If you are earning an income from guests at an Airbnb, or any other rental income from letting property as an owner, then it is your duty to declare such income to SARS (South African Revenue Services) when doing your tax returns. This is to ensure tax compliance.

In a recent statement released by SARS, individuals using property for Airbnb purposes are warned to confirm their tax compliance. They allude that this is essential to avoid heavy admin penalties levied under Section 210 of the Tax Administration Act, which are subject to fixed penalties. If penalised and ignored, these penalties can recur for each month that the taxpayer avoids payment.

Furthermore, SARS has advised that they are working to improve their system capabilities to easily detect non-compliance through data analysis. It has been determined that it would be relatively easy for SARS to confirm non-compliance by verifying who owns property, and then possibly cross-referencing to the properties listed on Airbnb. This is over and above the audits SARS already conduct.

SARS is taking a hard and fast approach to those facing non-compliance. If you have yet to declare your Airbnb income, now is the time to do it to avoid heavy penalties in the future. Negative outcomes for this noncompliance not only include administrative penalties and interest but also possible criminal action.

Additionally SARS has stated that they are working hard to make the process easy for compliant taxpayers. Individuals can choose to make use of the Voluntary Disclosure Programme which offers more favourable terms.

At MMS Group we offer professional tax consultant services for both individuals and business to ensure that they meet all rules and regulations set out by SARS for tax compliance.

Get in touch to learn more about our tax services.