The Icelandic sharing economy.

Size: px

Start display at page:

Download "The Icelandic sharing economy."

Ami Woods
6 years ago
Views:

Hotel Stracta Hella The Nordic Unemployment Insurance

1 FAGMENNSKA JÁKVÆÐNI SAMVINNA The Icelandic sharing economy. The Internal Revenue s perspective on the sharing economy. Hotel Stracta Hella The Nordic Unemployment Insurance meeting september 2017 Sveinn Tjörvi Viðarsson Síða 1

Definitions:,,An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet.

2 Definitions:,,An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet. (google),, A sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time. (Investopedia) Síða 2

3 What is shared around the world Apartments and summer houses Cars Bikes Helicopters Lawn Mowers Tools Office space Endless possibilities Síða 3

4 Síða 4

5 Reykjavík Síða 5

6 AIRBNB of Reykjavík Síða 6

1098 users with more then one asset. 1. accommodation 3.064 users. 2. accommodations 529 users. 3. accommodations 246 users.

7 AIRBNB in Iceland Viewed tax footprints of 100 users of Airbnb in January 2017 with 5 or more properties. Users in Iceland (3.778 active) Total registrations users with more then one asset. 1. accommodation users. 2. accommodations 529 users. 3. accommodations 246 users. 4. accommodations 131 users 5. or more accommodations 193 users. 4% of registered properties in Iceland on Airbnb Síða 7

8 Conclusion of analysis Individual Setup regarding taxation Individual + company/induvidual economic activity Company 9% 7% 15% 3% 44% Two or more companies 22% Intermediary No-revenues Síða 8

9 Our customers 15% Individual Setup regarding taxation 15% 3% Individual + company/induvidual economic activity Company 9% 7% 44% Two or more companies 22% Intermediary No-revenues Síða 9

10 Challenges Individuals doing business (million transactions) Image of not being an actual economic activity Individuals starting an economic activity and sometimes developing into something bigger, growing pains. Administrative burdens to make changes of tax returns. Secrecy of the sharing economy platforms. They don t share information. No guarantee between host and owner of property. Many withdrawal possibilities.(banking, western union, prepaid cards, Paypal, ACH-payments and etc.) Síða 10

Studied the platform and tax footprints of users.

11 Effort to open up the secrecy that Airbnb and similar platforms rely on The office has: Requested information from Airbnb. Visited apartments with the police. Requested information from banks and payment services providers. Studied the platform and tax footprints of users. Made several changes to tax returns of companies and individuals. Been open for discussion and given direction to users about how they should return taxes of their revenues. Síða 11

The step for individuals, from earning extra cash to be running a business General rule: All income received by the taxpayer in money or moneys worth is subject to tax, unless it is exempt.

12 The step for individuals, from earning extra cash to be running a business General rule: All income received by the taxpayer in money or moneys worth is subject to tax, unless it is exempt. General measures on running a business Independency Extent and regularity Profit purpose Selling products or services for more then ISK ( EUR) each year Many other rules and requirements both regarding taxation and permits. Síða 12

13 General conditions that an individual needs to fulfill renting out an apartment for ISK each year as an individual. VAT 11% (next year 24%?). New law says it will be delayed until 1. January 2019 and will be 22,5% Presumptive employment income. Declare income from the independent economic activity. Lodging Tax 300 ISK (2,35 EUR) for each unit sold, unit is the rental of accommodation for up to one day. Employer unemployment insurance charge 6,85% of salary of the employee. Payments to pension funds 12% of salaries of employees and 4-8% into voluntary pension funds. Etc. Síða 13

14 Simplification efforts Changes made in the law regarding home sharing (law no. 67/2016). New permit (Home sharing permit) 90. day rule, for two properties. Turnover lower then ISK per year. Changes also made in the law regarding earnings made from home sharing, law no. 59/2017. Earnings made from home sharing, according to law no. 67/2010 under ISK are regarded as capital gains, rules on VAT also changed no VAT on earnings under ISK (was before ISK (7.825 EUR) Síða 14

15 Has Iceland benefitted from the sharing economy It has helped Iceland dealing with the tourist boom. Shortage of hotel rooms in the early stages of the tourist boom New options, summerhouses, trips, super jeeps, It has created a tax base and helped people deal with the aftermaths of the economic crises in It has created value for property owners.(higher housing prices) It has created jobs and it also has taken jobs. Social benefits (people are more in touch with each other) Better use of assets (Can be environmentally friendly) Síða 15

16 Contact info: Sveinn Tjörvi Viðarsson - sveinn.vidarsson@rsk.is Q & A Síða 16

Tax liability for foreigners in Iceland

FAGMENNSKA JÁKVÆÐNI SAMVINNA Tax liability for foreigners in Iceland University of Iceland Foreign staff and students 9 March 2016 Elín Margrét Þráinsdóttir Síða 1 Individuals Tax liability Persons staying