Digital platforms (Airbnb, etc.) - Collection of the Lodging Tax in the State of Jalisco

Digital plataforms (Airbnb, etc.) - Collection of the Lodging Tax in the State of Jalisco

A law reform was presented since September 26th that stated that these platforms should be obligated to pay the lodging tax. It was until last October 24th of 2017 that the legislative chamber of the State of Jalisco approved the initiative and launched a decree project, therefore, it is official: The platform will be obligated to collect, withhold and pay the Lodging Tax in the State of Jalisco.

 

The starting date of this obligation is still pending, but we are expecting new information about it on the following days, since it is now the Executive power the one that has to make that decision.

 

These types of digital platforms are part of a new model called “collaborative economy”, in which the platforms are only the intermediaries that put together someone who is “looking” for something with somebody else who is offering the same thing.

 

The hotel sector as the main promoter of this reform

 

This is a discussion that has been going for some time, and the ones that say that they are the most affected by this situation is the hotel sector. They consider that these digital platforms, such as Airbnb, Homeaway, etc. are “unfair competitors”. This is because said platforms are practically offering the same service as a hotel: lodging, but with only a minimal part of the cost.

An established hotel or a guesthouse has to cover a lot of expenses to operate. From the salary of their employees to the taxes they pay. Because of this, their margins are reduced. This does not happen with the digital platforms, since they only have to cover the necessary expenses to keep the place in good conditions.

 

The listings made on this platforms are free, but commissions are charged to both the “hosts” and the “guests” for each booking. This way, the platform is only an intermediary.

 

The main reasons that the hotel sector has to consider these platforms as unfair competition are:

 

  • There is an over-regulation to the hotel sector, meanwhile there is none for the digital platforms.
  • If these collaborative economies activities are not regulated, there is a risk of new monopolies.
  • Since they do not pay taxes, the platforms are taking advantage of the publicity expenses made by the government as well as the hotel sector, without actually contributing with anything.
  • Since these platforms are taking quite a big share of the touristic services market, the hotels are being forced to close job openings because of lack of work, which directly affects the economy of the worker class.

 

What can be expected to happen in the next months?

 

Without a doubt this is only the first step of the authority to start checking more thoroughly these practices. As of now, only the 3% of lodging tax is being considered. But this obligation will give the authority the opportunity to know who is renting properties through digital platforms. And once they have this information, it will be only a matter of time to start matching their databases to determine who is not paying taxes. This obligation, as of now, only applies to some states, but it is safe to assume that it will be applied nationwide soon.

 

Because of this, it is very likely that in the next months the SAT will start with some sort of campaign to invite the hosts of Airbnb and other platforms to register to the RFC and start paying their taxes.

 

If you find yourself in this situation, it is important to start updating your fiscal situation and complying with your obligations to avoid future issues with the authority.

 

If you have any questions or comments, please do not hesitate to contact us.

 

L.C.P. Daniel Ramsés Ramírez Cerecero

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Terán Rojas & Associates.