Airbnb's Irish unit has reached a settlement with Italian authorities, agreeing to pay €576 million ($621 million) to resolve allegations of unpaid taxes. The San Francisco-based home-sharing company stated in a regulatory filing that it does not admit any liability as part of the settlement.
Italian finance police had accused Airbnb of failing to pay taxes on approximately €3.7 billion ($4 billion) of hosts' rental revenue. Following an audit of the tax years spanning from 2017 to 2021, authorities claimed that the company owed around €779 million. However, the settlement amount is substantially lower than the initially sought sum.
Airbnb has clarified that it is still in discussions regarding its tax obligations for the years 2022 and 2023. The outcome of these discussions may have a significant financial impact on the company. Despite the settlement, Airbnb shares experienced a temporary boost of 3.1% following the announcement, which dwindled to no change later in the day.
Italy has recently intensified its focus on scrutinizing the tax payment practices of multinational corporations operating within its borders. In 2019, Italian prosecutors launched an investigation into Netflix after the US streaming giant failed to file a return. Earlier this year, Milan prosecutors began examining Meta Platforms Inc.—the parent company of Facebook—for alleged unpaid value-added taxes amounting to approximately €870 million.
While Italian tax authorities have yet to comment on the settlement, this development showcases their commitment to ensuring that global companies fulfill their tax obligations. Airbnb's resolution of this tax dispute represents a significant step towards addressing the issue, although the company still faces ongoing discussions regarding future tax liabilities.