German tax investigators take aim at Airbnb – voluntary disclosure a way out

News  >  German tax investigators take aim at Airbnb – voluntary disclosure a way out

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Airbnb hosts are risking trouble with the tax authorities if they fail to properly declare their rental income in their tax returns. They can respond by submitting a voluntary declaration.

In the latest chapter in the fight against tax evasion, Hamburg’s tax investigation office has turned its attention towards Airbnb hosts and retrieved the booking details of around 56,000 hosts based in Germany. Sources such as Manager Magazin have reported on information provided by Hamburg’s tax investigation office, according to which the total revenue from these bookings in terms of rental income amounts to more than one billion euros. The data has been passed on to the relevant regional tax authorities.

Anyone who has failed to properly declare rental income in their tax returns should expect to be charged with tax evasion. A voluntary declaration can have a mitigating effect or even lead to immunity, notes commercial law firm MTR Legal Rechtsanwälte.

Those who choose to rent out apartments through platforms such as Airbnb need to pay tax on the rental income. The only exception to this rule is if the income does not exceed 520 euros in the tax assessment period.

Airnbn hosts who have given a less than accurate account of their income still have the option of submitting a voluntary declaration with the chance to emerge unpunished or with a simple slap on the wrist.

For a voluntary declaration to be capable of leading to immunity it needs to be submitted on time and be comprehensive, meaning that tax authorities should be able to ascertain the facts and circumstances without having to conduct further investigations. In the event that the tax evasion has already been discovered by the authorities, it is still possible for the declaration to have a mitigating effect.

However, it is important to note that the legislature has set the bar high for a voluntary declaration to be effective. Even minor errors have the potential to render the declaration ineffective and leave those concerned open to a conviction for tax evasion. To avoid this outcome, it is advisable to seek out lawyers who are versed in tax law and who have experience dealing with voluntary declarations. They will know which details need to be included in the declaration for it to have the intended effect, and they can be trusted to handle such cases with discretion.

MTR Legal’s team of tax experts can help in preparing a voluntary declaration.

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