Milan prosecutor confiscates €779 million from Airbnb

This week, Airbnb faced a new chapter regarding its tax problems, all Italian-style. After last September's investigation that uncovered 12,000 unregulated short-term rentals in the city of Rome, the Milan Public Prosecutor's Office seized more than 779 million euros from the company due to an omitted tax declaration. Out of 3.7 billion in revenues in Italy, the short rental platform allegedly committed a tax offence by not paying the 'cedolare secca', namely 21%. According to Milan prosecutor Marcello Viola, three administrators who worked for Airbnb Ireland Unlimited Company between 2017 and 2021 are currently under investigation.

The 'cedolare secca', imposed in Italy in 2011, is a tax regime for home rentals. According to this type of taxation, the owner of a private property is charged a fixed payment of 21%, which, compared to the 'cedolare libero', which is instead based on the citizen's income, can be more or less convenient depending on the case. 779,453,912 euro were seized according to the 'cedolare secca' decree renewed in 2017 in Italy, yet investigations were carried out in 2022 by the Tax Nucleus of the Gdf of Milan, unveiling a de facto crime of omitted tax declaration by the company Airbnb - despite tax payments have always fallen on the individual owners.

According to the note issued by the Milan Public Prosecutor's Office, the company omitted «the declaration and payment of withholding taxes equal to the amount of the seizure obtained by the Gip, calculated at a rate of 21% on the short-term rental fees for 3.7 billion relative to the period 2017-2021 by the guests of the accommodation facilities advertised by the platform.» Backed up by the 22 December 2022 rulings by the Court of Justice of the European Union and the 24 October 2023 ruling by the Italian Council of State, the Milan Public Prosecutor's Office found that from now on Airbnb will be obliged to pay the cedolare secca.