Airbnb, the online rental platform that has revolutionized the way people travel, is facing a huge tax bill in Italy after a judge ordered the seizure of €779 million ($836 million) from the company for allegedly failing to collect and pay a 21% tax on behalf of landlords who used its service between 2017 and 2021.
The prosecutors in Milan accused Airbnb of evading taxes by not acting as a withholding agent for the tax, which is applied to short-term rentals of residential properties. Airbnb challenged the law in a European court, but lost the case last year.
The company said it was surprised and disappointed by the action and claimed it had acted in compliance with the law.
The Italian tax authorities said they had notified Airbnb of the decision on October 29 and gave it 60 days to pay the amount or face further penalties. They also said they would share the information with other European countries where Airbnb operates, potentially opening the door for more claims.
The case is part of a wider crackdown on tax evasion by online platforms in Italy, which has also targeted Google, Amazon, Facebook and Netflix. The Italian government has been trying to boost its revenues and reduce its public debt, which is one of the highest in the world.
“This is a historic decision for the protection of the Italian tax system and for the fairness of the digital economy,” Fabrizio Pagani, head of the Italian Revenue Agency, said.
Airbnb, which went public last year and is valued at over $100 billion, said it would continue to work with the authorities to resolve the issue.
– Italy threatens to seize more than $800 million from Airbnb over unpaid taxes, CNN, November 7, 2023
– Italy seizes $836 million from Airbnb for alleged tax evasion, TechSpot, November 8, 2023
– Italy to seize $835m from Airbnb in tax inquiry, BBC, November 7, 2023
– Airbnb ordered to pay $835M after allegedly evading Italy taxes, New York Post, November 7, 2023