Italian police seize almost €800 million in unpaid tax from Airbnb

The seizure was carried out on the order of Milan prosecutors, who accuse the accommodation booking site of having failed to collect a rental income tax from landlords in the period from 2017 to 2021.

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Airbnb did not collect the required 21 percent flat rate tax on all short-term rentals, according to a summary of the accusation signed by Milan prosecutor Marcello Viola and published by the financial police.

The company said it was "surprised and disappointed" over the seizure, saying it had been in "active discussions with the Italian tax agency since June 2023 to resolve this matter".

"We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue," it said in a statement to AFP.

Airbnb use has grown dramatically in recent years from the United States right across the world, with the service allowing users to find accommodation in a private home rather than a hotel.

The company said it has made a legal challenge to the law, which dates to 2017, and which requires short-term rental platforms which process payments to withhold host income tax.

The Court of Justice of the European Union (CJEU) ruled in 2022 that member states could require short-term rental platforms to collect income taxes.

But it also found a requirement to appoint a tax representative, on which that law is based, was contrary to European Union law, Airbnb said.

The company also pointed out that in October 2023, an Italian court upheld the CJEU's ruling.

Airbnb slammed the law's "inherent complexity and uncertainty", but said it "continues to believe that it is not subject" to it, following the CJEU's ruling.

The profusion of holiday rentals in Italy amid a housing crisis and concerns over overcrowding in tourist destinations have put pressure on the government to clamp down on the industry.

In June, the tourism ministry released a draft law which it said would curb short-term tourist rentals, including Airbnb lets, around the country.

The bill proposes to introduce a national identification code for all lets and a two-night minimum stay requirement in all of Italy’s 14 metropolitan cities, with the aim of promoting longer stays and putting an end to so-called ‘hit and run’ tourism.

In October, Florence's city council moved to ban new Airbnb rentals and other short-term tourist lets, saying residents were being crowded out by visitors.

READ ALSO: Why Italy needs a national plan for sustainable tourism - before it’s too late

“The 40,000 Florentines who live in the centre are complaining about finding themselves, all of a sudden, living in apartment-hotels," Mayor Dario Nardella said in a speech announcing the plans.

Nardella, a member of the centre-left opposition Democratic Party, has criticised the government's proposal, saying it wouldn't have an impact in Florence where "the minimum average stay is already three nights".