Short-term accommodation rental service Airbnb must disclose information from rental contracts to tax authorities and withhold tax based on national tax regimes, according to a ruling today by the Court of Justice of the European Union.
The ruling comes in response to an appeal by Airbnb against an Italian law that since 2017 requires Airbnb and other short-term rental websites to disclose details of their rental contracts to the tax authorities and to withhold 21% tax from rental income and remit it to the tax authorities.
The company challenged the legislation in an Italian court, arguing that the taxation and other obligations contravene the European principle of freedom to provide services in the 27-member bloc.
The Italian court then asked the Court of Justice of the European Union for an opinion.
«Union law does not preclude either the obligation to collect information or the withholding of tax imposed by a national tax regime,» the EU Court of Justice said in a statement. «On the contrary, the obligation to appoint a tax representative constitutes a disproportionate restriction on the freedom to provide services.».
