Airbnb agrees to pay approximately 90 billion yen in settlement to authorities over 100 billion yen in unpaid taxes

In November 2023, a judge

ordered the seizure of 779.5 million euros (approximately 120 billion yen) against Airbnb's European headquarters because the private lodging service Airbnb failed to pay appropriate taxes to the Italian tax authorities. Ta. To resolve this lawsuit, Airbnb has agreed to pay a settlement of 576 million euros (approximately 88.8 billion yen) to the tax authorities.

Airbnb to pay $620 mln to settle some Italian tax obligations | Reuters

Airbnb to Pay €576 Million to Settle Italian Tax Claim - Bloomberg

Airbnb to pay €576mn settlement in end to tax dispute in Italy

In Italy, a law was enacted in 2017 that requires short-term rental platforms to collect 21% of rental income from landlords on behalf of the tax authorities. However, in November 2023, a judge ordered that 779.5 million euros be seized from Airbnb because it did not comply with this law and did not pay the appropriate taxes to the tax authorities. In addition, the tax authorities are also investigating three people who held managerial positions at Airbnb from 2017 to 2021, and it has been revealed that they are the joint targets of a seizure order.

Then, on December 13, Airbnb agreed to pay 576 million euros to the Italian tax authorities to resolve allegations of tax omissions between 2017 and 2021. The lawsuits against the three former managers who were the subject of the investigation are also scheduled to be dropped.

The amount that Airbnb has agreed to pay this time seems to be the amount paid by some hosts (users who rented out properties on Airbnb) to the tax authorities from the seizure amount. However, Airbnb did not admit 'any liability' as part of the settlement, and discussions with tax authorities regarding 2022 and 2023 taxes are still ongoing.

While a settlement of approximately 90 billion yen may seem huge, Richard Clark, an

analyst at asset management firm AllianceBernstein, said the decision was largely expected and was a one-time deal. The company said it would not have a major impact on profits. 'Airbnb is very kind to its Italian hosts, effectively paying taxes on their behalf.' Airbnb has also stated that it has no plans to collect any settlement payments from hosts to the Italian tax authorities.

The Italian government, led by Prime Minister Giorgia Meloni, plans to raise taxes on landlords with multiple short-term rental properties from 21% to 26% based on the 2024 budget proposal. Airbnb seems to be preparing to introduce a tool that can automatically withhold income tax paid to the Italian tax authorities, showing an attitude of complying with Italy's new rules.

The Financial Times reports that Airbnb is attracting regulators around the world because it has led to an increase in landlords renting out rooms for business purposes in tourist destinations and big cities, causing problems such as sharply rising rents and a lack of housing for local residents. pointed out that they are being targeted by “Italians are increasingly frustrated that homes in popular destinations are being used for short-term tourist rentals, making it difficult for university students, young families and workers to find a place to live.”

in Note, Posted by log1h_ik