Airbnb Faces Court Over Tax Dispute
Italian Justice Seizes €780 Million

Airbnb is at the center of a comprehensive tax dispute in Italy, now facing a significant hit to its finances. Milan prosecutors have accused the company of not paying taxes on short-term rental income from 2017 to 2021. With the introduction of a flat tax rate of 21% on rental income in Italy in 2017, these taxes became mandatory. Airbnb, which initially contested this new tax regulation, was rebuffed in December by the European Court of Justice, which confirmed the tax obligation.
The seizure of nearly €780 million ordered by an investigative judge marks a dramatic peak in this dispute. According to the prosecution, this amount represents the tax debts accumulated from Airbnb's business operations in Italy over the said period. Authorities estimate that the platform generated total revenues of €3.7 billion during these five years, on which no taxes were paid.
Airbnb appears to be taken aback by the decision, expressing dismay. The company claims to be in constant contact with Italian tax authorities and asserts that it has always acted in compliance with the law. Airbnb reaffirmed its intention to protect its rights, signaling potential further legal battles.
However, this action by Italian justice is not an isolated incident but part of a bigger picture. The current Italian government plans to increase the flat tax from 21 to 26 percent in the future. This is seen as an attempt to tackle several issues at once: housing shortages in big cities, rising rent prices, and the strained situation caused by tourism. The higher taxes could aim to deter landlords from exclusively renting their properties to tourists, reducing the availability of housing for locals.
