Airbnb Agrees to Settle Italian Tax Dispute with €576 Million Payment

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Airbnb (NASDAQ:ABNB), the short-term rental platform, has reached an agreement to settle a long-standing tax dispute in Italy by paying 576 million euros ($621 million). The resolution follows assertions by Italian prosecutors in November that Airbnb owed approximately 779 million euros ($840 million) in short-term rental taxes for Italian landlords using the platform between 2017 and 2021.

In its statement on Wednesday, Airbnb confirmed the settlement amount and emphasized its commitment not to seek reimbursement from its hosts. The San Francisco-based company expressed its dedication to introducing new tools that would enable hosts to have their taxes automatically withheld and remitted to the Italian tax authorities on their behalf.

Airbnb clarified that the vast majority of its hosts in Italy are ordinary families seeking supplemental income. The company anticipates that the agreement with the Italian Revenue Agency, coupled with recent legislative changes, will bring certainty to these families regarding hosting rules in the years ahead.

In 2022, the Court of Justice of the European Union ruled that member countries could require short-term rental platforms to collect income taxes. Airbnb welcomed the clarity provided by the Italian government in the upcoming year’s budget law, specifying how platforms should withhold income taxes for non-professional hosts in Italy.

The platform’s proactive measures aim to facilitate transparency in historic centers such as Venice and Florence, allowing authorities to monitor hosts and develop appropriate policy solutions. Airbnb expressed its commitment to collaborating with Italian authorities to ensure the success of these regulations.

Italy stands as a crucial market for Airbnb, boasting tens of thousands of hosts who use the platform to rent their properties. The Italian government, led by Premier Giorgia Meloni’s far-right administration, has pledged to combat tax evasion associated with short-term rentals and aims to increase the tax rate for property owners from 21% to 26%.

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