Is it time for Airbnb to pay the piper?

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It looks like there may be some resistance from the digital giants to the new tax laws.

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Last year, the federal government said it would force companies like Airbnb, Netflix or Amazon to pay HST or GST on sales to Canadian consumers.

This would close a tax loophole on many items and purchases, and the new laws will take effect on July 1.

According to a The Blacklock Reporter story, Airbnb protests that this new tax will not fly.

(Others in the industry, like the Hotel Association of Canada, have been asking for these taxes on Airbnb for years, saying it’s unfair that others in the industry have to pay them when Airbnb doesn’t. don’t.)

Airbnb said it could not meet the July 1 deadline to start collecting the GST, and a lobbyist for the company said the measure could be challenged.

“Viewing platforms as providers of something that they do not actually provide and have no contractual obligation to provide is an inappropriate classification of internationally accepted value added tax and GST principles,” said Nathan Rotman, lobbyist for Airbnb, in a statement to the committee.

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He also said the imposition of the GST on short-term rentals was “questionable for many reasons.”

Bill C-30 – the Budget Implementation Act – proposes that Airbnb collect the five percent federal sales tax effective July 1.

The Department of Finance has estimated potential revenues at $ 65 million per year.

In a 2018 Freedom of Information memo, the Department of Finance estimated that short-term rentals accounted for 10% of hotel room bookings in Vancouver and Toronto.

In a memo, Impact of Airbnb in Toronto and Vancouver , it is written that “More than half of the revenue was generated by hosts who operated more than one Airbnb listing.”

The only thing the experts agree on is that if and when these taxes take hold, prices will go up for the consumer.

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Susie Grynol, President of the Hotel Association of Canada, testified on November 4 before the House of Commons finance committee.

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“Canadian hoteliers pay corporate income tax and have to charge and remit HST, but digital gamers get a tax holiday,” Grynol said.

“Change your tax laws to level the playing field”.

Homeowners who rent some or all of a home through Airbnb, and thus earn more than $ 30,000 per year, are required to register and collect GST / HST on the income they pay. they win.

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