The New Airbnb Law in Italy

[Katarina13]

Ciao from Tuscany - and hello especially to everyone hosting in Italy! Does anyone know about how the new AIRBNB LAW IN ITALY works in practise? I know that as of yesterday (1 June, 2017) a new law, called 'Airbnb Law' has come into force here in Italy, and it stipulates that (when it comes to rental periods less than 30 days) Airbnb should pay the taxes to the Italian state (using 'cedolare secca'). Then we the hosts, pay the taxes for those rents to the Italian state (always using 'cedolare secca'), and only afterwards the state refunds Airbnb. This is how I have understood it, and, moreover: the Airbnb should give us a document - a certificate - that it has paid the taxes. And this is something we'll add to our tax report.

Now, I have received no news from Airbnb about this law. Nor have I received any 'certificates'. I've contacted Airbnb twice but so far have received no reply at all. So I am rather clueless as to what is happening and what to do in this new situation. If there's anyone with more information, I'd be immensely grateful to hear it! A big grazie! 

[Paolo285]

Gingy, Mi sembra strano che la guardia di finanza si interessa dal momento che ti sei iscritta con il tuo comune per la regolarizazione della tassa di soggiorno e con la questura per la dichiarazione di arrivi. Comunque sia, tienici a corrente come va questo affare. PB

[Gerard192]

I think I know the real reason for this law..very sneaky smart of the Italian government.

Many owners live in other countries and so under normal international double taxation treaty rules pay tax on their Airbnb earning in their home country.

By applying withholding tax they get the tax in Italy.

Just like what happens to bank accounts you have in your mom home country 

Very smart those Italians.

Of course under the rules the differential will still have to be paid in your home country. Most people just don't declare it though I think.

Seams a decent approach..

What do others think ?

[Emily352]

Decree Law n°50/2017 was not designed for owners who are abroad, @Gerard192, but it is being set up to collect a few more taxes on short tourist rentals, namely rentals not exceeding 30 days.

Italy is a tourism-oriented country. Since there is no obligation to register contracts under 30  days, the smart italian and foreign owners paid italian tax authorities nothing.

Precisely in order to compensate for the inefficiency of the rule regarding the obligation to register contracts under penalty of nullity, the Italian legislator involves the intermediaries that maintain web portals in this  tax.

The new mechanism provides that the intermediaries of the digital economy or web portals that collect rental charge (e.g. AIRBNB) pay the State a 21% withholding tax on short-term rentals. AIRBNB complained to the Council of State, but the action brought by AIRBNB was dismissed.

This, then, is the heart of the law that essentially intends to counter a considerable tax evasion in this specific market segment: tourist contracts. The law uses the same weapons of potential tax evaders and therefore involves web portals by which the contracts are concluded and the rents for short leases are collected.

It's too soon to say how it will turn out the game between the Italian State and AIRBNB, all I can tell you is the “lease contract” in Italy continues to be characterized by an overabundance of laws and Italy has the most confusing fiscal laws in the world.

[James1445]

Hi Emily,

Thanks for providing this good info.  I have a unit in Rome that I manage the listing for but belongs to an Italian friend here in the US.  So far, I have been deducting and forwarding him the Italian state tax portion of the revenue(21%), as well as the city tax Rome has(€3 per night), under the arrangement that he would forward that amount to his parents so they could pay the tax on it.  After reading more on this thread, I am now worried that (A)Airbnb has been holding back these taxes already and forwarding them to the government, and I have essentially been double-taxing myself, and (B)I have been forwarding my friend money that I will end up having to pay at some point.  Any thoughts or updates that you know that could help me decide if I need to stop withholding the tax and/or stop forwarding that money?

Thanks, James

[Emily352]

@James1445 

AIRBNB has not been holding back these taxes already and forwarding them to the Italian Government. AIRBNB still won’t levy a withholding tax at the rate of 21%. The controversy with the Italian Government over this deduction continues to rage. After the defeat at the Lazio Regional Administration Court, AIRBNB appealed again to the Council of State. We'll see what happens, but for the time being the sums paid to hosts are not subject to any deduction at source.

[James1445]

Thanks Emily! I also learned from Airbnb that the the €3 daily Rome municipal tax is actually paid by the guest and forwarded to the city, so I have removed that from my expenses. 

Regarding the state tax withholding controversy, my only other point of concern is whether Italy will pursue these taxes retroactively from hosts if and when they get Airbnb to cave.  I suppose there's no way to know that now though.

[Emily352]

@James1445 

AIRBNB has not applied the withholding tax, it has thus paid Italian host 100% (not 79%) of the rent: until now the host has always paid on time the flat tax (cedolare secca) or the ordinary rate (IRPEF)  in 2018.

The responsibility for the suspected non-compliance with the Italian Decree Law lies only with AIRBNB in this field, since the host, technically, hasn’t committed any infringement: he continues to pay all his taxes the same way he did before (flat tax at the rate of 21% or ordinary rate from 23% to 43%).

The problem arises for those taxpayers who have included the withholding tax when they've  filed their tax return, since AIRBNB has never forward those taxes to the Italian Government: in this case those people may be sanctioned by the Revenue Agency and become jointly and severally liable with AIRBNB for unpaid taxes (those people have paid lower taxes) without prejudice to a direct recourse against the substitute for taxes (AIRBNB).

[Veronica42]

Hello Emily, and thank you so much for trying to help. If I understand well your message, you're saying that AIRBNB is not holding the 21% tax for short rentals. However when I read the section below on the AIRBNB site, I get to understand AIRBNB can collect such tax from hosts? Although they don't specify in which jurisdictions they do that.... How can I instruct AIRBNB to do that for me? Any thought? Thanks  "8.2 Collection and Remittance by Airbnb. In jurisdictions where Airbnb facilitates the collection and/or remittance of Taxes on behalf of Hosts, you instruct and authorize Airbnb to collect Taxes on your behalf, and/or to remit such Taxes to the relevant Tax authority. Any Taxes that are collected and/or remitted by Airbnb are identified to Members on their transaction records, as applicable. Airbnb may seek additional amounts from Members (including by deducting such amounts from future payouts) in the event that the Taxes collected and/or remitted are insufficient to fully discharge that Members’ tax obligations, and you agree that your sole remedy for Taxes collected by Airbnb is a refund from the applicable Tax authority. You acknowledge and agree that we retain the right, with prior notice to affected Members, to cease the collection and remittance of Taxes in any jurisdiction for any reason."

[Jane556]

Can someone say something about the 30-day rule? So far all my bookings for for 30 days. What difference does that make? Thanks.

[Gisele52]

I have reserved and paid for an apartment in Taormina, Sicily for the end of Spetember. The owner just wrote to me that my reservation will be cancelled because of the new law in Italy. He says that he must own a company if not he cannot rent his place with AirbnB anymore. I don't see nothing about this matter in the discussions on this site. Can anyone telle me more please? 

[Emily352]

The owner tells you lies, @Gisele52. The new law (DL 50/2017) has introduced important tax news for short leases (for a period non exceeding 30 days) including those that include the supply of linen and cleaning of the flat, but not breakfast or meals: only contracts stipulated by natural persons who do not act in the business of a company, either directly or through physical or online intermediaries.

[Leilei0]

Being a foreigner and doing Airbnb in Italy is super difficult due to the complicated Italian law and Language problem, and no real government office could give a clear and detailed answer. I hope Airbnb Italy can give everyone English and Italian info about how to register your property and how to pay tax, step by step, which office to go, etc. So everyone can do Airbnb legally without any risk. 

[Tommaso62]

Voglio esprimere il mio sdegno, e quello di tutti gli host che conosco - che la pensano tutti esattamente come me - riguardo al comportamento di Airbnb circa la cedolare secca e il sostituto di imposta.

Il vostro comportamento è vergognoso, inaccettabile e incondivisibile.

Avete perso tutti i ricorsi possibili (TAR e Consiglio di Stato) e ancora non vi arrendete a fare ciò che lo stato vi ha IMPOSTO di fare.

In quanto membro della vostra comunità sono seriamente difficoltà se continuare a far parte di un sistema così arrogante qual'è il vostro. La mia morale mi impedisce di essere connivente con voi.
State perdendo una grande opportunità di mostrarvi civili e rispettosi.
Mi fate schifo.

[Emily352]

Posso comprendere (attento, però, che la telenovela della “tassa AIRBNB” non è ancora finita, @Tommaso62), ma questa è la comunità di lingua inglese di AIRBNB, non è la multinazionale AIRBNB con sede legale in Irlanda. Siamo host come te.

In verità, io stessa, folgorata dalla filosofia un po’ svitata degli esordi (l’idillizzazione della condivisione informale: una vecchia speranza tradita, ma ancora oggi  viva in me), allevata in seguito come certi polli da batteria, osservata, catalogata, recensita, indottrinata a raggiungere un punteggio prestabilito da altri e ad una stilosa eleganza di facciata, ammaestrata incessantemente da un algoritmo della consolazione per massimizzare il profitto dell’azienda, da tempo ho sciolto le briglie, scartando di lato.

In questa locanda, un po’ spartana, ma decisamente accogliente e sicura, gli avventori condividono pensieri, esperienze e talora piccole ribellioni controllate, ma la maggior parte degli host, per portare a casa la pagnotta (con esiti a volte molto approssimativi), resiste come può, altri, più o meno ombrosamente, inconsapevoli e felici, tornano a camminare nei solchi tracciati da un portale invasivo in quel tratto di strada che la sorte ha messo loro davanti.

Best regards

Emily

[Tsvetan0]

Dear Emily,

I totally agree with you. We feel so rip off by the way AIRBNB work. What you described are very accurate. 

AIRBNB has allowed our guests to demand impossible things. They rented a place of 82 sqm with stunning sea view for little money. Instead of enjoying what are there, they have walked around the house and use 5 times zoom to make photos of one hair droped  on the floor and one  insect as small as 3 mm and demanded refund. Another guests were complaining about the neighbors on their balcony where as there are 2 seaview balconies and one of them stand alone. Instead of moving to the stand alone one, they called us to the place and complaint. The word "Proactive" is not in their dictionary. 

We were being bullied during the negotiation and the customer service was racist. They told us they will deal with the matters and let us know. We have not heard anything from them and this was 4 months ago. 

AIRBNB need to make the people who book understand that they are staying in "someone's house" and not a hotel! Our cleaning and maintainence standard is much better than some 3 star hotels in Cyprus.

But it is plain wrong for AIRBNB to allow guests to behave like this. We are very often guests as well but we cook and clean for our hosts.

Regards,