Us Resident with a listing in Italy

[Davide725]

Hello everybody, 👋🏻 

We are US citizens with a property in Italy. We’re trying to understand how to manage the tax system in both countries.

In the app, Airbnb asks for tax information, but it’s not clear if I should put the US info or Italian (since the property is in Italy and we’ll have to pay taxes there first).

Any suggestions? Any other Americans with properties in Italy we could connect with?

thank you! 🙏🏻

[Elaine701 · Accepted solution]

I can't speak for Italy, but here in Spain, we pay Spanish taxes. period. And that's the only tax that matters with respect to income and all things associated with your STR. 

If you're not already declaring/paying Italian taxes on the income, I strongly recommend seeking a tax advisor to sort it out for you, because the tax authorities can become rather nasty if blatantly ignored. 

Good luck. 

[Mike-And-Jane0]

@Elaine701 Are you a US Citizen? As @Davide725 is then your statement that Spanish taxes are the only tax that matters would be incorrect. US citizens are taxed on their worldwide income no matter where they reside. Now if the US and Italy have a dual tax agreement then they won't end up paying tax twice but the revenue will still have to be declared in both Italy and the USA and a tax credit from Italy applied to the US tax return.

[Elaine701]

@Mike-And-Jane0 @Davide725 

No, obviously I'm not a US citizen. But although British born, I have German citizenship, and it's the same in Germany. I have to declare my income in Spain. 

However, for Germany, I just include my Spanish tax declarations (the jurisdiction where I pay tax on my Spanish Airbnb income) with my German tax returns, and that's the end of it. 

Nonetheless, the question was "which jurisdiction to tell Airbnb you pay tax on the listing".

A hint: it isn't the US. And if they're not declaring the income in Italy and paying tax on it, there could eventually be a world of hurt. 

The answer, therefore, is your Italian tax number. That's what you give to Airbnb. 

[Mike-And-Jane0]

@Elaine701 I am not sure why it is obvious you are not a US citizen. An ex colleague of mine was born in the USA and hence was a US citizen. All quite useful to enter the USA on an American passport but an absolute nightmare when he moved to a low tax country and yet had to pay US taxes. Renouncing US citizenship cost him a small fortune.