Rental, vacation properties require license, tax registration by December

Playa del Carmen, Q.R. – Those involved in the rental of vacation properties will soon face regulation as the revenue department sets mandatory licensing into motion.

In an attempt to regulate vacation rentals, those involved in the industry are required to have a license and pay taxes on earnings as of January 2016. This new regulation also applies to those renting out rooms.

Gabriel Castro Gardenas, Municipal Treasury for Solidaridad, says that those who do not comply will be subject to fines and penalties. From now until January, they are giving rental businesses a chance to become licensed to obtain the permits needed to sell the services of vacation rentals.

He adds that online vacation and other property rentals are an unfair competition for the local hospitality industry and that “when renting on websites or social networks, they are not taxed and that’s not right.”

Castro Gardenas announced in late October the new regulation for establishments that offer rental services. This includes regulation of businesses offering the services via the Internet, social media networks and advertisements in newspapers and magazines as they exert gainful employment without payment of duties or obligations.

As of January 2016, these businesses must have an operating license as according to Article 68 of the Municipal Tax Code.

He adds, “There are about 800 identified vacation rental companies, and by December, we expect about 300 to be regularize. The documentation will then be given to Treasury and Revenue.” He explains that, “Next year, the sanctions take effect and hopefully there will be a good response from tax payers.”

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