Alin Burcea, president of the National Association of Romanian Travel Agencies (ANAT) and owner of the Paralela 45 agency, says that the current legislation requires the classification of accommodation spaces, but it is cumbersome and cannot be implemented.
“Romania is a tax haven for illegal accommodation. We are talking here about Airbnb, Booking.com and private accommodations with a key on the side of the road. Our estimates are that they pay only 10% of what they should in tax. The Romanian legislation is correct, but cumbersome. This requires the apartments to be classified according to law. But ten people from the Ministry of Tourism (Ministry of Economy, Entrepreneurship and Tourism – no) cannot classify 40,000 apartments in the country”, said Burcea, for Libertatea.
Shifting emphasis from classification to taxation
His solution is for the state to no longer focus on the classification of spaces, but on their taxation, simplifying the process along the way.
“It should be done like in Spain: give you a tax registration code and if you don’t have it, Airbnb and the other similar platforms won’t accept you. And without tax registration you cannot operate. And if Airbnb and Booking do not respect this, then they should be banned in Romania”, he says.
From 2022, all hosts on Airbnb and similar platforms are required to hold a classification certificate issued by the Ministry of Economy, Entrepreneurship and Tourism.
Burcea says, however, that local authorities “close their eyes” when it comes to charging them.
“In its current form, there is a problem: locally, the ANAF are not so strict, maybe the mayor also has a few apartments on Airbnb, maybe they have brothers-in-law, cousins, etc. The important thing is to give them this tax code. We should be interested in money, not classification. There are tens of thousands of apartments. “Rather than increasing VAT next year and tearing the economy in two, it’s better to collect tourism taxes from those who don’t pay,” points out the head of the agency association.
European regulation
The European Union approved a regulation on short-term housing rentals last month, according to Hotnews. It aims to collect and share data between platforms and authorities, aimed at increasing the protection of customers, city dwellers and transparency.
According to the new regulation, illegal listings will no longer be able to be listed on online platforms. At the same time, the authorities will be able to verify them, and the platforms will no longer be able to blame other parties when it comes to evasion.
The regulation will in turn have to be approved by the EU states, including Romania.
Project at the Ministry of Economy
At the beginning of April, the Ministry of Economy, Entrepreneurship and Tourism already put in public debate a draft Government Decision, which will prohibit the promotion of unclassified units.
Those who do not hold these classification certificates risk fines between 15,000 and 30,000 lei, and if they promote their spaces on platforms and social networks, they risk fines between 4,000 and 8,000 lei.
Operators such as Airbnb and Booking will be prohibited from promoting or offering the services of units without a classification certificate.
Uber vs taxi drivers
However, the head of ANAT wants to replace it with a certificate issued by the Fisc, to reduce bureaucracy and tax those with accommodation.
The situation is similar to the fight between classic taxi drivers and alternative transport, represented by global giants such as Uber or Bolt.
Taxi drivers have long accused apps like Uber of unfair competition because they don’t pay fees and don’t have permits.
For its part, Uber has argued that it’s just an app and that it’s up to drivers to declare their income.
In December 2017, the European Court of Justice ruled that Uber is a transport service. Thus, both companies and drivers needed permits.
Romania thus changed the legislation and created a parallel one in 2019, for alternative transport.
Discrimination by law
However, taxi drivers still accuse that they are discriminated against by law: they are obliged to have cars that are no more than 10 years old, while the maximum age for alternative transport is 15 years.
Also, the number of taxi permits is limited, while that of Uber and Bolt drivers is unlimited, although they use the same urban infrastructure.
At the same time, the companies in the field say that Uber, Bolt and other platforms still compete unfairly, because the money goes to the Netherlands or countries with low taxes and is not taxed, although the economic activity is done in Romania.
Ridesharing platforms retain a commission of 25-30% of the cost of each ride paid by users. Taxi operators charge that no taxes are paid on these fees charged, which further gives them a fiscal advantage over traditional passenger transport companies. Taxi companies pay 1% or 3% tax if they are taxed on turnover, or 10% profit tax if they are large companies, depending on revenue.
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Tags: Romania Tax Paradise Illegal Accommodations Tourist Sector Requests Taxation Residents
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