An adviser to the European Court of Justice declared that Italy can coerce Airbnb to collect rental income tax and share data about its transactions with tax officials. Advocate General Maciej Szpunar found an Italian law designed to rein in tax dodging in the rental market is compatible with EU law. Italy assesses a tourism tax to help maintain public infrastructure used by tourists, which is typically levied per person per day and collected by hotels. Airbnb's growing popularity has been accompanied by reduced tax collection as tourists book accommodations through the platform. In 2017, Italian lawmakers passed legislation requiring Airbnb to collect a 21 percent flat-rate tax, and also to disclose the financial details of all rental transactions to the Italian tax authorities. Airbnb refused on the grounds that it violated the EU's guarantee that companies can freely provide services in any of its member states, but Szpunar opined that EU rules broadly permit nations to require companies to withhold taxes; he also said the tax is non-discriminatory, as the law does not tax Airbnb directly but rather taxes Italian real estate. Yet Szpunar found a part of the law requiring Airbnb to appoint a tax representative created unduly burdened the company. "Airbnb wants to be a good partner on tax and we support a consistent, standardized approach to information sharing,” the company stated, while a final decision is anticipated in the coming months.
Courthouse News Service (07/07/22) Molly Quell