Next year will see the entry into force of legislation that will obligate Airbnb, Bolt, Etsy and other similar platforms to present the Tax and Customs Board (MTA) with income data for all sellers and service providers.
Tallinn City Apartments rents out 75 apartments in Tallinn's Old Town. The company's reception desk is swamped as the school break in Finland means most of their apartments are in use.
The owner started with his own apartment ten years ago when he discovered the Airbnb platform. By today, almost all of Tallinn City Apartments' turnover comes from Airbnb, booking-com and other platforms.
Unlike many other rental accommodation providers, the firm reports its income. At a turnover of around €2 million, Tallinn City Apartments paid €50,000 in income tax last month.
"This has been left up to users' own diligence and conscience. There are those who fail to pay taxes out of ignorance, while others are doing it on purpose," Mihkel Randrüüt, owner of Tallinn City Apartments, said.
Randrüüt welcomes legislation to put the market in order as those who do not pay taxes currently enjoy an advantage.
"On the one hand, it will bring equal opportunity and take away the competitive edge of tax dodgers. On the other, it will make life easier for those who already pay taxes by taking care of some of the red tape," Randrüüt said.
Taxi and food courier services mediator Bolt was not prepared to give an interview to "Aktuaalne kaamera" news as the company is still in talks with the tax board. Competitor Wolt claims that the directive will change nothing for the company because they have been registering their activities at the MTA for over six years.
The Wolt platform is used by around 2,000 couriers for whom the company paid over €3.5 million in labor taxes last year.
Around half of our couriers have an employment contract, meaning we pay all of their labor taxes. Those working with an entrepreneur account or through another legal body are obligated to pay their own taxes, while we report all of their sales to the tax authority," Liis Ristal, head of Wolt Baltic, said.
Spokespeople for the Tax and Customs Board said that platforms constitute a gray area in taxation. While some platforms, such as Wolt, voluntarily declare all transactions, Estonia is missing out on the lion's share of tax revenue from such businesses.
"Statistics suggests it amounted to €13.5 million in 2021, and because we know it was €2 million less the year before, the trend is pointing upwards. We know that around one-fifth of total revenue is reported. In other words, a lot of income goes unreported and taxes unpaid," said Annika Oja, head of natural persons services at MTA.
Once the law enters into force, all platforms will be obligated to declare partner income and will be held responsible for any failure to pay taxes. The authority urges people who use platforms to make money to get up to speed on tax matters as the tax obligation is universal.
Editor: Marcus Turovski