Italian law enforcement recently seizied a staggering €779.5 million from the renowned short term rental giant Airbnb. Their motive? Allegations of tax evasion.
Prosecutors are claiming that Airbnb dropped the ball when it came to collects taxes. Specifically, they’re saying Airbnb should’ve been collecting a hefty 21% tax from Italian property owners who were renting out their places through Airbnb between 2017 and 2021. But it appears they failed to do so.
This crackdown wasn’t limited to Italy alone; it reached Airbnb’s European headquarters in Ireland. Not just that, they also singled out three individuals who were in influential roles during the period in question.
This isn’t Airbnb’s first legal skirmish in the realm of taxes. In a previous attempt to challenge an Italian law, they went to the Court of Justice of the European Union, and that endeavour didn’t quite their way. The court ruled in 2022 that member countries have the right to require platforms like Airbnb to collect income taxes.
This whole situation underlines the ongoing scrutiny that digital platforms, especially the big players like Airbnb, face when it comes to their tax responsibilities. The rules in this digital landscape are still evolving.
Airbnb might be facing even more challenging times ahead, as the government led by Prime Minister Meloni is considering increasing the tax rate on short-term rentals to a hefty 26%.