The Italian Revenue Agency (Agenzia delle Entrate) has launched an investigation into US-based online accommodation booking firm Airbnb, accusing the company of not paying around €500 million ($547 million) in taxes, according to national news outlet Il Sole 24 Ore. Under Italian legislation governing short-term rental platforms, professional landlords who lease accommodation are required to pay a 21% flat-rate tax on their rental income. However, in cases where the hosts are non-professional or rentals are not their main source of income, platforms like Airbnb are responsible for acting as tax agents and withholding the tax from transactions before remitting it to the authorities.
Despite the majority of Airbnb hosts in Italy being non-professional, the company has repeatedly tried to contest the Italian legislation without success. In December 2022, the EU Court of Justice ruled that the Italian law does not contradict broader EU legislation, giving Italy the authority to demand the tax from the platform. Airbnb has been in negotiations with the Italian Revenue Agency for several months to determine the specific group of hosts for whom the company should act as a tax agent. The final amount owed will depend on the number of non-professional hosts represented by Airbnb.
Analysts predict that once Airbnb reaches an understanding with the tax authorities, the company will have the right to sue hosts who have not paid their taxes in order to recover the funds needed to pay the government bill. If the estimations are correct, the €500 million settlement will be the second-highest figure ever requested by Italy from an internet company, following the €870 million demanded from Meta platforms earlier this year. Meta, the multinational owner of Facebook and Instagram, was accused of failing to pay VAT in the country.
Italy has made significant efforts in the past decade to combat tax evasion, particularly targeting multinationals. According to Il Sole 24 Ore, the authorities have collected nearly €3 billion from companies that initially failed to pay taxes, with approximately €800 million coming from internet giants including Apple, Google, Meta, PayPal, and Netflix.
The pursuit of taxes from online platforms and internet companies has become a priority for governments around the world. Countries are increasingly concerned about the potential loss of revenue due to tax avoidance and evasion in the digital economy. Airbnb’s case in Italy highlights the ongoing challenge of ensuring that online platforms fulfill their tax obligations and contribute their fair share to national economies.
In conclusion, Italian authorities accuse Airbnb of not paying taxes amounting to €500 million, and a probe has been launched by the Revenue Agency. Italian legislation requires professional landlords to pay a 21% flat-rate tax on rental income, while platforms like Airbnb must act as tax agents for non-professional hosts. After negotiations, Airbnb will potentially be able to sue hosts to recover funds for the tax bill. This settlement would be the second-highest ever requested from an internet company in Italy, preceded by the €870 million demanded from Meta platforms. Italy has been proactive in combating tax evasion, collecting nearly €3 billion from multinational companies. The pursuit of taxes from online platforms is a global issue, and governments are striving to ensure these companies fulfill their tax obligations and contribute to national economies.