VRBO VAT Nightmare

OTA = Online Travel Agency, which means those sites that sell the booking and take the payment for you.
User avatar
Casscat
Posts: 2692
Joined: Sat Jul 05, 2014 10:43 pm

VRBO VAT Nightmare

Post by Casscat »

I was really chuffed to get my first booking via VRBO/Expedia overnight, but when I went into the details I was more than surprised to see my net revenue to be markedly lower than that I would expect for the same booking via my other sites. Once I'd drilled into it I saw that UK VAT had been deducted, so I got onto VRBO chat to sort it out. Easier said than done!!! When I decided to list on VRBO I went to the UK site because English is my first language and even after seven years in Spain my Spanish remains more than a bit ropey. VRBO have a migration service to makes things super-easy if you already have a listing with a competitor, and I had a very productive chat with a nice Irish chap who helped me set everything up after he had dragged across everything he could from Booking.com. He was, I should emphasise, very much aware that the property is in Spain and I am in Spain. Fast forward to my VAT query. The chatline bod insists that I should have listed on vrbo.es and furthermore to do so I will have to remove my listing and start all over again. I argued that even if I lived in the UK I still would not be liable for VAT as I am a private owner and not a business, but she was wholly unmoved. I asked to sign whatever declaration might be needed to state my exemption from VAT in the UK (and IVA in Spain) to no avail. I am both baffled and furious. My listing, although created on the UK site, is listed across the entire VRBO network in all countries under the appropriate .es, .de, .it tag. Anyone else had this experience?
newtimber
Posts: 1945
Joined: Sat Nov 24, 2012 5:57 pm
Location: Brighton
Contact:

Re: VRBO VAT Nightmare

Post by newtimber »

I think the problem is that VRBO think you are a UK owner of an EU property overseas. If you were, then you would be required to register for VAT in that country. See http://www.marcusward.co/vat-overseas-h ... warning-2/
User avatar
Casscat
Posts: 2692
Joined: Sat Jul 05, 2014 10:43 pm

Re: VRBO VAT Nightmare

Post by Casscat »

newtimber wrote: Thu Jun 16, 2022 2:05 pm I think the problem is that VRBO think you are a UK owner of an EU property overseas. If you were, then you would be required to register for VAT in that country. See http://www.marcusward.co/vat-overseas-h ... warning-2/
I still don't get it. Notwithstanding the fact that I registered with my Spanish address and Spanish tax ID, when I did have an overseas property (here in Spain) but was still living and working in the UK I did not need to register for VAT in either country. The rules in Spain are similar to the UK - revenue from self catering accommodation owned by a private individual is not VAT-able and the income is treated for tax purposes as personal earnings, not corporate. Also VRBO are deducting UK VAT, not Spanish IVA. They are taking tax from me and paying it to an entity with which I have no relationship!! They told me I needed proof that I do not have to be VAT registered (in the UK) and then they said that actually I should not be on their site at all.
newtimber
Posts: 1945
Joined: Sat Nov 24, 2012 5:57 pm
Location: Brighton
Contact:

Re: VRBO VAT Nightmare

Post by newtimber »

Not true in UK. Holiday lets are a business activity. If your gross earnings are more than the VAT threshold, then you do have to register and pay VAT in UK. The thing is that the VAT thresholds are £85K in the UK so unless you own a few holiday lets you don't reach that threshold. VAT thresholds are lower in Spain and for overseas owners they are 0.
User avatar
Casscat
Posts: 2692
Joined: Sat Jul 05, 2014 10:43 pm

Re: VRBO VAT Nightmare

Post by Casscat »

I have an accountant in Spain, and he would advise me of my responsibilities, but no other site deducts VAT/IVA. All I had to do was declare that I was a private individual and basically take responsibility for my own personal liabilities. Seems fair enough to me. The net sum VRBO is paying me barely makes it worthwhile renting at all.
User avatar
CSE
Posts: 4414
Joined: Mon Nov 06, 2006 3:34 pm
Location: Galicia

Re: VRBO VAT Nightmare

Post by CSE »

The Spanish rules for charging IVA (VAT) are not the same as the UK.

I found this very long explanation in Spanish.
https://asepyme.com/alquiler-vivienda-u ... _alquilada

One thought; is this VAT charge related to the commission the portal charges you? They provide a service and they are obliged to charge taxes on that. The rate of that is dictated by the country the portal has it's presence in.
This VRBOs words on this.
https://www.vrbo.com/es-es/ayuda/articl ... a-HomeAway
Item 12 states you are responsible for collecting taxes.
https://www.vrbo.com/es-es/legal/termin ... opietarios

I would suggest you talk to your Gestoría too.
Never try to out-stubborn your guests.
User avatar
Casscat
Posts: 2692
Joined: Sat Jul 05, 2014 10:43 pm

Re: VRBO VAT Nightmare

Post by Casscat »

I guess I'll just hike my prices. Not great for VRBO/Expedia users though!
User avatar
paolo
Posts: 3885
Joined: Thu Jun 17, 2004 1:18 pm
Location: Provence, France
Contact:

Re: VRBO VAT Nightmare

Post by paolo »

Isn't this just the normal VAT you pay on services whether in UK or EU? And nothing to do with being VAT-registered?
Paolo
Lay My Hat
User avatar
CSE
Posts: 4414
Joined: Mon Nov 06, 2006 3:34 pm
Location: Galicia

Re: VRBO VAT Nightmare

Post by CSE »

paolo wrote: Mon Jun 20, 2022 8:00 pm Isn't this just the normal VAT you pay on services whether in UK or EU? And nothing to do with being VAT-registered?
That is what asked about too.
CSE wrote: Thu Jun 16, 2022 3:37 pm One thought; is this VAT charge related to the commission the portal charges you? They provide a service and they are obliged to charge taxes on that. The rate of that is dictated by the country the portal has it's presence in.
This VRBOs words on this.
https://www.vrbo.com/es-es/ayuda/articl ... a-HomeAway
Item 12 states you are responsible for collecting taxes.
https://www.vrbo.com/es-es/legal/termin ... opietarios
Never try to out-stubborn your guests.
Post Reply