Information for Withlocals hosts – Taxation and value added tax
Withlocals is an online marketplace platform where demand (travelers) meets supply (local hosts)
When a traveler makes a booking through the Withlocals platform, two contractual relationships are established and therefore should be recognized for taxation and/or value added tax purposes.
Contractual relationship #1: between Withlocals and the host (you)
Withlocals provides hosts with a service by enabling them to connect and offer their services to travelers. By using Withlocals’ services, a direct contractual relationship is established between Withlocals and you (the host) in which Withlocals provides a service to you as a host for which you will receive an invoice from Withlocals. On this invoice, value added tax will be calculated depending on several variables, E.g. your country, if you are a private person or a business. Any amounts received by Withlocals from the traveler on your behalf will be passed on to you after deducting any invoices you have to pay to Withlocals.
Contractual relationship #2: between the host (you) and the traveler (guest)
In addition, as a host, you offer your services (experiences, tours and activities) to the traveler and a direct contractual relationship is established between you (as a host) and the traveler. As a host you are responsible to hand the traveler a receipt/invoice after the services have been performed and to make sure all applicable taxes (sales tax, value added tax, any other (local) tax) are calculated.
By offering your services as a host to the traveler, you earn income. You are solely responsible for paying any income tax, value added tax, corporate income tax or any other tax to the respective tax authorities applicable in your country.
Offering services as a private person
If you are a host offering your services to travelers as a private person, you are not allowed to charge value added tax on your services and you are also not allowed to deduct value added tax for expenses paid. Your net income (after deducting expenses) should be reported as income with your local tax authorities for them to establish the amount of income/personal tax you have to pay.
Offering services as a business
If you are a host offering your services to travelers as a business, normally you are allowed to charge value added tax on your services and you are also allowed to deduct value added tax for expenses paid. Your net income (after deducting expenses) should be reported as income with your local tax authorities for them to establish the amount of corporate income tax you have to pay as a business
Other important notes
If you purchase certain goods and services from external parties (E.g. food, entrance tickets, etc..) to incorporate into your services performed for your traveler, normally these expenses would be deductible from the income you earn, thereby reducing your tax bill.
For your tax declaration it is important to save all receipts and invoices you receive and issue
regarding the services offered to you by Withlocals , the services offered by you to the traveler and any expenses paid.
Please make sure you take a close look at the local taxation and value added tax rules and guidelines in your country. Even though we as Withlocals will try in any way possible for you to get it right, you and yourself are solely responsible for declaring and paying all taxes on the services you perform for the travelers.