Italy seizes from Airbnb $836M in alleged unpaid taxes Italy's finance police, the Guardia di Finanzia, has seized $836 million (€779 million) from Airbnb that the plod claims is unpaid tax. "Airbnb Ireland has been in active discussions with the Italian tax agency since June 2023 to resolve this matter," the short-term rental biz said in a statement. "We are surprised and …
I can tell you that they claim to have much more sophisticated, and simply, much more firepower than the Italian Armed Services combined.
Long linger drones automatically following super yachts and suppling super resolution video over satellite links, for instance.
Anon as you can guess who owns those sorts of yachts and don't get on well with the Italian Tax Office!
I don't want a horses head in my bed - or jokes about it being preferable to my partner!
I lived in Italy for a few years a while ago and when I first moved there I was puzzled why shopkeepers would virtually chase me down the street to give me my receipt even for quite small purchases. Work colleagues explained that it was a legal requirement to give, and take, the receipt and that the GdF could arrest both the shopkeeper and me for not getting a receipt for the purchase. They told me that the GdF were the last people you ever wanted to get the wrong side of.
>Especially in Italy, which this case suggests is full of tax dodgers.
Yup. As well-resourced as the GdF is, they can't go after every small fish. If AirBnB doesn't withold tax, none of the small renters are going to pay it. Probably a good portion of the big renters too; the GdF may go after a few of them, but they'll just tie it up in litigation and wait until a government decides to rack up a few votes by promising a tax amnesty (a concept that makes my blood boil every time).
If AirBnB does start witholding it, a lot of the renters are going to switch to any other method that doesn't withold tax, so they can continue dodging it. Most likely, they'll advertise on AirBnB, but then, instead of actually renting through AirBnB, they'll do it informally over the phone, pay cash, and dodge everything - tax, health & safety, all of it. Obviously, that would hurt AirBnB immensely; mind you, I have no love for AirBnB's business model, but this is... well, "two wrongs don't make a right" comes to mind.
I've no idea what the right solution could be, but, ultimately, a judge is there to enforce the law, not to solve problems. I respect Judge Minerva's decision, but I don't think this is a problem that can be solved by the judicial branch alone.
In fairness, tax compliance has been slowly getting better in the last decades, but we've still a long way to go. There are so many tax dodgers that they are actually a powerful voting block, which makes it difficult for politics to tackle it in an effective fashion; any politician that promises to really go after tax dodgers is going to gain my vote, but lose many others.
I am Italian. "Hopelessly corrupt" is excessively negative, but more than that it's a gross oversimplification. It's complicated, way too much for a message board post. Do keep in mind, however, that we have a pretty strong tendency to talk crap about Italy to foreigners; I'm not sure why. I've done that myself in the past.
" Do keep in mind, however, that we have a pretty strong tendency to talk crap about Italy to foreigners; I'm not sure why. "
Likely to keep down the influx of "ugly Americans". They don't actually have to be from the US, but so many tourists are highly disrespectful and just coat areas in the high season making it impossible for the locals to get around, eat out or do much of anything.
"instead of actually renting through AirBnB, they'll do it informally over the phone, pay cash, and dodge everything - tax, health & safety, all of it"
Like eBay, I expect that AirBnb does what they can to make sure you aren't contacting the host directly and making deals outside of their service. For the host, they are risking being kicked off and then having to find some other way to advertise their let. I bought some bookshelves and finally got the last of my boxes of books put out on shelves and ran across a directory of BnB and boutique hotels in the UK. I need to look and see if the directory is even published anymore. The vendors pay to be listed and you contact them directly so there wasn't some company sticking themselves in the middle and telling people what to do. Try to search online now for the same information and there will be page after page of "search" results that are useless. I could flip through the book which is organized by region and find a good place to stay much faster. If one was full up, I could find another in a minute and talk to the host about their offerings. On more than one occasion I was able to get a very good rate at the last minute as they normally require a 2 night stay but only had one night available that they'd love to fill. Dealing direct is so much better.
"I'm happy to avoid anywhere that bans AirBnB. No interest in staying in hotels."
I generally prefer a hotel, but I'm not opposed to an AirBnb for some stays. For an extended stay with others, it's more cost effective to get a small home with a kitchen, room to work and be able to lounge about with everybody. I went to a photo workshop one time where I chipped in for home rental though it wasn't AirBnb. We had good internet and places for all of us to plonk down our laptops and work on the images we captured so we could share them with everybody. Being able to cook for the whole group and eat in saved a load of money and time. It was also much cheaper to buy a few bottles and make our own G&T's too.
Well obviously it is the Italian version, because the EU doesn't levy taxes on income, or really on anything. They set the rates for import taxes, and they make some of the rules for IVA (sales tax), but the Agenzia delle Entrate collects all the taxes in Italy including those ones.
"I read it as AirBnB having to figure out which set of rules they need to play by between the Italian and EU versions."
I'm seeing it as where AirBnb is required to submit payment statements in some jurisdictions and Italy wants them to also collect and submit the taxes as well so the hosts don't fail to make the required tax payments. So much simpler to make AirBnb responsible than to have to go after all of the little fish that might not have anything they can be sued out of. The "Deeper Pockets" tactic. It also puts a bunch of work on AirBnb's plate so the Italian tax office doesn't have to do it.
"It is 21% of their income, which actually is pretty low,"
Maybe if that's 21% of net. If it's 21% of revenue, that might be more than what the host will make.
Occupancy tax is yet another way the government is looking for ways to make it more expensive for us to travel so we stay put and are easier to find. They balance the rate with the need for people to travel to generate business income. Things like tourism bring in lots of money in places. Some cities do very well through there being lots of trade shows and conventions being hosted. If the taxes became too much, Disney would have to step in and have them reduced to more people can give them that money at their theme parks. They own a number of politicians and just need to pull a few strings. At least to make sure they'll be exempted for being subject to any increases at their properties.
That 21% is paid instead of income tax on that income. Income tax would probably be north of 40%, so it's extremely generous.
It's still expensive compared to tax dodging, obviously.
>Occupancy tax is yet another way the government is looking for ways to make it more expensive for us to travel so we stay put and are easier to find.
The 21% is not occupancy tax; it's an income tax substitute. It's also much lower than regular income tax, so, contrary to what you seem to be describing, it's actually an incentive to renting. It was, in fact, designed specifically for that reason.
Occupancy tax is a separate thing. It's levied by municipalities, not by the state. Municipalities have absolutely no reason not to want people to travel there; quite the opposite.
Overtourism hotspots are exceptions, of course, but Venice residents not wanting you to go there is hardly a conspiracy. They'll yell it in your face if they get a chance.
Funny how when you seem to be too big to fail you can pick and choose your taxes.
Something that is not available to small business.
Healthy capitalism needs level playing field and something like this would most likely would force small business to fold (even if the were in the right). Is AirBnB going to fold?
Alas, small business does pick and choose what taxes too pay. People with cash based businesses have been evading things like sales and income taxes since those were invented. The difference is that a small business get the tax raid and jail time while the big ones get a subpoena and some compliance order.
"Stando alle verifiche fiscali condotte, Airbnb non avrebbe versato la cedolare secca in merito ai canoni di locazione breve, per una somma totale di 3.711.685.297 euro corrisposta dagli ospiti delle strutture messe a disposizione sulla piattaforma."
I read that as tax due on the €3,711,685,297 they received on the platform [at 21%, so €779,453,912.37], not tax of €3,711,685,297.
Google Translate translates it as
"According to the tax audits conducted, Airbnb would not have paid the dry tax on short-term rental fees, for a total sum of 3,711,685,297 euros paid by the guests of the structures made available on the platform." which I don't think is a very good translation.
Reverso has
"According to the tax audits carried out, Airbnb has not paid the dry coupon for the short lease, for a total sum of € 3,711,685,297 paid by guests of the facilities made available on the platform."
Deepl has
"According to the tax audits conducted, Airbnb allegedly failed to pay the flat-rate tax on short-term rental fees, totalling EUR 3,711,685,297 paid by guests of facilities made available on the platform."
which is probably the best translation of the three, but still not great.
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