Airbnb to pay $621 million to settle tax case in Italy

Short-term rental platform Airbnb said Wednesday it has agreed to pay Italy's tax agency 576 million euros ($621 million) to settle a dispute over alleged tax evasion.

Italy's financial police seized over 779 million euros from the company last month on the order of Milan prosecutors, who accused the site of having failed to collect a rental income tax from landlords in the period from 2017 to 2021.

"Airbnb Ireland has finalised a settlement" which "covers host withholdings during the 2017 to 2021 period, for an aggregate payment of 576 million euros," the company said in a statement. "We are not seeking to recover any of this sum from our hosts."


It added: "We are continuing our constructive engagement with the Italian authorities for 2022 and 2023."

Neil Saunders, Managing Director at Globaldata, said that while the agreement draws a line under the tax case, "this is material amount of money for Airbnb" and "may have a temporary impact on earnings", though he did not expect it to be onerous.

"Importantly, Airbnb is taking the hit and is not trying to recover the money from hosts. This means that confidence in the firm will not be damaged by hosts and travelers in Italy," he added.

Airbnb use has grown dramatically in recent years across the world, with the US-based platform allowing users to find accommodation in a private home rather than a hotel.

But Italian authorities have been trying to rein in tourist rentals -- in part by fighting tax evasion by owners of short-term lettings.

The online accommodation service said Italy was "an important market for Airbnb", home to thousands of hosts, the majority of whom are ordinary families that use its platform for supplemental income.