Barbados Tax Rules for Airbnb and Booking.com Rentals

August 10, 2025

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Digital platform and online marketplace operators in the hospitality sector, primarily those offering short-term rental accommodations to tourists, will face new tax collection and reporting requirements in Barbados. Under the proposed Tourism Levy Amendment Bill, digital platforms such as Airbnb, Booking.com, or Expedia will be liable to collect and remit the Shared Economy Levy directly to the Barbados Revenue Authority.

Impact on Digital Platform and Taxable Persons

The Tourism Levy Amendment Bill (the Bill) defines online marketplaces as online travel agencies or digital platforms, including any mobile app or website, that enable or facilitate transactions relating to tourism accommodations or direct tourism services between suppliers and consumers, and which allow consumers to pay for the services provided. The Bill also introduced the term marketplace facilitator, which refers to individuals or businesses that operate online marketplaces.

Under the new rules, small property owners providing short-term rental accommodation to tourists through digital platforms will no longer be required to file bi-monthly tax returns. Under the amendment Bill, the liability for collecting and remitting the 10% Shared Economy Levy will be transferred to online booking sites. Digital platforms must include the amount of the Shared Economy Levy in any advertised or displayed prices and final price charged to consumers.

Notably, the Shared Economy Levy only applies to tourism accommodation provided by persons not registered for VAT. Also, hotels are excluded from the application of the Shared Economy Levy. Additionally, if property owners do not offer tourist accommodations or direct tourism services through a platform or online marketplace, but instead through their website or directly to consumers, they remain liable for collecting and remitting any due levy.

Those who fail to meet these requirements, whether on digital platforms or as individual property owners, face the risk of incurring a USD 10,000 penalty.

Conclusion

In addition to having VAT rules and regulations in place, Barbados has implemented a special set of tax rules for the tourism sector. Therefore, the tourism levy, which includes the stated Shared Economy Levy and Room Rate Levy, applies. While the Room Rate Levy applies to most accommodations, where the applicable rate depends on the type of accommodations, the Shared Economy Levy applies only to short-term tourism rentals listed on digital platforms or rented privately.

Source: Tourism Levy Amendment Bill

What is the Shared Economy Levy in Barbados?

The Shared Economy Levy is a 10% tax on short-term tourism accommodations provided by non-VAT registered persons in Barbados. It applies mainly to rentals listed on digital platforms like Airbnb or Booking.com.

Who is responsible for collecting the Shared Economy Levy?

Under the Tourism Levy Amendment Bill, digital platforms such as Airbnb, Booking.com, and Expedia are responsible for collecting and remitting the levy directly to the Barbados Revenue Authority.

Do small property owners in Barbados still need to file tax returns for short-term rentals?

No, small property owners who list their rentals on qualifying digital platforms are no longer required to file bi-monthly tax returns, as the platforms handle levy collection.

Are hotels in Barbados subject to the Shared Economy Levy?

No, hotels are excluded from the Shared Economy Levy. However, other taxes, such as the Room Rate Levy, may still apply depending on the accommodation type.

What happens if the levy requirements are not met?

Failing to comply with levy collection or remittance rules can result in a penalty of USD 10,000 for both digital platforms and individual property owners.

Does the levy apply to rentals booked directly with the property owner?

Yes, if a property owner offers tourist accommodations directly or via their own website, they are responsible for collecting and remitting the levy themselves.

VAT Compliance and Reporting

Shared Economy Levy

VAT

Accommodation

Platform Economy