The business model of Airbnb, the global giant of tourist rental, It is based on charging commissions both to the owners of the tourist apartments and to the travelers for putting them in contact and making the intermediation of the lease through its online platform. Spain has been one of the group’s large markets for years – now slowed down by the impact of the pandemic on tourism – but the millionaire income from the collection of these commissions does not remain in Spain and in the face of the Treasury, that business does not exist.
Airbnb centralizes all that commission income in its central European headquarters, based in Ireland, a country that offers tax advantages for multinationals. The group only has one subsidiary in Spain that is responsible for carrying out marketing and advertising tasks for its Irish parent company and for the global corporation, based in the United States. A fiscal and operational strategy that is fully legal, but that makes the payment of Airbnb taxes in Spain be very small despite the great weight that the Spanish market has in your business.
The Spanish subsidiary, Airbnb Marketing Services SL, based in Barcelona, It does not have any activity related to tourist rental for tax purposes and works as a mere advertising agency. For this reason, despite the enormous activity during the years of the tourism boom in Spain, the income of the Spanish subsidiary is reduced to the services billed to other companies in the group, the recognized benefits are low and the payment of taxes is equal to modest.
Since its constitution in mid-2011 and until the end of 2020, Airbnb Marketing Services has only paid 870,319 euros in corporate tax and has declared an accumulated net profit of 2.2 million euros in this decade, according to deposited accounts. by the company during these ten years in the Mercantile Registry.
Pay the taxes that touch
“Airbnb pays all the taxes to which it is subject in the places where it operates. Airbnb Marketing Services SL provides commercial and marketing support services and pays all applicable taxes in Spain ”, explains a company spokesperson to ‘El Periódico de España’.
The national governments of the European Union agreed last year to extend the EU directive on fiscal cooperation between countries to include digital platforms from 2023. The new standard aims to improve, starting next year, the exchange of information between member states to identify the business that the platforms have in each country and to be able to adopt the appropriate tax measures. In parallel, the European Commission has shown its intention to promote the application of the OECD agreement to impose a minimum rate of 15% of corporation tax to multinationals. Airbnb has publicly shown its support for both measures.
“The Airbnb model is unique and allows many people to earn additional income, with a direct impact on family and local economies. The vast majority of the income generated on the platform remains in the community itself and is subject to local taxes, “they wield from the company. The argument is that Airbnb’s income via commission is centralized in another country (up to a maximum of 18 % of the rent), but the remaining 82% that remains in the hands of the owners of the apartments is taxed in Spain.
As expressly stated in the financial accounts report, the corporate purpose of Airbnb Marketing Services “is limited to providing marketing services and market objectives and it is hereby contracted by Airbnb Ireland UC to provide such services.” In fact, the Spanish subsidiary is cataloged with code 7311 of the national classification of economic activities (CNAE), reserved for advertising agencies.
12 million bonus
In 2020, the last year with accounts available in the Mercantile Registry, the Spanish subsidiary of Airbnb obtained a net profit of 914,120 euros, almost triple the one year before. The company reported revenue of 19.8 million euros, growing almost at the same rate as earnings, 2.6 times more than a year earlier. The direct contribution of the local Airbnb subsidiary to the Spanish public coffers in 2020 as corporate tax was 302,113 euros, the largest of its creation and also almost triple that in 2019.
The strong increase in all its financial records is a direct consequence of the millionaire bonus paid to employees and former employees of the Spanish subsidiary using the latter as a mere intermediary for the payment. The 2020 accounts reflect the payment of a compensation of 12.3 million by converting into shares of stock options (stock options) that the company has been distributing to its staff for years and that was executed after the IPO in the United States of the global parent Airbnb Inc., on December 9, 2020.
Those 12.3 million euros is the value of the shares distributed when the stock market debut occurred, when the securities started at a price of 68 dollars. The beneficiaries of the bonus were not only the 37 employees that, on average, the Spanish company had on staff in 2020, but all the employees of the subsidiary who in previous years also received stock options as part of your incentive plan. The company does not disclose the exact number of beneficiaries.
As a result of this extraordinary remuneration in kind, Airbnb Marketing Services staff costs quadrupled, from € 4.29 million in 2019 to a total of € 17.17 million. However, the bonus is both the cost of personnel and also income for the company (hence the strong increase in annual turnover), because the Spanish subsidiary re-invoiced those 12.3 million to Airbnb Ireland to add the cost and also applied a margin for the management.