The Payoneer Card: Innovation or just fraud?


One of the most common critiques against Airbnb, Uber and other tech companies is that they don’t pay enough tax.

In fact, thanks to its complicated multinational tax structure, Airbnb only paid 92,000 euros in corporate tax to the French government in 2016, substantially less than what your average 100 room hotel (which has an effective tax rate of over 20%) is likely to contribute to the national budget. This is something the French government – and French hoteliers – find particularly irritating.

Imagine, then, the horror of the French tax authorities when they discovered that Airbnb, in addition to not paying any tax themselves, was actively helping their users to avoid income tax on the money they earned through the platform.

This is exactly what Airbnb was found to doing through the Payoneer card.

Payoneer is a New York based financial services company which offers a dedit card to potential customers. In Europe it operates out of Gibraltar, a known tax haven which is not particularly keen on sharing financial with other countries.

Airbnb partnered with Payoneer, to allow hosts to set up a special account with the company and have all the revenue they received from their short term rental business stored in this account. The hosts would be able to access the money through an Airbnb payoneer debit card. The account was located

The French government, alerted to the problem by AHTOP (an association of French hoteliers), was not impressed by this activity and invited the company to explain the situation. Bercy (the word for the local treasury) was of the opinion that such a card would allow hosts to avoid paying income tax on their Airbnb earnings.

After this meeting, Airbnb decided to withdraw the card from the French markets. In addition, to smooth things over with the tax office, they also agreed to share the income data they had on all people who used the card. One imagines Bercy will be looking quite closely at how much these payoneers reported on their tax returns.

The issue is a small one, there were only a few thousand Payoneer card users in France when it was pulled. However, it points to a broader issue that outlaw hotels and home sharing creates: tax fraud.

Home sharing is shifting revenue from the highly taxed and easily auditable hotel industry, to a much more difficult to monitor black market of outlaw hotels and individual home sharers. This reduces the tax take of government organizations, and reduces the ability of governments to fund essential services.

National governments will have to find new ways to tax and oversee these home sharing sector if they want to prevent the erosion of their revenue base.

It will be interesting to see if other governments pursue this issue in the many other countries were Airbnb keeps the card.

For coverage of this issue, see Challenges (link).