settles Italian tax dispute with 94-million euro payment

Sunglasses with the logo of are seen at the new customers site in Tourcoing, France, October 4, 2019. REUTERS/Pascal Rossignol

Sunglasses with the logo of are seen at the new customers site in Tourcoing, France, October 4, 2019. REUTERS/Pascal Rossignol

Published Nov 11, 2023


By Emilio Parodi

Travel website has agreed to pay about 94-million euros (about R1.8-billion) to settle a tax dispute in Italy, Genoa prosecutors said.

The announcement marks another high-profile tax deal between multinationals and Italian authorities, who previously settled cases with luxury groups such as Kering and US tech giants, including Apple, Amazon and Meta's Facebook. welcomed the deal in a statement.

"While we maintain that we are and always have been in compliance with applicable Italian VAT laws, we can confirm that we have come to an amicable, mutual agreement with the Italian Revenue Agency relating to the period 2013 to 2021".

Prosecutors in the northwest Italian port city launched their investigation in 2018 into, which is based in the Netherlands, over the way it handles taxation of properties rented out through its website.

Italy's Guardia di Finanza tax police alleged in June 2021 that evaded 153-million euros of value added tax (VAT) in connection with holiday rentals from 2013 to 2019.

Last November, Dutch magistrates accepted a European investigation order (OIE) sent by Italy allowing Italian prosecutors to question two former chief financial officers as part of the investigation.

Subsequently prosecutors in Genoa extended their tax claims to include the year 2022. Friday's settlement follows direct talks between the company and the Italian revenue agency.

Under the settlement filed its VAT return in Italy for the year 2022, for a tax amounting to more than 19-million euros, and undertook to act as tax substitute for all transactions with private individuals not registered for VAT, according to the prosecutors' statement.

The probe concerned VAT in Italy on payments between private individuals for rental properties advertised by the online travel agent owned by the US group Booking Holdings, based in Delaware. works as an intermediary between property owners and guests.

Private accommodation sites which are not professionally run often have no VAT number, and Italian tax authorities believe the online travel agency should in such cases act as a withholding agent, collecting tax.

The Italian tax police checked 896,500 property owners who worked with and concluded it did not pay VAT due to Italy, saying they believe that failure to levy the tax allowed the business to undercut other hotel groups.

The company had said at the time that hotel and bed-and-breakfast owners were themselves responsible for collecting and paying the VAT they owed in Italy and other European Union countries.

In another similar case involving a company's responsibility to collect tax on behalf of tax authorities, an Italian judge on Monday seized 780 million euros from short-term rentals platform Airbnb.