AirBnB agreed to pay more than $621 million in taxes to the Italian after a years-long dispute over a 2017 tax law that forced the rental company to pay taxes on its users’ properties.
AirBnB finalized a tax settlement with the Italian Tax Agency on Wednesday, agreeing to pay 576 million euros ($621 million) in unpaid taxes from 2017 to 2021.
The company is still negotiating a “constructive settlement” with the tax government for 2022 and 2023, but prosecutors insisted in November that it owes a total of more than $840 million since a 2017 tax law went into effect.
AirBnB agreed to pay the sum without admitting liability, and said it would not seek to recover any money from hosts on the platform.
AirBnB said it had “welcomed” the new rental regulations in Italy, even after Italian Prime Minister Giorgia Meloni indicated she planned to raise taxes on short-term rentals by as much as 26%.
Italy passed a law on short-term rentals in 2017, requiring short-term rental providers to withhold 21% of the landlords’ source of income and remit it directly to the tax authorities. Last month, Italian prosecutors said the company had failed to comply with the law. since its approval and owes up to $840 million. An Italian court ordered the seizure of the budget of the company’s European headquarters in Ireland. AirBnB tried to challenge the Italian law before the Court of Justice of the European Union, arguing that the tax needs violated the EU’s precept of freedom to provide services. The court ruled against the rental company, ordering it to provide data on its tenants to the Italian tax authorities.
Europe is the only market imposing new regulatory pressure on AirBnB and other short-term rental apps. New York City passed Local Law 18 in 2022, which cracks down on proconsistent unsigned short-term rental agreements. The law limits short-term rentals to just two other people, according to Proconsistent Withty, prohibits landlords from locking doors or restricting access to any component of the home, and requires providers to register with the city’s verification system. Local Law 18 went into effect in September 2023 and has already shaken up the city’s short-term rental economy. Restoring Owner Autonomy