Airbnb, automatic collection of dry tax on short-term rentals from January – WWN

Starting this year, Airbnb will withhold a 21% withholding tax from hosts’ fees. After having closed the dispute with the Revenue Agency (the platform will pay 576 million euros for the years from 2017 to 2021), Airbnb now complies with Italian law regarding short-term rentals. The communication was sent to all those who rent accommodation and it explains that the application of the withholding tax, as required by Italian law, concerns precisely the earnings of non-professional hosts deriving from short rentals (up to 30 nights). Examples of non-professional hosts include hosts who do not have a VAT number and who rent less than 5 accommodations. Finally, hosts are asked to indicate, by January 14, 2024, whether to be subject to the 21% withholding tax or not, in the case of a professional activity.. If the host does not communicate his decision by that date, Airbnb will automatically apply the flat rate tax, introduced in 2017, but ignored until last year. In the meantime, however, the Meloni government has changed the law, which from this year sees the flat rate tax of 21% applied only when the taxpayer rents out a single home (if there are 2 to 4 houses the rate rises to 26% for each rented house, above this number not applicable).

The dispute with the Revenue Agency

Last year, the Milan Prosecutor’s Office complained to the platform that it had failed to declare and pay the flat rate tax of 21% on short-term rental fees owed by the company in its capacity as withholding tax for landlords. The investigators had estimated the fees collected in that period by Airbnb at 3.7 billion euros and consequently the taxes not paid to the Italian state at 779 million. This sum was seized by the Prosecutor’s Office at the beginning of November and obtained from the preliminary investigation judge, significantly increasing the pressure on Arbnb. In the end, the agreement with the Revenue Agency had closed the dispute regarding the five-year period 2017-2021, with the company paying 576 million for the withholding taxes due and not paid (of which, 174 million euros as administrative sanctions for violations committed and 49 million interest). The years 2022 and 2023 remain uncovered for which Airbnb has not reached an agreement with the Italian authorities. At the moment, Airbnb has invited hosts to declare 2022 compensation not yet taxed, through voluntary tax return, by February 28th. For 2023, however, the compensation will have to be declared in the next tax return.

The European ranking of short-term rentals

As we know, 2024 will be the year of the revolution for short-term rentals, with the entry into force of the European Union directive to regulate the market, imposing greater transparency and responsibility on platforms such as Airbnb, but also Expedia and Booking. In Europe, in the first half of 2023 alone, guests spent approximately 237 million nights in short-term rental accommodation booked via online platforms. Of these, more than 34 million were spent in Italy, which third on the podium. after almost 47 million nights in Spain and 57 million in France. In the winter months, from January to March, Italy, however, lags behind. In first place in the ranking of the coldest months is the Croatian region of Jadranska Hrvatska, followed by five French regions (Provence, Ile de France, Rhône-Alpes, Aquitaine). Spain is also high in the ranking with as many regions (Andalusia, Catalonia, Canary Islands and Valencian Community), while Italy appears only with Tuscany, in ninth place. With Florence, the only winter queen of Italian short-term rentals.

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