Italy police seize 779 million euros from Airbnb in tax probe

ITALY’S financial police on Monday seized over 779 million euros (S$1.13 billion) from online accommodation service Airbnb for alleged tax evasion.

The seizure was carried out on the order of Milan prosecutors, who accuse the site of having failed to collect a rental income tax from landlords in the period from 2017 to 2021.

Airbnb did not collect the required 21 per cent flat rate tax on all short-term rentals, according to a summary of the accusation signed by Milan prosecutor Marcello Viola and published by the financial police.

The company said it was “surprised and disappointed” over the seizure, saying it had been in “active discussions with the Italian tax agency since June 2023 to resolve this matter”.

“We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue,” it said in a statement to AFP.

Airbnb use has grown dramatically in recent years from the United States right across the world, with the service allowing users to find accommodation in a private home rather than a hotel.

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The company said it has made a legal challenge to the law, which dates to 2017, and which requires short-term rental platforms which process payments to withhold host income tax.

The Court of Justice of the European Union (CJEU) ruled in 2022 that member states could require short-term rental platforms to collect income taxes.

But it also found a requirement to appoint a tax representative, on which that law is based, was contrary to European Union law, Airbnb said.

The company also pointed out that in October 2023, an Italian court upheld the CJEU’s ruling.

Airbnb slammed the law’s “inherent complexity and uncertainty”, but said it “continues to believe that it is not subject” to it, following the CJEU’s ruling. AFP