Hard blow for Airbnb, the online platform that connects people looking for temporary accommodation. There Guardia di Finanza of Milan performed a seizure of over 779 million of euros for tax crimes against Airbnb Ireland Unlimited Company, the company that owns the short-term rental platform.
They are also investigated in the operation three people that they covered administration roles within the Airbnb group between 2017 and 2021.
The crime charged to the company is omitted tax declaration.
Don't pay taxes on the "Cedolare dry"
In 'survey conducted by the Milan Prosecutor's Office, yes suspected that the company Airbnb Ireland Unlimited Company has not paid the "dry tax" on short-term rentals, for a total amount of over 3,5 billion euros (3.711.685.297 to be exact). The figure represents the short-term rental fees paid by guests of accommodation facilities between 2017 and 2021.
The note from the prosecutor's office states that "the tax audit revealed that the company did not comply with the obligations introduced from article 4 of Legislative Decree 50/2017, avoiding the declaration and payment, as withholding tax, of withholding taxes equal to the amount of the seizure obtained by the investigating judge, calculated at 21% on short-term rental fees for 3,7 billion relating to the period 2017-2021 from guests of the accommodation facilities advertised by the platform. The amounts were subsequently repaid to the owners of the properties, net of the commission for the use of the digital platform".
Airbnb claimed nonot be required to pay to the Italian government the "dry coupon" at 21% as a substitute tax while Italy had instead asked for further interpretations on the 2017 decree, which dealt with this very issue. After a ruling from the European Court of Justice and a recent decision from the Italian Council of State on 24 October 2023, the Italian prosecutor's office was able to proceed with the seizure actions. A kidnapping that decisively changes the relationship between the two parties.
The Prosecutor's Office: “Airbnb's deliberate choice”
According to the Milan Prosecutor's Office, Airbnb knowingly did so chosen not to comply with Italian tax laws. This corporate policy choice would have been made to "avoid the risk of losing market shares to the competition, by openly obstructing behavior towards the Italian financial administration and by failing to date to make any declaration of any tax payment".
The judge Angela Minerva issued a seizure decree in order to prevent the loss of the amount subtracted from the tax authorities, with consequent damage to tax revenue and to other operators in the sector who regularly comply with tax laws.
For the investigating judge the Airbnb's corporate policy “has not changed”, as demonstrated by the fact that the company continues not to pay taxes, even in the years following the tax inspection conducted by the Milan Financial Police. The public prosecutors Cristiana Roveda, Giancarla Serafini and Giovanni Polizzi, under the coordination of the deputy Tiziana Siciliano, underline that Airbnb has consistently stated that it "is not obliged to pay the flat rate tax and, in practice, has never applied any withholding tax on the royalties received".
Three people investigated
I'm under investigation Patrick Clarke Dermot, Mary Hassel Aisilig e Killian Francis Pattwell, who in the years in question held the rrole of directors within the company with registered office in Dublin, but with tax domicile in Milan, and therefore with a permanent establishment in Italy. He is accused of having contributed to the alleged massive tax evasion.
Airbnb: “I acted in full compliance with the law”
La company replied to the seizure through a note: “Airbnb Ireland has been in discussions with the Revenue Agency since June 2023 to resolve this matter. We are surprised and saddened by the action announced by the Public Prosecutor on Monday. We are confident that we have acted in full compliance with the law and we intend to exercise our rights in this matter."
