BRUSSELS (Reuters) – Short-term lodging companies firm Airbnb is obliged to provide information in rental contracts to tax authorities, an adviser to Europe’s prime court mentioned 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 nations, arguing that taxation and different necessities contravene the EU precept of the liberty to provide companies throughout the 27-country bloc.
The newest case entails a 2017 Italian legislation requiring Airbnb and different short-term rental websites to ahead information from their rental contracts and withhold 21% from the rental earnings and pay it to tax authorities.
The firm challenged the legislation in an Italian court which subsequently sought steerage from Luxembourg-based European Court of Justice (ECJ.
ECJ Advocate General Maciej Szpunar, whose opinion is non-binding however the ECJ normally follows 4 out of 5 such suggestions, backed the Italian legislation.
“Article 56 TFEU (Treaty on the Functioning of the European Union) in relation to the liberty to provide companies doesn’t preclude the duty to gather and transmit information or to withhold tax,” he mentioned.
“It is completely constant to impose the duty to withhold tax on intermediaries concerned within the fee of lease, provided that the exercise of a lot of pure individuals who will not be topic to the obligations incumbent on professionals is, by its nature, troublesome to audit for tax functions.”
He agreed with Airbnb’s argument in a single side.
“However, the duty to appoint a tax consultant constitutes a disproportionate restriction on the liberty to provide companies,” Szpunar mentioned.
The ECJ will rule on the case in coming months. In April, the court rejected the same problem by Airbnb to Belgian regional laws requiring it to provide information to tax authorities on vacationer transactions.
The case is C-83/21 Airbnb Ireland and Airbnb Payments UK.
(Reporting by Foo Yun Chee; Editing by Emelia Sithole-Matarise)