Italian tax authorities are moving to seize approximately €779 million from Airbnb due to allegations of unpaid taxes owed by landlords using the platform. This development highlights the increased scrutiny surrounding short-term rentals in major cities across Europe and the United States.
The seizure was mandated by the Milan-based public prosecutor’s office specializing in tax offences. The sum corresponds to the amount Airbnb failed to remit on behalf of landlords between 2017 and 2021.
Airbnb’s European division based in Ireland garnered around €3.7 billion in rental income in Italy during this period, with 21% designated for taxes. The situation regarding whether specific landlords will face charges remains unclear.
Airbnb previously contested the legality of the tax on short-term rentals, introduced in 2017, in a European Union court. However, it lost the case in December last year and has yet to pay the outstanding taxes. Prosecutor Marcello Viola revealed that three individuals who held roles as Airbnb administrators in Italy are also confronting unpaid tax accusations. Airbnb can still contest the ruling.
Comparable instances include Google agreeing to pay Italy €306 million for taxes from 2009 to 2015 in 2017, and Italy reaching a similar unpaid tax settlement with Apple for €318 million in 2015.
These developments occur as Italy’s Prime Minister Giorgia Meloni’s government seeks to combat widespread tax evasion within the country and increase the tax rate on short-term rentals, such as those offered by Airbnb, from 21% to 26%.
Foreign Minister Antonio Tajani stated that new rental codes are set to be introduced, targeting individuals who fail to declare profits from short-term rentals. This measure is expected to potentially boost Italy’s fiscal revenue by €1billion annually.
As well as financially, Airbnb is also being squeezed by popular tourism destinations banning short-term rentals in historic centres.
