Short-term rentals: online portals should charge a flat tax per dry tax.

Even Airbnb and other online bookers must collect and remit to the Italian state a tax on short-term rentals. This was announced by the Council of State Security in Decision No. 9188 of October 24, 2023.

The appeal of the Internal Revenue Service has been granted, challenging the administrative court's decision in favor of Airbnb. A highly anticipated decision that reflects guidance from the European Court of Justice last December.

Tax on short-term rentals and short-term lets

The issue concerns the tax regime for short-term rentals introduced by Regulation No. 50 of April 24, 2017. The regulation provides an obligation for companies, such as Airbnb, that operate online portals connecting people,''looking for rented accommodation, to make a withholding of 21% of the amount of rent and remuneration upon payment, which is then transferred to the budget.

It is also envisaged that persons carrying out property intermediation activities or managing online portals will act as tax agents if they are resident in Italy or have a stable organization here. Where the same entity is not resident in Italy and does not have a stable organization, it will have to appoint a tax representative to carry out tax obligations as a responsible person rather than a tax agent.

All obligations Airbnb refused to fulfill, deeming Italian''legislation discriminatory and contrary to European law.

The decision of the State Security Council

The State Security Council may now have put the matter to rest. Or at least that's the hope of the Federal Hoteliers Association, which welcomes the decision with satisfaction.

"The Federal Hoteliers Association participated in the litigation on the side of the IRS to promote market transparency," the statement said.

The amount of lost revenue

The Federal Association of Hoteliers speaks of 500 million euros in unpaid Airbnb taxes to the Italian treasury, emphasizing that "the non-payment of taxes is only one of the many problems caused by the 'wild west'\'\'short-term rentals'" and expressing hope for "regulations, controls and sanctions to protect customers, workers, citizens and businesses. "

European Court of Justice

The State Security Council, as already mentioned, fully embraces the decision''European Court of Justice of December 22, 2022. The Italian tax system, according to the EU Court of Justice, has the right to collect information and data on the leases made and, most importantly, to apply the withholding of tax at source provided for by the national tax system. Furthermore, this is in line with the stricter European legislation on digital platforms. In fact, as of January 1, 2023, taxpayer codes, income received and cadastral data of leased properties must be submitted to the IRS.

Airbnb

Airbnb accepts the decision of the State Security Council. "We are reviewing the decision and evaluating the most appropriate action to be taken," the statement said, in''which also emphasizes the intention to "cooperate with the tax authorities" and support "the correct payment of taxes by hosts, applying the relevant European reporting legislation known as Dac7".