3 ms·

I don't really understand your objection. Tax withholding is in no way specific to income tax. For example, it is not uncommon for that to happen for dividends

by jsnell 3y ago

I don't really understand your objection. Tax withholding is in no way specific to income tax. For example, it is not uncommon for that to happen for dividends and interest, despite there being no employment relationship there. Even VAT is a withholding scheme at heart, which makes your restaurant example kind of funny :) The VAT on that meal you eat at a restaurant is paid by you as the consumer, but collected and paid to the tax authorities (i.e. withheld) by the restaurant.

pests 3y ago
Honest question - how does it work in that situation with a third party like food delivery? You pay the food delivery company who pays the restaurant. The food delivery is going to take taxes from you I assume, but do they then pay taxes to the restaurant too who goes on to pay them? Isnt AirBnB like the delivery driver in this situation? DoorDash, in America for example, collects the tax for the food, passes it to the restaurant, who pays their own tax. Isn't AirBnB giving the collected tax money to the homeowner so they can pay correctly? I have no clue how it works over the pond so apologies if these are dumb questions.
- locallost 3y ago
  If you pay the delivery they will pay the full VAT of the total amount, but will get refunded on the VAT they pay for the restaurant goods. Thus every business only pays the tax on the value added. Not sure if this is how food delivery actually gets paid, but if you pay them and they pass the money to the restaurant then yes. If they pass the full amount to the restaurant their VAT paid us effectively zero. But this case is not about VAT, but a rental tax. If Airbnb collects the money then I don't see why they wouldn't just pay the tax. I mean I know why - they don't want to include it in the price and make their product artificially cheaper by ignoring regulation, but tough luck.
- arlcode 3y ago
  You pay full tax for the food + delivery. The delivery company pays VAT for the food and can substract that from their own VAT liabilities. In a strict B2B context it's also possible to do a net payment and that's why some (EU) stores will ask if you have valid tax id.

by jsnell 3y ago

pests 3y ago

Honest question - how does it work in that situation with a third party like food delivery? You pay the food delivery company who pays the restaurant. The food delivery is going to take taxes from you I assume, but do they then pay taxes to the restaurant too who goes on to pay them? Isnt AirBnB like the delivery driver in this situation? DoorDash, in America for example, collects the tax for the food, passes it to the restaurant, who pays their own tax. Isn't AirBnB giving the collected tax money to the homeowner so they can pay correctly? I have no clue how it works over the pond so apologies if these are dumb questions.

locallost 3y ago
If you pay the delivery they will pay the full VAT of the total amount, but will get refunded on the VAT they pay for the restaurant goods. Thus every business only pays the tax on the value added. Not sure if this is how food delivery actually gets paid, but if you pay them and they pass the money to the restaurant then yes. If they pass the full amount to the restaurant their VAT paid us effectively zero. But this case is not about VAT, but a rental tax. If Airbnb collects the money then I don't see why they wouldn't just pay the tax. I mean I know why - they don't want to include it in the price and make their product artificially cheaper by ignoring regulation, but tough luck.
arlcode 3y ago
You pay full tax for the food + delivery. The delivery company pays VAT for the food and can substract that from their own VAT liabilities. In a strict B2B context it's also possible to do a net payment and that's why some (EU) stores will ask if you have valid tax id.