An Italian judge has ruled for the confiscation of €779.5 million ($835.5 million; £676.8 million) from Airbnb, the prominent short-term rental platform, due to alleged involvement in tax evasion.
According to prosecutors, Airbnb failed to collect taxes from landlords on approximately €3.7 billion in rental income. In Italy, landlords are obligated to pay a 21% tax on their rental earnings.
Airbnb expressed surprise and disappointment in response to the actions initiated by the Italian public prosecutor. The company’s European headquarters has been working to address this matter with the Italian tax agency since June, according to Airbnb spokesperson Christopher Nutly.
He added that Airbnb believes it has adhered to all legal requirements and intends to assert its rights regarding this issue.
Furthermore, three individuals who held managerial positions at Airbnb between 2017 and 2021 are under investigation, according to a statement from Milan Tribunal prosecutors.
In 2022, Airbnb challenged the Italian law mandating that the company, along with other short-term rental providers, withhold 21% of landlords’ rental income and remit it to tax authorities.
Airbnb argued that these Italian taxation regulations contradicted the European Union’s principle of allowing service provision across the 27-member bloc. Subsequently, the EU’s highest court ruled in favor of Italy’s requirements for Airbnb.
In recent years, Italian authorities have intensified their scrutiny of the tax practices of major companies operating in the country, including Airbnb. Reports indicate that Italian prosecutors have launched tax-related investigations into companies such as Netflix and Meta.
Last month, Italian politicians unveiled plans to crack down on landlords who evade taxes on short-term rentals facilitated through platforms like Airbnb. The Forza Italia party, which shares governing responsibilities, announced its intention to introduce a national identification code for short-term rentals.
According to Deputy Prime Minister Antonio Tajani, this code aims to expose the revenue of those renting properties without declaring them. Politicians estimate that this measure could increase Italy’s fiscal revenue by €1 billion.
Last Updated: 07 November 2023