Who remits the tax when a guest books through Booking.com, Expedia or Airbnb

Almost every operator who takes bookings through Booking.com, Expedia or Airbnb has had the same uncomfortable thought at some point: is somebody already collecting this tax, and if so, am I about to remit it a second time?

It is a fair thought. The answer is not the same for every tax, it is not the same for every platform, and it is not the same for you as it is for the operator down the road who is not registered. What follows is the shape of the rules and the question you actually have to answer. Confirm the specifics with your accountant before you file anything, because this is one of the few areas of Canadian tax that has changed materially in the last few years and continues to.

First, separate two things people constantly merge

There are two different questions in play and they get discussed as if they were one.

Question one is commercial: who takes the guest's money? This is the difference between the two OTA models, and it decides what shows up in your bank account.

• In the hotel-collect model, the guest pays you at the property. The platform sends you an invoice for its commission at the end of the month. Your folio shows the full amount, and the commission is an expense.
• In the merchant model, the platform charges the guest's card itself, keeps its commission, and remits you the net. Your folio still needs to show the full amount the guest paid, with a payment recorded against it, or your revenue is understated by exactly the commission.

Question two is fiscal: who is the supplier for tax purposes, and who is required to charge, collect and remit? That is a legal question, and the answer does not automatically follow from who touched the money.

Most of the trouble in this area comes from answering question two by looking at question one.

The three taxes, answered separately

A Canadian room night can carry three distinct kinds of tax, and each one has its own answer.

GST and HST

If you are a GST/HST registrant, you are making a taxable supply of short-term accommodation and you are generally the one charging and remitting on it, regardless of which website the guest used to find you.

The platform rules that came into force in 2021 were aimed at a different situation: accommodation supplied by people who are not registered. In that case the accommodation platform is generally required to collect and remit the GST/HST on the booking instead. This is why two operators on the same street can have genuinely different answers, and why the answer changes for you the moment you cross into registration.

The practical implication is that "the platform handles the tax" is not a fact about the platform. It is a fact about the supplier.

QST, and provincial sales taxes

Quebec runs its own registration system and it has its own rules for platform operators, along the same lines but not identical. British Columbia requires online accommodation platforms to collect PST, and in participating areas the municipal and regional district tax, on the accommodation they sell.

The important part here is not the list. It is that provincial answers do not track the federal answer, so a decision made once about GST does not settle QST or PST.

The accommodation or lodging tax

This is the one where a platform is most likely to be collecting and remitting directly, and therefore the one where a double remittance is most likely.

Quebec is the clearest example, because it writes the distinction down. A guest booking direct means you charge your rate, collect it, and remit it. A traditional agency that acquires the accommodation and re-supplies it to the traveller is an intermediary, and a flat amount per overnight stay applies which the intermediary remits. A digital platform registered for the tax on lodging collects and remits on the bookings it handles.

Elsewhere in Canada, municipal accommodation taxes and destination marketing fees vary by municipality, and whether the platform collects them varies with the agreement that municipality has in place. There is no national rule to memorize here. There is only your municipality, your platform mix, and the current arrangement between them.

The two ways this goes wrong

Double remittance. You remit accommodation tax on every night you sold, including nights where the platform already remitted it. Nobody sends this back to you. It is a quiet, permanent overpayment, repeated every period, and it is most likely on the highest-volume channel because that is where the platform has an arrangement.

Under remittance. You assume the platform handled it, and for one of the three taxes or one of the channels, it did not. This one surfaces at audit rather than in your bank balance, which makes it the more expensive of the two.

Both failures have the same root cause. The books recorded a room night and a tax total, and did not record who the booking came from or which portion of the tax somebody else was responsible for.

What your books have to be able to answer

If you take bookings through more than one channel, your system needs to produce four things without a spreadsheet.

1. Revenue by booking source. Direct, each platform, each agency. Not as a report you assemble at year end, as a field on the reservation.
2. Tax stored per component. GST, HST, QST, PST and accommodation tax as separate fields on the posting rather than one tax total. A total cannot be split back apart afterwards, whatever anyone tells you.
3. Accommodation tax on accommodation only. Not on the cleaning fee, not on the kayak, not on the firewood, and correctly on the lodging portion when a package blends several things into one price.
4. A remittance figure split by who remits. The report has to be able to say: this much you owe, this much an agency owes, this much a platform has already handled. Anything less puts you back in the spreadsheet, once a period, forever.

The fourth one is where nearly all small-property software falls down, because it requires the system to have modelled the intermediary question at all rather than assuming every booking is a direct one.

The commission side, while you are here

Since you are auditing how channel bookings are recorded, the commission model deserves the same treatment. A hotel-collect channel and a merchant-model channel produce different folios for the same booking value.

Recording them the same way produces one of two errors. Either you chase a guest for money a platform already collected, or you settle a folio to zero that the guest genuinely still owes. Both are visible to the guest, which is the worst place for an accounting error to become visible.

Verify before you file

Rates, thresholds and platform obligations in this area have changed repeatedly and will change again. Municipal accommodation taxes are set locally. This guide explains a structure, not your filing. Confirm your own position with the CRA, with Revenu Québec if you operate in Quebec, and with your accountant.

What none of them can do for you is reconstruct a year of bookings that were never recorded with their source on them.

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In Cardinal, booking source is on the reservation, tax is stored as separate components on every posting, accommodation tax is only ever populated from a lodging charge, and the remittance report splits accommodation tax by who actually remits it. Channel commission is modelled by who collects the money, so a hotel-collect booking and a merchant-model booking produce the folio each one should.