Short-term rental platform Airbnb Wednesday mentioned it could pay 576 million euros ($621 million) to the Italian Revenue Agency to settle pending earnings tax obligations masking the 2017-2021 tax years.
Airbnb, which has its European headquarters in Ireland, didn’t admit any legal responsibility as a part of the settlement, which didn’t embody 2022 and 2023.
The quantities which will must be paid for these two years could possibly be “material”, Airbnb mentioned in a regulatory submitting.
The settlement regards the tax obligations of homeowners, or “hosts”, in Italy who use Airbnb to hire out their property. Airbnb withholds a part of the earnings from these hosts and in return assumes their tax liabilities.
Airbnb mentioned it was not in search of to recuperate the sum from its hosts.
Last month, a decide in Italy ordered the seizure of 779.5 million euros from Airbnb’s Irish headquarters for alleged tax evasion.
The probe was associated to Airbnb’s alleged failure to withhold 21% of landlords’ rental earnings and pay it to Italian tax authorities, as required by a 2017 regulation, Milan prosecutors’ workplace mentioned.
The sum of 576 million euros that Airbnb has agreed to pay was reached by subtracting from the 779.5 million determine of alleged tax evasion some 200 million that a number of the hosts had paid independently to the Italian tax authorities, three sources with direct data of the matter mentioned.
The sources additionally mentioned that Milan prosecutors will now ask the decide to launch the 779.5 million euros.
The case might be dropped for 3 Airbnb managers underneath investigation, they added.
The choice was largely anticipated and it mustn’t influence earnings, since it’s a one-off, Richard Clarke, an analyst at Bernstein advised Reuters.
“They are being extremely good to hosts here, effectively paying the tax on their behalf,” he added.
Airbnb had unsuccessfully challenged the 2017 regulation cited by prosecutors in a authorized battle that led to December final yr when the EU Court of Justice dominated within the Italian authorities’s favor.
Prime Minister Giorgia Meloni’s administration has promised to crack down on tax-dodging associated to short-term leases and needs to boost taxes to 26% from 21% for homeowners of a number of short-term rental properties.
Airbnb mentioned it aimed to adjust to new Italian guidelines that make clear how rental platforms ought to withhold earnings taxes for non-professional hosts in Italy.
“We … are preparing to comply by introducing new tools for applicable hosts to have their taxes withheld automatically by Airbnb and paid to the Italian Revenue Agency on their behalf directly,” it mentioned in a press release.
Airbnb mentioned it was additionally making ready to adjust to DAC 7, an EU-wide tax reporting framework for digital platforms.
Source: www.dailysabah.com