Italy to seize $835m from Airbnb in tax evasion inquiry

Rome: An Italian judge has ordered the seizure of €779.5m ($835.5m; £676.8m) from short-term rental giant Airbnb, over alleged tax evasion.

Prosecutors say the firm failed to collect a tax from landlords on around €3.7bn of rental income.

Landlords in Italy are required to pay a 21% tax on their earnings.

Airbnb told the BBC that it was “surprised and disappointed at the action announced by the Italian public prosecutor”.

Airbnb spokesperson Christopher Nutly said the firm’s European headquarters had been working to resolve the matter with the Italian tax agency since June.

Mr Nutly added “We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue.”

Three people who held managerial roles at Airbnb from 2017 to 2021 were also under investigation, Milan Tribunal prosecutors said in a statement.

In 2022, Airbnb challenged the Italian law requiring the company and other short-term rental providers to withhold 21% of the rental income from landlords and pay it to tax authorities.

The firm argued that Italy’s requirements on taxation contravened the European Union’s principle of freedom to provide services across the 27-country bloc.

The EU’s top court later ruled that Airbnb should abide by the requirements.

In recent years, Italian authorities have increased scrutiny of the tax practices of major companies like Airbnb, which has been operating in the country since 2008.

Italian prosecutors have launched tax-related inquiries against Netflix and Meta, according to media reports.

Last month, Italian politicians said they planned to crackdown on landlords who did not pay taxes on short-term rentals through platforms like Airbnb.

The co-ruling Forza Italia party said the country would move to introduce a national identification code for short-term rentals.

“That code will bring out the revenue of those who rent flats without declaring them,” Forza Italia leader and Deputy Prime Minister Antonio Tajani told reporters.

Politicians estimate that the move could boost Italy’s fiscal revenue by €1bn.