In 2015 Airbnb’s Sam McDonagh appeared before a Federal Senate Inquiry into Tax Avoidance. When asked why Airbnb had closed numerous international offices, leaving its Ireland-based operation handling financial transactions from Australia and elsewhere, McDonagh replied that Ireland had “great talent”. Our Federal Senators replied:
“Come on! And the corporate tax rate in Ireland had nothing to do with it?”
A transcript of the proceedings gives clear indication of the level of frustration Senators displayed at the responses provided by McDonagh. In a subsequent article entitled “Airbnb argues boost to economy makes up for tax evasion” Labor Senator Sam Dastyari, dismissed the insinuation that claims of injecting money into the economy removed an international business from the responsibility of paying tax onshore:
"Dastyari verified with Sam McDonagh that...the transaction would occur in Ireland. McDonagh said all Airbnb transactions within Australia do move through the Ireland-based platform, as Airbnb Australia is wholly owned by Airbnb Ireland."
In the WA Parliament last week, Sam McDonagh and Brent Thomas were asked if Airbnb pays corporate tax in Australia on the revenue it collects here. McDonagh replied:
“Yes. The one thing that the committee should be 100 percent clear on is that Airbnb is tax compliant in every market that we operate in around the world. We do pay income tax, corporate income tax, here in Australia…”
There was no mention of the admission made to the Federal Parliamentary Inquiry that every night booked in any Australian Airbnb sees the financial exchange handled by Airbnb Ireland. Back to the Federal Inquiry/Senator Dastyari:
“So I am paying Airbnb Ireland and Airbnb Ireland is paying my accommodation?”
Sam McDonagh: “That is correct.”
Federal Ministers concluded that the matter should be looked at if these transactions are officially not taking place on Australian soil for tax purposes. The ABC’s Jon Faine captured succinctly the duplicity of Airbnb’s taxation claims.
When asked in Perth how a ‘Code of Conduct’ could work, Brent Thomas assured Committee Members:
“Well, you don’t need to do that on Airbnb because there is a couple-blind review system. Anyone who had a bad experience is going to give a terrible rating and that place is not going to last for long.”
Again, Thomas somehow failed to disclose that Airbnb ‘Hosts’ and ‘Guests’ will generally give positive reviews for fear of attracting ‘mark downs’ and loss of ‘SuperHost’ status on the Airbnb platform. In place of an honest reporting system one finds numerous Airbnb ‘Guest Black Lists’ operating on closed Social Media pages where thousands of Airbnb landlords distribute claims and details of ‘black listed’ clients. And Thomas does not want to see Airbnb’s business in Australia subject to any sort of ‘registration model’ that could, according to him: “act as a barrier to participation” in illegal rentals.
Sam McDonagh at the beginning of last year retweeted Airbnb’s Brian Chesky quoted 3 million+ clients over New Year. McDonagh replied on Twitter: “To infinity…There’s never been a better time to share where and…”
It’s time that short-term rental hacks admit they are robbing us of housing, tearing residential communities apart and destroying the livelihoods of small, accredited accommodation providers…but they’re busy chasing their next $US billion.
Homes not Hotels Communities not Transit Zones People before Profits
Neighbours not Strangers