Airbnb Settles Italian Tax Dispute, Agrees to Pay 576 Million Euros

Airbnb has agreed to pay 576 million euros (about $621 million) to settle a tax dispute in Italy. The disagreement spanned several years and involved taxes that Airbnb failed to pay on behalf of landlords using the platform between 2017 and 2021. Rather than asking hosts for the money, Airbnb plans to introduce new tools to automatically withhold and pay taxes to Italian authorities on behalf of hosts. These Airbnb tools will help both landlords and Airbnb stay on the right side of the law.

Italian prosecutors claimed Airbnb owed around 779 million euros (approximately $840 million) in short-term rental taxes. The majority of Airbnb hosts in Italy are live hosts and families who use the the platform for generating extra income. The company hopes that the settlement and new tools will bring clarity to hosting rules for these families.

In 2022, the European Union’s Court of Justice ruled that member countries could require short-term rental platforms to collect income taxes. Airbnb has welcomed the clarity provided by the Italian government’s budget law on how platforms should handle income taxes for non-professional hosts. The company is committed to working with Italian authorities to ensure the success of these rules.

Italy is a crucial market for Airbnb, with many hosts using the platform. The government, led by Premier Giorgia Meloni, has pledged to address tax evasion related to short-term rentals and plans to increase the tax rate for owners from 21% to 26%.