Booking.com Bv, a company based in the Netherlands, settled a tax dispute by paying €94million to the treasury through a membership procedure with the Revenue Agency. The resolution addressed the failure to submit VAT declarations for the years 2013 to 2021, preventing potential seizure.
Following an investigation led by the Chiavari financial police and coordinated by the Genoa prosecutor’s office, Booking.com’s tax evasion came to light.
The inquiry exposed Booking.com’s invoicing practices for online intermediation services provided to all “advertising” hoteliers/room owners. The company failed to collect the applicable VAT and neglected to implement the reverse-charge mechanism for all Italian customers. This mechanism dictates that the VAT on each service is payable not by the supplier but by the client, specifically the hotelier or “landlord,” only if they own the relevant property.
The investigation further revealed that Booking.com applied the reverse-charge regime even to advertisers without a VAT number. In these instances, Booking.com omitted to issue invoices with Italian value-added tax and neglected to file the required annual declarations for VAT purposes spanning from 2013 to 2021.
The Genoa Prosecutor’s Office advanced the investigation with documentation provided by the Dutch judicial authority following a coordination meeting at Eurojust headquarters in October 2022.
In response to the Agency’s requirements, Booking.com submitted a VAT declaration for the year 2022, amounting to over 19 million euros. Additionally, the company adopted an organisational model compliant with the Italian tax system. This model stipulates that if the hotelier client does not provide a valid VAT number for the EU, Booking.com will apply a 22% VAT rate on the invoice. The company will then complete the declaration and pay the tax in Italy for all transactions with private individuals lacking a VAT number.
The Italian authorities are currently pursuing Airbnb for almost €800million in tax evasion.
