How Booking.com Handles Taxes in Canada (2026 Update)

Starting October 1, 2025, Booking.com began automatically calculating, withholding, and remitting certain taxes directly to Canadian tax authorities. Designed to reduce the administrative burden on hosts, this change applies specifically to bookings where payments are facilitated by Payments by Booking.com, the payment is via a virtual credit card (VCC), and the property is located in one of the following locations:

• British Columbia
• Quebec
• Alberta
• Saskatchewan
• Manitoba
• Halifax
• Ottawa

This guide will walk you through everything you need to know about how Booking.com handles taxes in Canada, including what tax withholding is, who is affected, and what you need to do in both Booking.com and your Lodgify account.

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Don’t see the form to download our guide to listing on Booking.com? Click here.

What is tax withholding?

Tax withholding is a process where a third party—in this case, a booking platform like Booking.com—collects taxes from a guest’s payment and sends that money directly to the government on your behalf.

Think of it like the income tax deducted from an employee’s paycheck. The employer withholds the tax and remits it to the tax authority, so the employee doesn’t have to handle that specific payment themselves. Similarly, Booking.com will handle the remittance of specific accommodation taxes for certain bookings, simplifying your responsibilities. This allows you to focus more on providing an excellent guest experience and less on navigating complex tax submissions for every transaction.

How does Booking.com tax withholding work in Canada? (2026 update)

Effective October 1, 2025, Booking.com automatically manages tax collection and remittance for eligible Canadian reservations made through its platform. This system applies specifically to bookings where payments are facilitated by Payments by Booking.com and paid out to you via a virtual credit card (VCC).

When a guest makes a reservation that meets the criteria, Booking.com will calculate the applicable taxes, add them to the guest’s total, and then withhold that tax amount from the VCC payout you receive. You will then charge the VCC for the net amount (the booking total minus the withheld taxes). For any reservations where the guest pays you directly, you will continue to be responsible for collecting and remitting all applicable taxes yourself.

Who does this apply to?

This automatic tax withholding process applies to hosts who meet all of the following conditions:

• Your property is located in British Columbia, Quebec, Alberta, Saskatchewan, Manitoba, Halifax, or Ottawa.
• You use Payments by Booking.com to process guest payments.
• You receive your payouts via virtual credit card (VCC).

There are also a few location-specific rules to keep in mind:

• Ottawa: This process only applies to properties classified as homes, bed and breakfasts, cottages, and other dedicated short-term rentals. Hotels, motels, and similar property types are excluded.
• Quebec: This policy applies only to properties that have not provided Booking.com with a Quebec Sales Tax (QST) number. If you have a QST number and provide it, you will remain responsible for QST remittance.

If your property is in another province or you don’t use Payments by Booking.com with VCC payouts, the automatic tax withholding process does not apply to you.

What taxes does this apply to?

Booking.com handles a specific set of provincial and municipal taxes. It’s important to note that these taxes often have exemptions for longer stays, which Booking.com will also manage.

Here is a breakdown of the taxes covered by this policy, based on the information provided by Booking.com:

British Columbia:

• 8% Provincial Sales Tax (PST)
• 0% to 3% Municipal & Regional District Tax (MRDT) on the room rate (including property fees)
• An additional 2.5% Major Event Tax for properties in Vancouver
• Exemption: Not applicable for stays of 27 continuous days or more

Quebec:

• 3.5% Quebec Lodging Tax (QLT) on the room rate (excluding property fees)
• 9.975% Quebec Sales Tax (QST)—only withheld if you do not provide a QST number
• Exemption: Not applicable for stays of more than 31 continuous days

Alberta:

• 4% Tourism Tax on the room rate (including property fees)
• Exemption: Not applicable for stays of 28 continuous days or more

Saskatchewan:

• 6% Provincial Sales Tax (PST) on the room rate (including property fees)
• Exemption: Not applicable for stays of 30 continuous days or more

Manitoba:

• 7% Provincial Sales Tax (PST) on the room rate (including property fees)
• Exemption: Not applicable for stays of more than 31 continuous days

Ottawa (Ontario):

• 5% Municipal Accommodation Tax (MAT) on the room rate (excluding property fees)
• Exemption: Not applicable for stays of 30 continuous days or more

Halifax:

• 3% Tourism Tax on the room rate (excluding property fees)
• Exemption: Not applicable for stays of more than 30 continuous days

How to adapt to the changes

While this policy is designed to automate processes, hosts should take a few steps to ensure a smooth transition.

In Booking.com

1. Review your tax settings:

Log in to the Booking.com extranet and navigate to the Property tab, then click VAT/tax/charges. While Booking.com will automatically apply these new settings, it’s a good practice to be familiar with your current configuration.

2. Understand your invoicing obligations:

You remain responsible for issuing invoices to your guests. Your invoices must clearly and separately list all applicable taxes, even for reservations where Booking.com remitted them on your behalf.

3. Monitor your payouts:

On the Reservations page in the extranet, you can see details for each VCC payout, including the amount of tax withheld and the final chargeable balance. Get used to checking this to understand the breakdown of your earnings.

4. (Quebec hosts only) Provide your QST number:

If you are registered for QST and wish to continue remitting it yourself, log in to the extranet, go to the Finance menu, and click QST Details to enter your number. If you don’t, Booking.com will withhold and remit the 9.975% QST for you.

In Lodgify

A crucial part of this update is how Booking.com communicates this detailed tax information to your property management system. This is handled through an integration feature called the Payments Clarity Package 2.0 (PCP 2.0).

As a Booking.com Premier Connectivity Partner, Lodgify is built to seamlessly integrate with their system updates. The PCP 2.0 enhancement ensures that the data about withheld taxes and net payouts is passed directly from Booking.com to your Lodgify dashboard. This keeps your financial records accurate and synchronized without extra manual work.

As long as your Lodgify and Booking.com accounts are correctly connected, there’s nothing you need to do on your end to take advantage of this seamless integration!

What’s next?

The Booking.com tax changes in Canada mark a significant step toward simplifying tax compliance for vacation rental hosts. By automatically handling the calculation, withholding, and remittance of specific taxes, this new policy frees you up to focus on growing your business.

Remember, this new system took effect on October 1, 2025, and only applies to VCC payouts for properties in the specified regions. Take the time now to review your settings, understand your ongoing responsibilities, and ensure your systems are ready for a smooth transition. By staying informed, you can harness this change to your advantage and continue to thrive.

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Don’t see the form to download our guide to listing on Booking.com? Click here.

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