The ruling is available in response to a problem from Airbnb to an Italian legislation from 2017 requiring Airbnb and different short-term rental websites to ahead data from their rental contracts to tax authorities and to withhold 21% from the rental revenue and pay it to tax authorities.
The firm challenged the legislation in an Italian courtroom, arguing that taxation and different necessities contravene the EU precept of the liberty to supply companies throughout the 27-country bloc.
“EU law does not preclude the requirement to collect information or to withhold tax under a national tax regime,” the EU courtroom stated in a press release.
“However, the obligation to appoint a tax representative constitutes a disproportionate restriction on the freedom to provide services,” it stated.
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Italy‘s hoteliers affiliation Federalberghi welcomed the ruling, noting it was a plaintiff within the case, and successfully accused Airbnb of shirking its tax duties in Italy.
“Tax evasion and unfair competition damage both traditional tourist businesses and those who correctly manage the new forms of hospitality,” it stated in a press release.
According to Federalberghi, Airbnb has didn’t withold and hand over to the inland income an estimated 1.5 billion euros ($1.6 billion) over the course of six years.
But an Airbnb spokesperson stated the corporate was already supporting the proper cost of host revenue tax by implementing the EU’s agreed widespread tax reporting framework.
“Airbnb does not have a tax representative to enforce the withholding of income tax in Italy, and the CJEU’s ruling makes clear that any requirement to appoint one is contrary to EU law,” the spokesperson stated.
“We will continue to make progress on the EU’s bloc-wide approach to income tax reporting while we await the final decision of the Italian court,” the Airbnb spokesperson stated.