Airbnb Settles Italian Tax Probe for $620 Million

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Online travel agencies have been sued for occupancy taxes since 2004, before Airbnb’s founding. Two decades later, the issue is ongoing around the world.

Airbnb settled a tax dispute with Italy for around $620 million (576 million euros), the company said Wednesday.

The agreement between subsidiary Airbnb Ireland and the Italian Revenue Agency covers the 2017-2021 tax years, and includes taxes, interest and penalties, but does not involve assessments for tax years 2022 and 2023. Airbnb said the tax liabilities for those two years “could be material.”

Airbnb didn’t admit any liability as part of the agreement to pay the $620 million.

“The company does not intend to recover any tax withholdings from the impacted hosts for the audited periods although it intends to obtain information regarding hosts’ taxes already paid for 2022 and 2023,” Airbnb said in a financial filing.

In early November, Italian authorities alleged that Airbnb failed to withhold 21% of hosts’ rental income and remit it to tax authorities, and ordered the seizure of $836 million (euro 779.5 million) from the company.

Tax laws vary around the world. In some jurisdictions, platforms such as Airbnb are required to withhold hosts’ rental income, as Italian law demanded, and in others it is the hosts’ responsibility to pay taxes directly to authorities.

Airbnb had earlier filed suit against that aspect of Italian tax law, but didn’t prevail in the EU Court of Justice.

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