Italian national news outlet Il Sole 24 Ore is reporting that Italian authorities are accusing US-based online accommodations booking platform Airbnb of failing to pay €500 million ($547 million) in taxes.
According to the outlet, the government’s revenue agency (Agenzia delle Entrate), which enforces financial laws and collects taxes, has launched a probe of the online platform.
According to Italian law governing short-term rentals, professional landlords which lease domiciles, must pay the government a 21% flat-rate tax on the rental income they receive. In any case where the hosts are non-professionals, or where the rentals are not the primary sources of income for them, such as Airbnb users, the platform, such as Airbnb must act as agents, withholding the tax from the fees paid, so it may be turned over to the government.
The majority of Airbnb users in Italy are non-professional hosts. Although the online company has repeatedly contested the Italian law, so far its efforts have been unsuccessful. In December, the EU Court of Justice ruled that the Italian law is not in conflict with broader legislation in the EU, which basically cleared Italy to seek the tax from the platform.
The report noted that Airbnb has been working with the Italian Revenue Agency for months to identify for which hosts the platform will need to act as a tax agent. The final cost will be dependent upon how many of its hosts the platform must act as an agent for.
According to analysts, the platform will have a legal right, after it pays the bill, to launch suits against the hosts who have not paid the tax to it, which will allow it to recoup the money it has paid the government.
If the estimates of €500 million are correct it would mark the second-highest amount the Italian government had ever demanded from an internet company, falling only behind an €870 million tax bill it demanded from Meta platforms due to the Facebook and Instagram parent company failing to pay VAT earlier in the year.
Italy has ramped up efforts to fight tax evasion in the last ten years, collecting almost €3 billion from multinationals that failed to pay taxes, according to Il Sole 24 Ore. Internet giants Apple, Google, Meta, PayPal, and Netflix have collectively paid over €800 million in the course of the initiative.
