20. Nov 20

Taxable income from renting via Airbnb – Possibility of voluntary disclosure

Rental income is subject to tax. Those renting out apartments via platforms such as Airbnb need to be mindful of this if they are to avoid committing tax evasion.

Income from renting and leasing is subject to tax. This applies to both real estate companies and private landlords, even if they only occasionally rent out a room or an apartment through Airbnb. The rental income needs to be included in the relevant income tax declaration. Concealing these earnings risks trouble with the tax authorities and allegations of tax evasion. Under these circumstances, those renting out real estate ought to review their legal options, including voluntary disclosure.

Sharing is the order of the day, and this is particularly noticeable in the case of apartments. People who are not using their apartment for a time or who have an empty room are subletting them for a limited period using portals such as Airbnb. While the parties renting out the properties are pleased about the extra income, many of them are not aware that this income is subject to tax if it exceeds the nugatory threshold of 520 euros per annum.

These rental arrangements have not escaped the attention of the German tax authorities, which now require Airbnb to hand over the data. The Hamburg Tax Investigation Office announced at the beginning of September that it has now received the data and will make it available to the relevant state tax authorities.

Lessors who have concealed this rental income are thus potentially facing not only the inconvenience of having to pay tax arrears but also the prospect of tax evasion proceedings. That is why it is vital to take swift action now and assess whether it is still possible to submit a voluntary declaration for tax evasion.

Such a voluntary declaration can only lead to exemption from punishment if the tax evasion has yet to be discovered. If the data from Airbnb has already been received and evaluated by the relevant tax office, this precludes voluntary disclosure from being fully effective. A voluntary declaration can nevertheless still have a mitigating effect on punishment. In addition, it is important for the voluntary declaration to be complete and include all the relevant tax-related information pertaining to the past ten years.

However, it is almost impossible for someone who is not an expert to satisfy these requirements. Lawyers with experience in the field of tax law would be more than happy to assist you in preparing an effective volunta declaration.

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