Apartment rental through Booking and Airbnb

Apartment rental through Booking and Airbnb

 

Question:
Hello!

I own 30% of an apartment, which I intend to rent through the Booking and AirBnb platforms. What is the option for me to declare the rental income in the GTD without categorizing the site under the law on tourism?

As far as I understand, in all possible options I have to pay VAT for the commission that the platform receives from me. How exactly is this VAT declared and paid if I want to use a runway or an electronic signature?

Can you explain to me how taxes are reported, if I register a company, should the property be transferred to this company?

Thanks in advance!

 

Answer:

Hello,

If you are renting an apartment, through Booking or Airbnb you are required to register for VAT for the following reason - you receive a service provided to you by a person registered outside Bulgaria. According to the VAT law, this requires your registration for VAT and the respective accrual and payment of the due VAT in the Republican Budget. You can register for VAT, both as an individual and as a legal entity (company). We recommend the second option (to register as a company). Then the company must be registered for VAT. Please note that VAT registration must be at least 7 days before receiving the service (in your case before receiving the invoice from Booking or Airbnb). Since the apartment for rent is owned by a natural person / persons, they must rent this apartment to the company. From now on, the company will be able to use the apartment to carry out its commercial activities - renting it for overnight stays.

From a tax point of view, the following awaits you. You will have to pay 20% VAT per month on the amount of commission or Airbnb commission invoices (respectively in the months when you do not have invoices, you will not pay VAT). In the months in which the company operates (if, for example, you rent the apartment only seasonally), the manager of the company will have to pay social security contributions. At the end of the year, if the company has made a profit, you will have to pay 10% tax on the amount of profit. The profit is determined by deducting from the realized income the expenses recognized for your activity (commissions from Booking or Airbnb, the rent you pay to the individual, consumables for the apartment, etc ...). If you want, as the owner of the company, to take the already realized profit after the paid tax as your income, you will have to pay an additional 5% dividend tax.

Separately, the individual / persons who rent the apartment to the company will have to pay 10% tax on rental income. This income is reduced by 10% of legally recognized expenses and 10% tax is charged on the amount thus obtained. However, this tax is withheld by the company that pays the rent to the individuals and is paid by it every 3 months.

We hope we have been helpful.

Greetings!