Quick-term lodging providers firm Airbnb is obliged to supply info in rental contracts to tax authorities, an adviser to Europe’s prime courtroom stated on Thursday, in one other potential authorized setback in Europe for the corporate.
airbnb has in recent times discovered itself at loggerheads with authorities in a number of European Union international locations, arguing that taxation and different necessities contravene the EU precept of the liberty to supply providers throughout the 27-country bloc.
The newest case entails a 2017 Italian legislation requiring Airbnb and different short-term rental websites to ahead info from their rental contracts and withhold 21% from the rental revenue and pay it to tax authorities.
The corporate challenged the legislation in an Italian courtroom which later sought steerage from the Luxembourg-based Court docket of Justice of the European Union (CJEU).
ECJ Advocate Common Maciej Szpunar backed the Italian legislation. His opinion is non-binding however the ECJ normally follows 4 out of 5 such suggestions.
“Article 56 TFEU (Treaty on the Functioning of the European Union) in relation to the liberty to supply providers doesn’t preclude the duty to gather and transmit info or to withhold tax,” Szpunar stated.
“It’s completely constant to impose the duty to withhold tax on intermediaries concerned within the fee of lease, on condition that the exercise of a lot of pure individuals who should not topic to the obligations incumbent on professionals is, by its nature, tough to audit for tax functions.”
He agreed with Airbnb’s argument in a single side.
“Nevertheless, the duty to nominate a tax consultant constitutes a disproportionate restriction on the liberty to supply providers,” Szpunar stated.
Airbnb stated: “Airbnb needs to be a very good associate on tax and we help a constant, standardized strategy to info sharing, which is why we welcome the settlement by EU Member States on a standard tax reporting framework for digital platforms, generally known as DAC 7 “
The CJEU will rule on the case in coming months. In April, the courtroom rejected an analogous problem by Airbnb to Belgian regional laws requiring it to supply info to tax authorities on vacationer transactions.
The case is C-83/21 Airbnb Eire and Airbnb Funds UK.
© Thomson Reuters 2022