unless your genre is "American pop artists" or maybe "Italian renaissance original instruments".

mattbee 6y ago

Canada still has an exemption for small suppliers not to pay sales tax, so this provides a strong incentive for those to find ways to take bookings outside of Airbnb. Does an owner-operated web site count as a "digital platform"? What about a centralised telephone booking service? Or does it just mean "anything that's big enough to be targeted as one entity by government"? It seems clumsy to tax the booking method rather than the supply itself, but maybe it's a matter of practicality for tax collectors.

ryanbrunner 6y ago
I don't think this is such a bad thing. If AirBnB's role of the relationship isn't worth the premium you pay to cover taxes, that's a pretty strong argument that AirBnB isn't really providing much value and we'd be better off without a middleman in this relationship (I think for what it's worth that this probably isn't true, and people will happily pay 5-15% to be able to deal directly with AirBnB)
- mattbee 6y ago
  Airbnb already charge VAT (in the UK at least) on the host service fees, i.e. the 15% of the transaction they keep for themselves. So Airbnb already charge for their service, and they're taxed on it. What's new is taking GST (or VAT) on the accommodation too, which is normally paid over to hosts direct, and who have to remit VAT only if they were over the "small trader" threshold (in the UK that is not many).

xutopia 6y ago

I benefited from AirBnB and I am glad this is in place. Now hotels have no excuses but to offer better services or better price.

hasuej 6y ago
Yep, this is great for AirBNB hosts. It legitimizes the service and gives people a predictable/regulated way to run their rentals.