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over 779 million euros seized for an investigation by the Milan Prosecutor’s Office

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over 779 million euros seized for an investigation by the Milan Prosecutor’s Office

The Guardia di Finanza has seized, on the orders of the investigating judge, as part of an investigation by the Milan Prosecutor’s Office for tax crimes, over 779 million euros from Airbnb Ireland Unlimited Company, owner of the short-term rental platform of the same name. There are three natural persons under investigation: they held administrative positions within the company in the years from 2017 to 2021. This can be read in a note from the prosecutor Marcello Viola. The “permanent establishment” in our country is contested on the Irish platform. In practice, it is assumed that the company did not pay the so-called “dry tax” on short-term rental payments of 3,711,685,297 euros, paid between 2017 and 2021 by guests of the accommodation facilities. The criminal initiative comes after the pronouncements of the EU court and the Council of State.

The preventive seizure comes at the end of the investigations conducted by the Prosecutor’s Office on the basis of the results of the tax audit carried out by the Milan economic-financial police unit against Airbnb, from which it emerged that the company, due to the activities carried out on Italian territory, did not has complied with tax obligations, avoiding the declaration and payment (as withholding agent) of withholdings of 21% (the so-called “dry tax”) on short-term rental payments for 3,711,685,297 euros paid in the period 2017-2021 by the guests of the accommodation facilities advertised by the platform, in relation to the reservations made, amounts subsequently repaid to the owners of the properties, net of the commission charged for the use of the relevant digital infrastructure.

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The obligation of the foreign company – to withdraw at source on the sums paid by the tenants to the landlords and to subsequently pay the tax evaded – was confirmed by the double scrutiny carried out by the Court of Justice of the European Union (with the sentence issued on 2 December 2022 in case C-83/21, which concerned the compatibility with EU law of the aforementioned Italian legislation introduced in 2017) and by the Council of State which, with sentence number 9188 of 24 October 2023, definitively confirmed the obligation to apply withholding tax to the Irish company.

The real precautionary measure, to be carried out also by resorting to the tools of international judicial cooperation, is based on the contestation of the crime of omitted tax declaration, committed from 30 January 2019 to 30 January 2023 and is motivated both in relation to the subsequent mandatory confiscation, in direct form or equivalently, and due to the deemed danger of prolongation and aggravation of the consequences of the crime, also with reference to the economic damage resulting from the failure to pay the tax due to other operators in the sector who comply with the role of withholding agent envisaged.

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