The government of Quebec has reached an agreement with Airbnb to collect an accommodation tax (TSH) on all rentals in the province in what is being described as the first ‘tourist tax’ on online lettings in Canada
Under this agreement, from 1 October, Airbnb will collect TSH at 3.5% on all rentals from the first night, for stays of 31 days or less, and send it to Revenu Québec quarterly. The company will also forward to Revenu Québec information on the amounts collected for each of the tourism regions.
Since its introduction in 1997, TSH has raised over C$641m (£394m) in net revenues for 21 of the 22 tourism regions, including C$64.2m (£39.5m) in 2016/2017.
The sums collected are returned to the regions covered by the Ministère du Tourisme on a quarterly basis. TSH represents more than 50% of the budget of regional tourism associations for tourism promotion and development.
Revenu Québec has set up a team of 25 inspectors to raise awareness and ensure landlords meet with the new regulations.
Julie Boulet, minister of tourism, said: ‘The agreement is positive for the future and the tourism development of Quebec, as it will allow taxation to be adapted to the new collaborative and digital economy.
‘It is a response to concerns expressed by the tourism industry and will help to ensure healthy competition in the accommodation sector.’
Alex Dagg, public policy manager for Airbnb in Canada, said: ‘This fiscal agreement, the first of its kind in the country, marks an important and defining milestone for Airbnb in Canada and is a fine example of the partnerships Airbnb and government representatives can build.
‘Over the past year, Airbnb has facilitated the travel of nearly one million travelers to Quebec. We are pleased to be able to help the province benefit from the economic spin-offs of residential sharing.’
Airbnb estimates suggest the province would have recouped $3.7m last year if the tax had been put into effect. There are 22,300 active hosts in Quebec who, on average, rent out a listing around 38 times a year and collect about $2,600.
Other transactional collaborative platforms in the hosting sector will also be able to collect TSH.
André Fortin, member of Parliament for Pontiac and parliamentary assistant to the Minister of Finance, said: ‘By allowing the collection of the tax on accommodation directly at source, this agreement emphasises the importance of tax fairness and healthy competition between landlords.
‘For our government, it is essential that e-commerce and new technologies integrate into tax structures to ensure that everyone pays their fair share of public service funding. We want to participate in the structuring of the collaborative economy, rather than to slow it down.’
Report by Pat Sweet
