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Airbnb Obliged to Provide Details to Tax Authorities, Says EU Court Adviser

Brief-term lodging companies firm Airbnb is obliged to supply data in rental contracts to tax authorities, an adviser to Europe’s high courtroom mentioned on Thursday, in one other potential authorized setback in Europe for the corporate.

Airbnb has lately 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 companies throughout the 27-country bloc.

The newest case entails a 2017 Italian legislation requiring Airbnb and different short-term rental websites to ahead data from their rental contracts and withhold 21% from the rental earnings and pay it to tax authorities.

The corporate challenged the legislation in an Italian courtroom which subsequently sought steerage from the Luxembourg-based Courtroom of Justice of the European Union (CJEU).

ECJ Advocate Common Maciej Szpunar backed the Italian legislation. His opinion is non-binding however the ECJ often 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 companies doesn’t preclude the duty to gather and transmit data or to withhold tax,” Szpunar mentioned.

“It’s completely constant to impose the duty to withhold tax on intermediaries concerned within the cost of hire, provided that the exercise of numerous 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.

“Nonetheless, the duty to nominate a tax consultant constitutes a disproportionate restriction on the liberty to supply companies,” Szpunar mentioned.

Airbnb mentioned: “Airbnb desires to be an excellent companion on tax and we assist a constant, standardised method to data sharing, which is why we welcome the settlement by EU Member States on a standard tax reporting framework for digital platforms, often known as DAC 7.”

The CJEU will rule on the case in coming months. In April, the courtroom rejected an identical problem by Airbnb to Belgian regional laws requiring it to supply data to tax authorities on vacationer transactions.

The case is C-83/21 Airbnb Eire and Airbnb Funds UK.

© Thomson Reuters 2022

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