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Complete Guide on How to Declare Taxes for Airbnb Hosts in Japan

Updated: May 16

You have decided to start renting out your property and for this you use the platform. This is an excellent opportunity and in this way you will obtain additional income. However, it is important to take into consideration your tax obligations. In other words, make a declaration of your taxes to the relevant department.

Importance of financial compliance in fulfilling tax obligations
The need to stay on top of tax obligations with the relevant department.

Consider the different legal systems

If you are interested in seasonal rental, it is impossible not to declare your income. It is an obligation from the moment you rent out your apartment or house.

In other words, during your income tax return in May 2022, you will have to incorporate the various incomes that you may have generated through seasonal rental during the previous year, i.e. in 2021.

But before you start calculating your tax, you need to define the legal category. When you rent out furnished accommodation, the profits you record belong to the "industrial and commercial profits" category. Even if this notion may seem strange to you, you should know that it is indeed the case and it is imperative to respect it.

Consequently, you will have to make a declaration as a non-professional furnished renter. As a result, even if you have to declare your income, you should know that the administrative complexity remains lower. But be careful, it is not a question of confusing the income from seasonal rental with land income.

From now on, you know the subtleties when declaring your income. But there is one last element not to be neglected, namely the tax system. You have two options in this regard. That is to say that you declare under the real regime or under the regime of the micro BIC.

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How to file an Airbnb tax return under the micro BIC regime?

Just as there are specific rules for renting in Paris, you will find other administrative obligations when declaring your Airbnb income.

Concerning the micro BIC regime, it remains applicable when you do not exceed the ceiling of 72 600 € of gross income. During this regime, you declare all your income in a gross way. That is to say, the net income as well as the various charges that this generates.

Let's take the example of a rental on the Airbnb platform, the turnover corresponds to your net income, but also the cleaning costs when there are some as well as the costs of the platform, around 3%. On this overall amount, you will benefit from a 50% deduction. However, this is not a tax rebate, but simply a flat-rate deduction to cover the various expenses you have incurred in your rental.

Hence the importance of entering the gross amount and not the net amount. The remaining amount is directly included in the progressive scale of income tax. But there will also be social security deductions, which should not be overlooked.

A little tip: you should know that the minimum amount of the deduction has been capped by the government at 305 €. So if your Airbnb income is less than this amount, you are not liable for income tax. However, it is not up to you to automatically apply the exemption and you are obliged to declare this amount to the tax authorities.

Compliance and reporting. Obligations for Airbnb income.
Understanding of the exemption cap for the minimum deduction.

Example of an Airbnb rental under the micro BIC regime

To illustrate the above, we will take a concrete example. Thanks to your seasonal rental of a second home, you have generated 200 € of income. As seen previously, you are below the limit of 305 € and therefore you have nothing to pay.

Another example, you have your second home which has brought in more than 9000 € of rent. However, you have incurred 1000 € of additional expenses from your own pocket in order to ensure the cleaning. Therefore, the gross amount will be 10 000 €. On this amount, you add the 3% commission of the platform and therefore you have received on your bank account 9700 €.

Concerning the declaration of your income, it is indeed the sum of 10 000 € to declare. Obviously, you do not exceed the ceiling of 72 700 € of income and therefore you are on the micro BIC regime.

On this 10 000 € declared, you benefit from a 50% deduction, which reduces the sum to 5000 €. If the progressive scale of income tax is 30%, you will pay 1500 € of taxes. But don't forget to add 17.2% on your 5000 €, corresponding to the rate of social security deductions. So you will pay an additional €860.

In the end, your tax bill will be €2360 when social security contributions and the marginal tax bracket are included.

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Declaring your Airbnb income under the real regime

This regime has the particularity that the expenses can be deducted from your net amount. To do this, you will have to fill in an annexed form, i.e. the 2031-SD. As with the previous calculation, the amount you will deduct will be subject to social security deductions and the progressive scale of income tax.

Let's go back to our previous example with a second home that allowed you to generate 9000 € of rent and 1000 € of household. You will find the previous 10,000 € with the 3% commission of the Airbnb platform taken into account. As a result, you have benefited from a payment on your bank account of 9700 €.

No doubt about it, you are going to defer the sum of 10 000 € to the tax authorities. But you will be able to deduct €300 in expenses directly related to the platform. The 9700 € will then be applied to the progressive scale of income tax.

If you are still in a 30% tax bracket, you will use this percentage on the €9700 and you will get €2910 of income tax. If you take into account the 17.2% social security deductions, you will pay an additional 1668 euros. Adding the two, you arrive at a sum of 4578 €.

How do you avoid a lot of hassle regarding Airbnb taxes?

On your side, you show good will, but unfortunately you are not comfortable with income tax calculation. So why not take advantage of online property management by reaching out to UpperKey Concierge?

The confidence gained by trusting UpperKey Concierge for tax support
Access to valuable expert advice from UpperKey Concierge.

Not only will you benefit from our expertise in rental management, but you will also receive valuable assistance in declaring your income. On your side, you don't need to worry anymore, because all the information will be given to you from the start.

In addition, you will receive additional information about your tax category and the annual income statement. This information is absolutely essential for you to be able to declare your income to the tax authorities. So don't be in any doubt, and don't hesitate to contact the UpperKey Concierge for more information.

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