Tourist tax declaration and payment system

Tax innovations for landlords via Airbnb: city tax administration became easier


Tax innovations for landlords via Airbnb: city tax administration became easier

Procedure for collecting tourist due for landlords via Airbnb has changed

Vilnius became first Eastern European city signed an agreement with Airbnb to collect a pillow tax

The Municipality of Vilnius has signed an agreement with the international short-term accommodation platform Airbnb Ireland UC to collect tourist fees to improve conditions for small local tourism businesses. Starting 1 February 2020, tourists visiting Vilnius are not paying the tourist tax – the so-called pillow tax – to the owner of the house they are renting, as they have done until now. Once the innovation came into effect, Airbnb itself is collecting a tourist tax of €1 per person per night. Flat owners have been responsible for collecting this tax since its inception in July 2018.

The new fee collection procedure made the process easier for both tourists and flat owners using Airbnb. City guests booking an apartment in Vilnius from February 2020 no longer need to make two payments; that is, to pay rental fees through Airbnb and the additional tax upon arrival to the landlord of the rented accommodation. From now on, tourists are only making one payment via the Airbnb platform.

“We are constantly looking for solutions to improve conditions for small businesses in the capital, including people who provide rentals through Airbnb. Therefore, the Tourism and Business Development agency “GO Vilnius” reached out to Airbnb Ireland UC, expressing its wish to cooperate with the platform in the same way it does with other cities around the world – to collect tourist fees on the platform itself. We are delighted that Vilnius has become the first city in North Eastern Europe to establish an agreement of this type with Airbnb“, – says Inga Romanovskienė, Director of Go Vilnius Tourism and Business Development Agency. According to Inga Romanovskienė, this agreement contributed to a better quality of service while reducing the administrative burden for private accommodation providers.  

The new changes do not affect rental accommodation owners who rent their properties out on other platforms – they still are obliged to collect tourist fees and declare their tourist accommodation, then transfer collected fees to the Municipality of Vilnius. Landlord who provides services through several accommodation reservation systems, including Airbnb, is obligated to declare any overnight stays on platforms other than Airbnb.

Changes for landlords through Airbnb

  • Simpler administration at no additional cost to landlords through Airbnb

The owner of the rented property does not require further action once the new tourist tax collection scheme came into force. On Airbnb, a tax payment of €1 per person per night is deducted from the renter’s account and automatically transferred to the Municipality of Vilnius. The amount of money transferred from Airbnb to rental providers remains the same as before and the centralised tourist tax have no impact on landlord revenue.

Once this new process came into effect, residents who rent out their homes through Airbnb also benefits from a reduced administrative burden, as they no longer need to declare the overnight data provided through the Airbnb platform in the system of declaration and payment of tourist dues. 

  • The terms of cooperation do not change

Under the terms of the agreement between the Municipality of Vilnius and Airbnb Ireland UC, the terms of cooperation between private accommodation providers – landlords and Airbnb – remains unchanged.

  • Airbnb itself provides more detailed information

Airbnb had notified landlords in Vilnius about all planned and upcoming changes via a separate notice on its system.

  • The new procedure does not take effect immediately

Landlords had to declare the details of any properties rented through the Airbnb platform and overnight stays by 31 January 2020 and pay according to the system’s prior procedure of declaration and payment of tourist dues.

Changes for tourists

A person booking an apartment in Vilnius through Airbnb is notified of the pillow tax in a separate message. This fee is automatically charged to the joint rental invoice when booking an accommodation.  

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