Greetings, Airbnb hosts and other online service providers! We’ve got the scoop on some GST changes coming your way from April 1, 2024!
Here’s the scoop:
Your trusted online platforms, such as Airbnb and others, are now going to be collecting GST on all ‘listed services’. That means your ride-shares, food deliveries, and cozy accommodations will now come with a dash of GST, regardless of your registration status.
Even those extra things, like cleaning fees for your holiday rentals, will join the GST club if arranged through the online marketplace.
Now, let’s dive into examples to ensure everything is crystal clear:
As a GST-registered Airbnb host, if you rent out a property for $100 per night, and Airbnb adds 15% GST, making it $115 for the guest. In your GST return, you’ll include $100 as sales, showing it as a GST zero-rated supply, resulting in $0 GST collected. You can then claim back GST on your purchases and expenses.
If you’re a non-GST-registered host, things shift a bit. You’ll still rent out the property for $100 per night, with Airbnb adding 15% GST, making it $115 for the guest. As you’re not GST registered, $6.50 (6.5% of $100) goes to Inland Revenue, while $8.50 (8.5% of $100) is passed on to you as a flat-rate credit.
What does this mean for your income tax return?
Come tax time, remember to list all your income and business expenses. But don’t fret about including those flat-rate credits in your income tax return—they’re not part of the picture!
For the GST-registered bunch, manage your income and expenses on a GST-exclusive basis. And if you’re not in the GST club yet, stick to a GST-exclusive approach for all your online marketplace transactions, and go GST-inclusive for anything outside.
What if you’re a big-time operator?
And for our big players out there, if you’re running a larger operation, you might have the chance to skip these new rules with a special agreement with the marketplace operator.
Keep those communication lines open! Ensure your online marketplace pals know your GST registration status.
Next Steps
Got any questions or need assistance? We’re here for you! Reach out anytime. Let’s navigate these changes together!