An Italian judge has decided to take €779.5 million (which is equal to $835.5 million or £676.8 million) from Airbnb, a popular short-term rental company, due to accusations of tax evasion.
The problem arose because Airbnb didn’t collect taxes from landlords on about €3.7 billion of rental income.
In Italy, landlords are required to pay a 21% tax on the money they earn from renting out their properties.
Airbnb expressed their surprise and disappointment about this action taken by the Italian authorities.
Christopher Nutly, a spokesperson for Airbnb, mentioned that the company’s European headquarters has been working on resolving this issue with the Italian tax agency since June.
He also said, “We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue.”
Furthermore, three individuals who had managerial roles at Airbnb between 2017 and 2021 are also under investigation, as stated by Milan Tribunal prosecutors.
In 2022, Airbnb tried to challenge an Italian law that required companies like them to withhold 21% of the income earned by landlords and give it to tax authorities.
They argued that Italy’s tax requirements went against the European Union’s rule of allowing companies to offer services across the 27-country bloc.
However, the highest EU court ruled that Airbnb must follow these requirements.
Lately, the Italian government has been closely examining the tax practices of major corporations like Airbnb, which has been operating in the country since 2008.
Italian prosecutors have also launched tax-related investigations into companies like Netflix and Meta.
Just last month, Italian politicians revealed their plans to crack down on landlords who weren’t paying taxes on short-term rentals through platforms such as Airbnb.
The Forza Italia party, which is a part of the ruling coalition, mentioned that they intend to introduce a national identification code for short-term rentals.
This code will help track the income of those who rent properties without reporting it.
Antonio Tajani, the leader of Forza Italia and Deputy Prime Minister, believes this move could increase Italy’s tax revenue by €1 billion.
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