Due to suspected tax evasion, Italy’s financial police on Monday confiscated more than 779 million euros ($835 million) from the internet travel company Airbnb.
Prosecutors in Milan ordered the seizure because they believe the location neglected to collect rental income taxes from landlords between 2017 and 2021.
A summary of the charges signed by Milan prosecutor Marcello Viola and released by the financial police claims that Airbnb failed to collect the mandatory flat rate tax of 21 percent on all short-term rentals.
The company said it was “surprised and disappointed” over the seizure, saying it had been in “active discussions with the Italian tax agency since June 2023 to resolve this matter”.
“We are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue,” it said in a statement to AFP.
Airbnb use has grown dramatically in recent years from the United States right across the world, with the service allowing users to find accommodation in a private home rather than a hotel.
The company announced that it has filed a lawsuit against the 2017 regulation, which mandates that short-term rental companies that accept payments withhold income tax from hosts.
In 2022, the European Court of Justice (CJEU) rendered a decision allowing member states to mandate income tax collection from short-term rental platforms.
However, it also discovered that the law’s foundational requirement to designate a tax representative was in violation of EU law, according to Airbnb.
The business further mentioned that the verdict of the CJEU was upheld by an Italian court in October 2023.
Despite criticizing the “inherent complexity and uncertainty” of the law, Airbnb declared that it “continues to believe that it is not subject” to it in light of the CJEU’s decision.