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Airbnb said on Wednesday that it has agreed to pay the Italian Revenue Agency the money in respect of the 2017 to 2021 tax years, but has not admitted any liability.
Italian authorities claimed that Airbnb had failed to pay taxes on about €3.7bn of rental revenue.
And while Airbnb said it won’t be pursuing hosts to recover any of the tax it has paid on their behalf, it said that anyone who hosted through the company in Italy during 2022 and 2023 might not be let off the hook.
Airbnb said it intends to seek information from hosts in Italy for last year and this year to see what taxes they’ve already paid.
“Such agreement settles the withholding tax on host income tax obligations of Airbnb Ireland, including taxes, interest and penalties for the audited period,” Airbnb noted in a statement on Wednesday regarding the agreement with the Italian tax authorities.
Airbnb said the settlement does not including any tax withholding assessments for 2022 and 2023, the amounts for which “could be material”.
“The company does not intend to recover any tax withholdings from the impacted hosts for the audited periods although it intends to obtain information regarding hosts’ taxes already paid for 2022 and 2023,” the company stated.
Since 2017 in Italy, the law requires short-term rental platforms that process payments to collect and remit host income tax and tourist tax, among other obligations.
Airbnb had challenged this law before the Italian courts and the Court of Justice of the European Union (CJEU).
But in December last year, the CJEU found that European law does not prohibit member states from passing legislation requiring short-term rental platforms to withhold income taxes from their hosts.
Airbnb’s noted last year that its subsidiary in Italy and its Irish unit were subject to tax audits in Italy, including in relation to permanent establishment, transfer pricing, and withholding obligations.
“Such audits could result in the imposition of potentially significant prior and future tax obligations,” it had previously warned.
Airbnb Ireland posted an $82.8m (€76.7m) profit last year, which compared with $114.7m in 2021. Its turnover rose to $4.2bn from $2.8bn.
The San Francisco-based company employs about 400 people in Ireland.
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