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Ireland: Airbnb’s Irish unit has allocated €950 million [$1.002 billion / £794 million] to complying with tax investigations in the countries in which the company and its subsidiaries operate.
The figures were revealed in fresh accounts filed by Dublin-based Airbnb UC. The accounts show that Airbnb’s Irish accommodation service unit’s operating profits rose by 24 per cent to €112.2 million [$118.75 million] last year, revenue jumped by €859 million [$909 million] to €4.82 billion [$5.1 billion], and that the revenue it generated accounted for 51 per cent of the firm’s global revenues in the entirety of last year.
Last December, Airbnb agreed to pay €576 million [$621 million] to tax authorities in Italy after a long-running dispute.
The news came just a month after a judge in Milan ordered the seizure of €779.5 million [$831.6 million] from Airbnb’s European headquarters in Ireland over a probe into alleged tax evasion. At the time, prosecutors alleged that the home-sharing firm had failed to collect a mandatory 21 per cent of landlords’ rental income and pay it to the Italian tax authorities, as per a 2017 law in the country.
In addition, three unnamed people who served in managerial roles at Airbnb between 2017 and 2021, the period during which the violation is alleged to have place, were placed under investigation.
As per the latest accounts, Airbnb’s Irish unit eventually settled the dispute with Agenzia delle Entrate [the Italian tax office] in the second quarter of this year for a lower sum than it was previously ordered to pay.
Following the settlement, Airbnb had $380.85 million [$403.1 million] remaining to deal with the Italian tax liability and other liabilities that may arise later on.
Airbnb opened its European headquarters in Dublin back in 2013 before subletting a portion of the space last year due to a review of its real estate lease arrangements.
Meanwhile, EU diplomats reached an agreement on VAT [value-added tax] rule reforms last month that will result in tax hikes for sharing economy platforms including Airbnb and ride-sharing service Uber.
The EU is aiming to digitalise invoicing for VAT and force platform services to register to pay the levy, thereby modernising the tax process for the digital economy and ensure that platforms pay their fair share of taxes across the bloc.
