Italy Seizes £677m From Airbnb In Tax Dispute

An Italian judge has ordered the seizure of 779.5 million euros ($832.8m, £677m) from short-term rental company Airbnb over alleged tax evasion, Milan prosecutors said on Monday.

The move comes as part of a probe into the company’s alleged failure to comply with a 2017 law that obliges landlords to withold 21 percent of their income for payment to Italian tax authorities.

The alleged infraction concerns about 3.7bn euros in rental income, Milan Tribunal prosecutors said in a statement.

Three people who held managerial roles at the firm between 2017 and 2021, the period of the alleged violation, are also under investigation and are jointly targeted by the seizure order, prosecutors added.

Tax challenge

Airbnb, whose European headquarters is in Ireland, said it was “surprised and disappointed” by the decision and that it had acted in full compliance with the law.

“Airbnb Ireland has been in active discussions with the Italian tax agency since June 2023 to resolve this matter,” the company told Silicon UK.

The firm added that it intended to “intend to exercise our rights” in the matter.

In 2022 Airbnb challenged the 2017 law, arguing it contravened the EU’s principle of freedom to provide services across the bloc.

The challenge ended last December when the EU’s top court sided with the Italian government.

Tax probe

Italian prosecutors have in recent years launched tax inquiries into firms including Netflix and Facebook parent Meta.

Last month the country’s current administration said it planned to crack down on landlords who did not pay taxes on short-term rentals through Airbnb and similar platforms.

The government also plans to raise the tax to 26 percent from 21 percent for owners of multiple short-term rental properties.

A number of countries, regions and cities around the world have been placing additional restrictions on Airbnb in recent months, with New York City implementing rules in September that Airbnb called a “de facto ban”.