Starting October 1, digital platforms such as Netflix, Spotify and Airbnb will have to incorporate the General Sales Tax (IGV) into their rates. In addition, the recent changes announced by the Executive will allow the National Superintendence of Customs and Tax Administration (Sunat) access detailed information on the behavior of Airbnb users who rent properties to facilitate tax compliance monitoring and enforcement.
According to the Ministry of Economy and Finance (MEF), with this rule, Sunat will be able to identify those natural persons “who habitually rent out several properties, that is, who are engaged in a real estate activity for which they must pay as a business activity.”
International tax specialist and partner at Ecovis Peru, Octavio Salazar, told Gestión that since October Sunat will be able to monitor and verify the income of landlordsgenerated through Airbnb, for the application of Income Tax (IR). “The consequence of this is that some individuals who are currently paying 5% of IR for rental income could start paying 29.5% because they become equivalent to real estate companies for Sunat,” Indian.
Impact on landlords
Airbnb connects people who rent out their properties – such as houses, apartments and rooms – with travelers looking for temporary accommodation. Currently, landlords pay 5% IR on the total income generated per month.
The key factor that will impact Airbnb landlords is the number of properties they rent through this platform. However, there is no exact precision as to when a landlord will be considered to be displaying entrepreneurial behavior and must assume the payment of 29.5% of IR.
“What the auditor does is evaluate case by case and could consider, for example, that if a person has four apartments and rents them through Airbnb It is already behaving like a company; therefore, Sunat would indicate that it should pay 29.5% and not 5%”Salazar explained.
Natural person or company?
There are big differences between renting an apartment through Airbnb and through a real estate company.
On the digital platform, rentals are usually short-term and aimed at travelers or tourists, which offers flexibility and a high turnover of tenants. Meanwhile, renting through a real estate company involves long-term lease contracts, with permanent tenants.
The international tax specialist noted that, In addition, real estate companies maintain accounting and determine an accounting profit, unlike the activity of natural persons.
“If a natural person, in the opinion of Sunat, develops real estate business activity, he would also have to have accounting, submit monthly tax returns, among other tax obligations. It’s a huge world, equating a natural person with a company doesn’t sound like tax justice to me,” he emphasized.
In this regard, he considered that the Natural persons who rent apartments through Airbnb should not be classified as businesses. However, in the event that Sunat considers them as such, the next step must be evaluated.
“If the Sunat has already assigned you a company qualification and you pay taxes as a company, even though you are a natural person, We could analyze which legal vehicle would be most suitable, such as a closed corporation, for example,” he said.
Registration of digital companies in the RUC
Another of the provisions that must be implemented from October is the registration of non-domiciled digital platforms in Peru in the Single Taxpayers Registry (RUC) for the declaration and payment of VAT.
The tax lawyer from Robles Ibazeta Consultores, Alonso Tarazona pointed out that it is unlikely that companies not domiciled in our country will invest in their registration only for the IGV.
“It is a bit illogical that they come to Peru to put the formality of having a RUC here to pay taxes simply because of the VAT issue. because I understand that their capital is not predisposed to make any type of investment here,” he said.
“I put myself in the shoes of a foreign investor who has a successful platform that operates all over the world; I would not focus on making the investment of registering in the RUC just to pay this tax,” he added.
In this context, he considered that around 90% of companies would opt for the easy way out, which is to leave the collection and declaration of VAT in the hands of financial institutions, as also proposed by the regulation, which would add the collection of a new commission that must be assumed by the users.
