Mexico will charge VAT and ISR to Airbnb hosts and other hosting platforms

A further step in the regulation of digital accommodation platforms is underway, with the modifications issued by the Ministry of Finance and Public Credit (SHCP) to the miscellaneous tax, in which the hosts must pay the taxes corresponding to the business activity.

In accordance with the Criteria for the VAT Law, individuals or corporations that grant the temporary use or enjoyment of goods must pay the tax at a rate of 16 percent. The document details what is meant by temporary enjoyment of assets: “the lease, usufruct and any other act, by which a person allows another to temporarily enjoy or use tangible assets in exchange for consideration.”

Although there is an exemption from the income tax of a real estate, it does not apply to spaces: furnished, destined as a hotel or destined as lodging houses. It indicates the document published in the Official Gazette of the Federation.

With this measure, the SHCP officially recognizes the existence of hosts that provide the hosting service through technological platforms and that do not contribute to their VAT payment, qualifying it as an improper practice.

The agency also issued amendments to the Criteria of the ISR Law, which considers the services offered by digital platform hosts, as a business hosting activity, so they will also be subject to the payment of this contribution.

“The lodging contract is given when someone lends the shelter to another through the agreed remuneration, whether or not they agree to provide complementary services … The contract may be tacit or by a signature … In the case of technological platforms, the service is contracted by On certain days, the rate is paid per day and a minimum period is not established for the service to be granted ”, details the document, through which it argues why the hosts must pay ISR. 

Source: nitu

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