With the entry into force of the European directive DAC7, the rules of the game in the short-term rental market have changed radically. Platforms are now legally required to collect, verify and automatically report detailed financial information about their partners (landlords) directly to the National Revenue Agency (NRA).
In this detailed guide, we will explain exactly what these mean. taxes for Airbnb and Booking in Bansko, how to set up your accounts properly, and what steps to take to avoid account freezes, payment garnishments, or surprise tax audits.
1. The End of Anonymity: What is the DAC7 Directive?
From the beginning of 2023, all digital platforms operating in the European Union will be required to submit annual reports to the tax authorities of the member states on the income generated by their users. This means that the era of “anonymous” apartment rentals in Bansko is officially in the past.
What data is automatically exchanged between the platforms and the NRA?
When you rent out a property, the platforms generate a profile of your income and send it to the Bulgarian tax authorities. This profile includes:
- Identification data: Full three names and Personal Identification Number (if you are submitting as an individual) or Company name and UIC (if you are working through a legal entity).
- Bank information: Exact IBAN of the account where you receive payments from reservations.
- Property details: Exact physical address of the property in Bansko, as well as its type (apartment, studio, guest house).
- Financial information: Total gross amount of amounts paid for the calendar year (revenue before deductions), as well as the exact number of nights spent.
2. Specific Airbnb account requirements and settings
Airbnb’s interface is known for its intuitiveness, but the platform is becoming increasingly strict about complying with local regulations in Bulgaria. For property owners in Bansko, there are two critical areas that need to be filled out perfectly.
Field "Registration number" (Listing details / Regulations)
In the “Regulations” section of your listed property, Airbnb now requires you to enter a license or registration number.
- What is filled in: Here you need to enter your phone number. Categorization certificate (issued by the Mayor of Bansko Municipality). If the procedure is in progress, you can enter the number of The provisional certificate of open procedure.
- Why is it extremely important: The platform has gradually started to limit the visibility (in the search engine) of listings without a valid registration number in Bulgaria. If you leave the field blank, you risk your property being hidden from potential guests.
Taxpayer Information
In the payments and taxes menu, it is necessary to correctly fill in your tax status so that the platform can correctly issue invoices for its services.
- For individuals: You indicate your personal identification number.
- For legal entities: You indicate the company UIC and your VAT number (if you are registered under VAT).
3. Specific requirements and settings on Booking.com
Unlike Airbnb, Booking.com operates entirely on a B2B (business-to-business) basis. This means that they treat each host as a business entity and apply much stricter criteria regarding VAT, invoicing, and verification.
Identification form (KYP – Know Your Partner)
This is a mandatory security and partner verification process. Booking.com requires definitive evidence that you are the actual owner of the property in Bansko or its legitimate authorized manager.
- Required: Color copies of identity documents (ID card/passport), property document (Notary Deed) or management contract, as well as an official statement/confirmation from the bank for account ownership.
- Consequences: Failure to complete or delay the KYP form on time will result in direct stop translations to you. Even if your property continues to accept reservations, your money will remain blocked in the platform's system.
VAT on commission (Reverse Charge Mechanism)
This is the most commonly misunderstood aspect by property owners, which leads to hefty fines from the NRA. Since Booking.com is a corporation based in the Netherlands, when they issue you an invoice for their commission (which is typically between 15% and 18%), they do not charge VAT on the invoice. The European reverse charge mechanism applies.
- Your legal obligation: You are obliged to charge 20% VAT yourself on the value of the commission withheld by the platform. This is done by issuing a Protocol under Art. 117 of the VAT Act and paying the amount into the Bulgarian state budget.
- VAT registration: To be entitled to issue this protocol, it is mandatory special registration under Art. 97a of the VAT Act (before you start your business). If you do not provide a valid Bulgarian VAT number on the Booking.com extranet, the platform will still report transactions to the NRA, but you will be in serious violation for unpaid tax.
4. Price synchronization: Tourist tax and VAT rates
When setting pricing policies on platforms, it is critical to correctly define the structure of local taxes and fees so that you do not suffer financial losses.
- Tourist tax: In the Booking.com and Airbnb settings, you must explicitly specify whether the local tourist tax for the Municipality of Bansko is included in the base price or is collected additionally from guests at reception.
Recommendation: The best and most conflict-free approach is to calculate it and include it in the final price (marked as “included”). Avoid the inconvenience of demanding small amounts of cash (e.g. 1.20 BGN per night) from foreign guests upon check-in. - VAT rate for overnight stays: Make sure that your financial system (and that of the platforms) does not automatically charge the standard rate of 20% on the overnight stays themselves. For tourist accommodation in categorized facilities in Bulgaria, the applicable reduced VAT rate is 9%.
5. Risks of Non-Compliance
Ignoring the new tax rules and platform requirements leads to quick and very unpleasant negative consequences that directly affect your business in two directions:
From the Platforms side (Airbnb / Booking):
- Delisting and invisibility in search engines until the circumstances are fully clarified.
- Payouts block – holding your earned funds.
- In case of systemic violations - unilateral and irreversible termination of the partnership agreement.
On the part of state institutions (NRA and Bansko Municipality):
- Identification of hidden income and initiation of tax audits for past periods (up to 5 years ago).
- Imposing hefty fines for conducting commercial activity in an uncategorized facility.
- Sanctions and penalty interest for unpaid VAT on commission invoices from abroad.
Conclusion
The era of “invisible” and unregulated rentals in Bansko is over. Today, digital platforms function as active partners of the tax administration. Compliance and tax payment for Airbnb and Booking may seem like a complicated administrative burden at first. In reality, however, it simply requires an initial, one-time correct setup of the accounts and a little discipline in keeping financial records.
A legal business is a peaceful business. Get your paperwork in order before the start of the busy season to enjoy high occupancy and excellent reviews from your guests, without fear of fines.
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