As a host, understanding your tax obligations is essential for maintaining legal compliance and protecting your rental business. This guide explains how to properly declare your rental income and meet the tax reporting requirements mandated by both authorities and rental platforms.

General Tax Return Obligations

All income generated from short-term rentals must be reported on your annual tax return in accordance with local tax laws in your jurisdiction. This applies regardless of whether you rent through a platform or directly to guests.

Rental-related expenses such as utilities, repairs, and management fees may be deductible depending on the tax rules in your country. However, what you can deduct depends on your tax residency, legal entity, and the applicable tax regime. We strongly encourage you to consult a tax professional to understand which costs are eligible for deduction in your specific jurisdiction.

Keeping detailed records is critical. Maintain comprehensive documentation of earnings, expenses, and supporting invoices for each property and booking. This documentation will be essential when filing your tax return and in case of any audit or inquiry from tax authorities.

Many countries classify rental activity as either personal or business income, and local regulations determine whether your activity is classified as professional or non-professional based on specific criteria such as the number of properties, income volume, or days rented. In many jurisdictions, registering as a business is a legal obligation rather than a voluntary choice once certain thresholds are met. Review your local regulations to determine your classification and registration requirements.

Platform-Specific Tax Reporting Requirements

DAC7 Reporting (EU-wide Directive)

DAC7 is an EU-wide directive that requires platforms to collect and share detailed income information with tax authorities. This requirement came into effect in 2023.

Under DAC7, platforms including Holidu are required to report the following information to tax authorities:

• Your identification data, including your Taxpayer Identification Number, address, date of birth, and if applicable, your company's Commercial Registration Number
• Complete identification and address of your property
• Your total revenue earned
• Platform fees, commissions, or applicable taxes per property
• Total number of days booked per property

You should ensure that the information in your host profile is accurate and up to date, as this data is used for tax authority reporting. If you need to verify what information has been reported, you can download your tax return summary from your account.

Cedolare Secca (Italy)

The Cedolare Secca is a substitute flat-rate tax for rental income in Italy, including income earned via platforms. This simplified tax regime applies to residential property rentals and offers an alternative to standard income tax treatment.

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. This withholding is applied automatically in certain circumstances.

Cedolare Secca Withholding Tax Application:

For private hosts without a VAT number or commercial registration, we apply the Cedolare Secca withholding tax by default. This automatic withholding remains in place unless you are considered a professional host by proactively confirming that you own 3 or more properties, or by providing a valid VAT number or commercial registration number.

If you meet the criteria for professional host status, you should update your host profile accordingly to ensure the correct tax treatment is applied to your account.

How to Download Your Tax Information

Download Your Tax Return Summary

To access your tax return summary, follow these steps:

1. Log in to your Holidu account
2. Click on the Account section located on the top right side of your dashboard
3. Scroll down to find Your reports & certificates
4. Download your tax summary document

This document summarizes the information that has been reported to tax authorities and can assist you in preparing your personal tax return. However, it does not replace your obligation to file a complete tax return with your local tax authority.

Download Your Booking Invoices

If you need your individual booking invoices for record-keeping or accounting purposes, you can easily download them by following these steps:

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

Keep these invoices organized and stored safely, as they serve as supporting documentation for your rental income and any related expenses.

Important Considerations for Tax Compliance

Filing incomplete or inaccurate tax returns can trigger audits and result in complications with tax authorities. It is therefore essential to ensure your documentation is thorough and accurate.

Tax regulations and reporting obligations may change annually depending on regulatory updates in your country or region. We recommend staying informed about changes that may affect your tax obligations as a short-term rental host.

If you receive requests or notifications from Holidu or other platforms regarding your tax information, respond promptly and supply any required documentation. Failing to do so may result in withholding of funds or account restrictions.

Best Practices for Tax Management

• Declare all rental income earned through any channel, whether booked through platforms or directly with guests
• Maintain organized records of all earnings, expenses, and supporting documentation
• Download and save your earning statements and invoices from Holidu regularly
• Keep receipts for all rental-related expenses you plan to deduct
• Consult with a local tax advisor who understands short-term rental regulations in your jurisdiction
• Review changes to local tax regulations annually to ensure ongoing compliance
• Verify that your host profile information is accurate and current, as this data is used for tax reporting

Summary

As a host, you have a responsibility to declare all rental income and comply with both local tax laws and platform-specific reporting requirements. Platforms like Holidu report host earnings to authorities under regulations such as DAC7 and country-specific rules like Italy's Cedolare Secca. By maintaining detailed records, regularly downloading your earning statements, organizing expense receipts, and consulting with a tax professional, you can ensure full compliance with your tax obligations and protect your rental business. Stay updated with regional compliance changes to maintain good standing with tax authorities.

If you have specific questions about your tax situation or need assistance navigating your account features, please reach out through the Assistant available in your Holidu account.