Tax Return

As a host, you are responsible for properly declaring your rental income and meeting the tax reporting requirements set by both local authorities and the platforms you use. Understanding these obligations helps you stay compliant and ensures smooth operation of your rental business.

General Tax Return Obligations

All income earned from short-term rentals must be reported on your annual tax return in line with local tax laws in your jurisdiction. Understanding your tax obligations is essential for maintaining compliance and protecting your hosting business.

Income Declaration Requirements

• All rental income must be declared on your annual tax return according to local regulations
• Rental-related expenses such as utilities, repairs, maintenance, and management fees may be deductible depending on the tax rules in your country
• The specific deductions available to you depend on your tax residency, legal entity status, and the applicable tax regime in your jurisdiction
• Consult a tax professional to understand which costs are eligible for deduction in your specific region

Documentation and Record-Keeping

Maintaining detailed and organized records is critical for tax compliance. Keep comprehensive documentation including:

• Complete records of all earnings from each property and booking
• Detailed expense documentation and supporting invoices
• Bank statements and payment records
• Booking confirmations and guest information

Professional vs. Non-Professional Classification

Many countries treat rental income as either personal or business income, requiring declaration regardless of whether you use intermediary platforms. Local regulations determine whether your activity is classified as professional or non-professional based on criteria such as:

• The number of properties you own
• Total annual income volume
• Number of days properties are rented annually
• Whether you are registered as a business entity

In many jurisdictions, registering as a business is a legal obligation rather than a voluntary choice once specific thresholds are met. Review your local tax authority guidelines to determine your classification status.

Platform-Specific Tax Reporting Requirements

DAC7 (EU-wide Directive)

DAC7 is a European Union directive requiring platforms to collect and share detailed host income information with EU tax authorities. Holidu complies with these requirements and reports the following information to authorities starting from 2023:

• Identification data of the host including Taxpayer Identification Number, address, date of birth, and company Commercial Registration Number if applicable
• Identification data of the property including complete address
• Total revenue earned by the host
• Fees, commissions, or tax per property
• Total number of days booked per property

This information is reported annually to help authorities monitor tax compliance across the European Union. While platforms may provide annual reports summarizing this information, such reports support but do not replace your personal obligation to file your tax return with local authorities.

Cedolare Secca (Italy)

The Cedolare Secca is a substitute flat-rate tax for rental income in Italy, including income earned through rental platforms. This simplified tax regime applies to certain rental arrangements and provides an alternative to standard income tax calculation.

Tax Withholding Process

Italian platforms and international platforms operating in Italy may be required to withhold part of the tax and remit it to Italian authorities on behalf of hosts. Holidu applies Cedolare Secca withholding tax by default to private hosts without a VAT number or commercial registration.

This automatic withholding remains in place unless you are considered a professional host. You can change your status and potentially avoid withholding by:

• Proactively confirming that you manage 3 or more properties
• Providing a valid EU VAT number
• Providing a commercial registration number

Once you provide this information, your withholding status will be updated accordingly in your account.

How to Download Your Tax Return Summary

Holidu provides you with documentation to support your tax filing process. To access your tax return summary:

1. Log in to your Holidu account
2. Click on the menu icon in the top right corner
3. Select Account
4. Scroll down to the section labeled Your reports and certificates
5. Download your annual tax report

Downloading Booking Invoices

If you also need individual booking invoices for your records or tax preparation:

1. Log in to your Holidu account
2. Click on the Financial tab in the left-side menu
3. Select the Invoice section
4. Download the invoices you need

Keeping copies of all invoices and booking documents provides additional documentation for your tax records and can be helpful during tax authority reviews.

Important Considerations

Tax compliance is an ongoing responsibility that requires attention and proper documentation. Keep the following points in mind:

• Filing incomplete or incorrect tax returns can result in audits, penalties, and fines from tax authorities
• Tax regulations and reporting obligations may change annually in your jurisdiction
• Stay informed about regulatory updates in your country to ensure continued compliance
• If you receive requests or notifications from Holidu or other platforms regarding your tax information, respond promptly and supply any required documentation
• Failure to respond to tax-related requests may result in withholding of funds or account restrictions
• Consider consulting with a local tax professional who understands rental income taxation in your specific region

Summary of Key Points

Proper tax return filing protects your hosting business and ensures compliance with legal requirements:

• Declare all rental income in accordance with local tax laws
• Keep comprehensive records of earnings, expenses, and supporting documentation
• Understand whether your rental activity is classified as professional or non-professional in your jurisdiction
• Be aware that platforms like Holidu report earnings to authorities under regulations such as DAC7 and Cedolare Secca
• Download and review your annual tax reports from your Holidu account
• Maintain copies of all booking invoices and expense receipts
• Consult with a local tax advisor for guidance specific to your region and tax situation
• Monitor regulatory changes to stay compliant with evolving tax requirements

If you have questions about downloading your reports or need assistance with your Holidu account, please use the Assistant feature in your account dashboard for support.