EU VAT Changes for Airbnb and Short-Term Rentals: Platforms Will Have to Collect the Tax
Tourist rentals booked through digital platforms are heading toward one of the biggest tax changes in recent years.
The European Union has formally adopted the VAT in the Digital Age (ViDA) package, which substantially changes the VAT rules for digital platforms facilitating short-term accommodation.
The key change is this:
In certain transactions, when the owner does not charge VAT, the digital platform itself will be treated as the supplier for VAT purposes and will have to collect the tax and pay it to the tax authorities.
The reform directly affects platforms such as Airbnb, Booking and other intermediaries in the short-term rental market. It also affects thousands of private owners and small landlords who currently offer accommodation through these services.
What exactly is changing?
Council Directive (EU) 2025/516 of 11 March 2025 adds a new Article 28a to the EU VAT Directive. The new rule is generally scheduled to apply from 1 July 2028.
From then on, when a platform facilitates certain short-term accommodation services, it may be treated for VAT purposes as if it had itself:
received the accommodation service from the owner and then supplied it to the customer.
This is technically known as the “deemed supplier” rule. It fundamentally changes the tax role of platforms. In many transactions they currently act simply as intermediaries between the owner and the guest. Under the new EU rules, the platform itself will be responsible for collecting VAT in certain cases.
When will the platform have to do this?
The Directive sets out a specific rule. A platform will be treated as the supplier when it facilitates a short-term rental, unless the actual accommodation provider:
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gives the platform its VAT identification number; and
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states that it will charge the VAT due on that transaction.
The system therefore distinguishes between two main situations. If the owner is already VAT-identified and tells the platform that they will charge the tax, the owner will continue to manage their own tax obligations. If the owner does not do so—for example, certain private individuals or small operators—the platform may take their place for VAT collection purposes.
The European Commission describes the reform’s objective in similar terms: platforms will be responsible for collecting and paying VAT where the suppliers using them do not do so.
What counts as a short-term rental?
The Directive also introduces an important EU-wide definition. A short-term accommodation rental is a rental:
to the same person, continuously, for no more than 30 nights.
EU law considers these rentals capable of serving a function similar to that of the hotel sector. However, Member States may set certain criteria, conditions and restrictions in their national legislation. We therefore cannot say that every rental of fewer than 31 nights will automatically receive exactly the same treatment in every country. The direction of the EU reform is nevertheless clear.
Why is Europe changing the rules?
The Directive explains the reason: the EU sees a distortion of competition between traditional VAT-taxable accommodation—hotels, hostels and similar establishments—and certain accommodation offered through digital platforms that currently escapes effective VAT taxation.
The issue is concentrated in two sectors: short-term accommodation rentals and road passenger transport.
The EU wants the use of a digital platform, by itself, not to create a VAT advantage over traditional businesses. Its solution is direct: if collecting VAT from a small owner is difficult, the collection obligation shifts to the platform.
Will all Airbnb rentals be subject to VAT?
No. That would be an oversimplification. The Directive does not simply say that “all Airbnb rentals will have VAT.” The mechanism is more nuanced.
If the owner is properly identified for VAT and tells the platform that they will charge the relevant tax, the deemed-supplier rule will not apply in the same way. Member States also have certain options in relation to providers covered by the special scheme for small enterprises.
We will need to wait for Spain’s final implementation of the rules to know precisely how some of these options will work here.
What happens to the owner?
This is one of the most interesting parts of the system. When the platform is treated as the supplier, the Directive legally creates two transactions:
First: owner → platform.
Then: platform → guest.
Where this mechanism applies, Member States must treat the owner’s supply to the platform as exempt. The platform’s supply to the customer is then the transaction through which VAT is collected under the new system.
The aim is to avoid placing complex administrative obligations on small owners while ensuring that the tax reaches the tax authorities.
A simple example
Imagine a private individual offering a tourist apartment through a digital platform. A tourist books it for seven nights. The owner does not give the platform a valid VAT identification number or state that they will charge the relevant tax.
Once the new regime fully applies, the platform may be treated for VAT purposes as if it had supplied the accommodation to the tourist. In practical terms:
the platform will charge the customer the applicable VAT and will be responsible for paying it to the tax authorities.
The owner will still physically provide the accommodation. For VAT purposes, however, the Directive creates this legal fiction to ensure collection.
The change may affect the final accommodation price
This is probably one of the most interesting economic consequences. If a transaction does not currently bear VAT in practice, but under the new system the platform must charge VAT to the guest, someone will bear the economic cost.
It may be passed on through a higher price paid by the tourist, absorbed in part through a lower net amount received by the owner, or shared between them.
The EU reform is therefore more than an administrative change. It may directly affect the profitability and prices of thousands of tourist accommodations offered through digital platforms.
Airbnb and Booking become tax collectors
The philosophy behind the European reform reaches beyond tourist rentals. In recent years, the EU has gradually transferred tax and reporting obligations to major digital platforms. ViDA takes this a step further.
A platform will not necessarily be limited to identifying the owner, reporting transactions or charging a commission. In certain cases it will become directly responsible for collecting and paying VAT on the transaction.
This concentrates oversight in a relatively small number of large digital operators. Tax authorities can more easily monitor a few major platforms than pursue thousands of small owners individually across Europe.
When does it take effect?
We need to distinguish between adoption of the reform and its effective application. The ViDA package was formally adopted on 11 March 2025 and entered into force on 14 April of that year. Its measures are being introduced progressively over several years.
The deemed-supplier rule for short-term rental platforms is generally scheduled for:
1 July 2028.
The ViDA package also gives Member States the option to defer certain measures affecting these platforms until 1 January 2030.
This is not an obligation currently being applied in Spain. It is an EU reform that has already been adopted, has a defined application timetable and requires national implementation.
What will happen in Spain?
This will be the key question over the next few years. In Spain, the letting of residential property may currently be exempt from VAT under Article 20(One)(23) of the VAT Law, whereas certain accommodation services characteristic of the hotel industry are taxable.
The boundary between a simple letting and the provision of hotel-type services has raised many questions in the tourist rental sector for years. ViDA now establishes a new EU framework for short-term rentals facilitated through platforms.
Spain will have to adapt its legislation to that framework and decide how to use the options that the Directive leaves to Member States. We will then be able to determine the final impact on Spanish property owners more precisely.
A reform that goes far beyond Airbnb
Although Airbnb may be the best-known example, the new rules are not limited to one company. They will apply to any online marketplace, platform, portal or similar electronic interface that facilitates these services and meets the conditions set out in the Directive.
The reform will therefore affect the European digital tourist-accommodation market as a whole.
Conclusion: Europe is changing who collects VAT
Council Directive (EU) 2025/516 introduces one of the biggest recent changes to the European tax treatment of digital platforms.
The central idea is simple: where certain owners offering short-term accommodation through platforms do not charge VAT, Europe transfers responsibility for collecting it to the platform.
This does not mean every tourist rental will automatically bear VAT, nor does it mean the measure is already being applied in Spain. But the legislative change has been adopted and has a timetable.
From 1 July 2028, subject to the available options and transitional periods, short-term rental platforms will have to assume a role that did not previously belong to them in certain cases:
they will cease to be mere intermediaries and will be treated as suppliers responsible for collecting VAT.
For owners, platforms and travellers, the change may be more significant than it first appears.
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