Italy hits Airbnb with $836 million seizure over alleged tax evasion
- Reference: 1699369214
- News link: https://www.theregister.co.uk/2023/11/07/italy_hits_airbnb_with_836/
- Source link:
"Airbnb Ireland has been in active discussions with the Italian tax agency since June 2023 to resolve this matter. We are surprised and disappointed at the action announced by the Italian public prosecutor on Monday. We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue,” Airbnb said in a statement.
The measure was [1]reportedly ordered by investigating judge Angela Minerva based on the conclusion of a tax audit performed by the Guardia di Finanzia. That audit determined Airbnb failed to withhold 21 percent of landlord rental income on short-term rental payments totaling over €3.7 billion ($3.97 billion) between 2017 and 2021 meant for payment to the country's tax authorities.
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Monies due go back to 2017 - the year Italy introduced a law requiring short-term rental platforms withhold both host income tax and occupancy tax.
[3]Europe wants Airbnb and pals to cough up rental property logs
[4]Israel and Italy have cheapest mobile data out of 237 countries
[5]Airbnb hosts less likely to accept bookings from Black people than Whites
[6]Amazon unveils new drone design, plans liftoff of aerial delivery in UK, Italy
Airbnb challenged the rule in December 2022 in Italian and EU courts. The court mostly ruled in Italy's favor – that the EU member states could pass such laws to withhold tax, but the court said the obligation to appoint a tax representative is contrary to EU laws.
Airbnb is based in Ireland and has a subsidiary in Italy.
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The company told [9]local media it is not subject to the Italian tax legislation as it follows EU-wide DAC7 tax framework. It [10]told international media it would continue fighting in court.
"For years now Airbnb has taken the deliberate corporate option" of not complying with Italian legislation on the payment of tax on short-term rentals "with the main aim of not risking the loss of market shares in favor of competition," [11]asserted Judge Minerva (as auto translated from Italian.)
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According to Judge Minerva, Airbnb allegedly evaluated four different strategies for dealing with Italian tax regulators. Those strategies, according to the judge's filing allegedly included defending its position and managing years of tax litigation; abandoning online payments – an option that would lead to a decrease in revenues; compliance but with voluntary adherence from the hosts; and lastly, full compliance even though it would cause an increase in listing prices and loss of market share.
According to the judge, however, the tax audit determined that Airbnb should have collected taxes on behalf of most Airbnb hosts, with exemptions made for stays longer than 30 days, landlords with a VAT number, or hosts with more than four rentals during the year 2021.
Italy's ruling party has [13]reportedly said it wants to introduce a national identification code for short term rentals as it cracks down on landlords skipping out on taxes from the income.
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Italy is not the only place seeking to manage the perceived nuisance of Airbnb. Dallas, Barcelona, San Francisco, Seattle London, Paris, Singapore, New York City, Vancouver and Tokyo are some of the cities that have placed restrictions on short term rentals. ®
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[1] https://www.ilsecoloxix.it/italia/2023/11/06/news/sequestro_779_milioni_airbnb_fisco-13841775/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZUptMXCJht6Xp5NV8BzZLAAAAEE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/11/08/eu_airbnb_regulation/
[4] https://www.theregister.com/2023/09/28/cheapest_for_mobile_data/
[5] https://www.theregister.com/2022/12/14/airbnb_hosts_race_study/
[6] https://www.theregister.com/2023/10/19/amazon_drone_delivery_expands/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUptMXCJht6Xp5NV8BzZLAAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUptMXCJht6Xp5NV8BzZLAAAAEE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.ilgiorno.it/milano/cronaca/milano-sequestrati-779-milioni-di-euro-ad-airbnb-evasione-su-cedolare-secca-oiwv34zx
[10] https://www.reuters.com/business/eu-court-rules-airbnb-must-provide-rental-info-tax-authorities-withhold-tax-2022-12-22/
[11] https://www.ilsecoloxix.it/italia/2023/11/06/news/sequestro_779_milioni_airbnb_fisco-13841775/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZUptMXCJht6Xp5NV8BzZLAAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.reuters.com/markets/europe/italy-crackdown-targets-1-bln-euros-undeclared-short-term-flat-rental-tax-2023-10-30/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZUptMXCJht6Xp5NV8BzZLAAAAEE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
Having worked in Italy indirectly for Guardia di Finanzia
I can tell you that they claim to have much more sophisticated, and simply, much more firepower than the Italian Armed Services combined.
Long linger drones automatically following super yachts and suppling super resolution video over satellite links, for instance.
Anon as you can guess who owns those sorts of yachts and don't get on well with the Italian Tax Office!
I don't want a horses head in my bed - or jokes about it being preferable to my partner!
Re: Having worked in Italy indirectly for Guardia di Finanzia
You don't read much about their successes. Probably the first one I hear about.
Aren't the drones simply for creeps to watch the ladies on the yacht as an excuse for "investigation"?
Re: Having worked in Italy indirectly for Guardia di Finanzia
The super wealthy don't get arrested, they get settlements whereby they pay a fraction of the normal amount.
Anything that tanks the airbnb business model is ok with me.
What on earth makes them think that paying the tax is optional, or something that can be discussed?
It is 21% of their income, which actually is pretty low, I think it should be a lot higher, other people who earn that sort of money pay 43%, but either way, that is what they have to pay.
No AirBnB, no visits.
I'm happy to avoid anywhere that bans AirBnB. No interest in staying in hotels.
Ebay collects tax on behalf of HMRC, AirBnB will have to accept that they have to collect taxes from hosts. Especially in Italy, which this case suggests is full of tax dodgers.
Re: No AirBnB, no visits.
Somebody who ignores tax laws might also ignore laws like having working smoke detectors or not having hidden cameras in the bathroom.
Re: No AirBnB, no visits.
They are not banning AirBNB. Just making them pay tax on their income like everyone else has to.
Pick and choose
Funny how when you seem to be too big to fail you can pick and choose your taxes.
Something that is not available to small business.
Healthy capitalism needs level playing field and something like this would most likely would force small business to fold (even if the were in the right). Is AirBnB going to fold?
I was told many years ago by people in our Italian office that a visit from the Guardia di Finanzia would be more scary than a visit from the mafia.
The worst the mafia could do was kill you.