Italian Tax Authorities Seize €779M From Airbnb In Alleged Unpaid Taxes!

Airbnb and the Italian tax case
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In a significant move, Italy’s financial law enforcement agency, the Guardia di Finanza, has reportedly confiscated a massive sum of €779 million from the well-known accommodation-sharing platform Airbnb. The seizure is part of an ongoing investigation into alleged tax evasion by the company. Airbnb has expressed itsnd disappointment at the actions taken and said it’s just following EU rules instead.

Airbnb claims to have been actively engaging with the Italian tax office since June 2023 to amicably resolve the issue and maintains that it has strictly adhered to all legal requirements. According to reports, the decision to seize funds was authorized by Judge Angela Minerva after a comprehensive tax audit by the Guardia di Finanza concluded that Airbnb had not complied with Italian tax laws. Specifically, the company is accused of not withholding a 21% on rental income from landlords, which, over the period from 2017 to 2021, amounted to over €3.7 billion ($3.97 billion).

The controversy stems from legislation introduced in Italy in 2017, which mandates that platforms like Airbnb collect and remit taxes on behalf of hosts. Airbnb contested this regulation in Italian and EU courts in December 2022. While the courts upheld Italy’s right to enact such tax laws, they found the requirement for platforms to appoint a tax representative to be in conflict with EU legislation.

Despite the legal entanglements, Airbnb insists that it operates under the EU-wide DAC7 tax framework and is therefore not subject to the Italian tax code as interpreted by the local authorities. The company has indicated its intention to continue its legal fight. Judge Minerva has notably accused Airbnb of deliberately choosing corporate strategies that would allow it to evade compliance with Italian tax laws, primarily to avoid losing market share to competitors

This crackdown on Airbnb by Italian authorities is part of a broader global trend where cities like Dallas, Barcelona, San Francisco, and others have imposed restrictions on short-term rentals to curb issues related to this burgeoning sector.

CategoriesTax Crime

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