The tax office is on standby for tax evasion in short-term rentals

The tax office is on standby for tax evasion in short-term rentals

The opening of borders after apparently dealing with the pandemic crisis has soared short-term rentals across the country. Tourism is at historic highs, dragging the economy and government revenues along.

However, the tax administration is on the alert, knowing that many short-term rental property managers will attempt to cash in on the crisis. On the one hand, it has the data from the online platforms for the reservations that have been made, while on the other hand, it checks the bank accounts to see if there are deposits that were made directly, that is, without showing the reservation on any platform. Of course, what was paid “under the table” is difficult to detect by the tax authorities.

However, even in these cases the tax authorities have their way. That is, when it finds that a property is unavailable, but without a reservation on Booking or Airbnb, it carries out emergency checks, especially if it is a very expensive property, to see if someone lives in it and the conditions of the short-term rental are respected.

According to the legislation (provisions of Art. 111 of Law 4446/2016 and Art. 39A of Law 4172/2013), the provisions of the law refer exclusively to Short-Term Leases carried out in the context of the “sharing economy” , i.e. real estate leases concluded through digital platforms for a specific period of time, less than a year, and when no other services are provided than accommodation and the provision of bed linen. Especially in the case of “Short Term Lease”, “digital platforms” are those that provide specialized tools for concluding the lease electronically and are not limited to viewing the “property”. Therefore, any short-term leases entered into privately and not through a platform are not subject to the specific provisions and are treated as common civil leases, unless they are accompanied by ancillary services, in which case they are treated as a business activity. However, if someone rents out their property on a Short-Term Rental basis, but does not do so through digital platforms, they are not required to register with the Short-Term Property Registry. However, these leases are declared with a Real Estate Lease Information Statement.

In any case, property managers who are active in short-term rentals have obligations towards the tax authorities. In order for interested parties to know exactly what to do, relevant questions and answers are listed regarding the above leases and what procedures they must follow when, for example, a reservation is canceled or how to delete one’s property from the AADE platform. Particularly:

When is the “Short-Term Residence Declaration” submitted?

Short Term Stay Declarations are submitted by the 20th of the following month from the day the tenant leaves the “Property”. E.g., for a Short Term Lease concluded with an arrival date of 25/11/2020 and a departure date of 28/11/2020 the declaration must be submitted by 20/12/2020 at the latest.

Should zero Short Stay Declarations be submitted if there are no departures in the previous month?

No. There is no obligation to declare zero. Declarations are submitted by the 20th of each month, as long as there was a departure (or cancellation) in the previous month.

I have registered a Short Term Residence Declaration and then it was cancelled. What actions should I take?

In case of cancellation of the short-term rental for which a Short-term Stay Declaration has already been registered, an amending Short-term Stay Declaration must be submitted by the 20th of the month following the cancellation, whether or not payment of an amount is provided for by the lessee based on the cancellation policy. If an initial Short-Term Residence Declaration has not been submitted, an initial Short-Term Residence Declaration must be submitted by the 20th day of the month following the cancellation, by selecting the special field in the application, only in the case that based on a cancellation policy payment of rent is provided by the lessee.

When a Property Manager stops managing it, can they remove the compared property from the Register?

Yes, when for any reason the Property Manager stops their Short Term Lease, they can go into Taxisnet and stop it immediately. The time limit he has to make the break is defined between the date of the last short-term rental and the start date of submitting the income tax returns of the corresponding tax year.

How can a Property Manager do Short Term Rentals in the context of the sharing economy?

In order for the Property Manager to carry out Short Term Rentals, they must:

a) To enter with his personal Taxisnet codes in the Short-term Accommodation Property Registry maintained on the website in order to register the property and obtain a Property Registry Number (RMA). It is clarified that the registration is carried out per rented “Property”, as defined in POL.1187/2017.

b) Post the Property Registry Number (PRN) on the digital platforms of the sharing economy, as well as on any media.

c) To submit the Short-Term Residence Declaration by the 20th of the following month from the day of the tenant’s departure from the property.

d) To register an aggregated, per property, Short-Term Accommodation Declaration, until the last day of the third month from the start of operation of the “Register of Short-Term Accommodation Properties”, where it will include all short-term leases concluded from 1/1/2018 to and the start date of the application of the Short-term Accommodation Property Register (POL.1170/2018).

Source: Capital