Airbnb faces EU crackdown for failing to pay its “fair share” of tax | Technology sector

EU finance ministers will discuss how to force home-sharing platforms like Airbnb to pay their fair share of taxes and in the right tax areas next month after France’s economy minister called the current situation “unacceptable”.

The European Commission announced Thursday that a joint proposal from France and Germany will be discussed at a meeting in Tallinn, Estonia, on September 16. Brussels will also advise on the best way to manage the so-called sharing economy, in which Airbnb is a major player.

It was revealed this week that Airbnb paid less than € 100,000 (£ 90,336) in French taxes last year, despite the country being the room reservation company’s second-largest market after the United States. .

In response, the French Minister of the Economy, Bruno Le Maire, informed the National Assembly that the Franco-German axis of the EU would propose a pan-European repression. “These digital platforms make tens of millions of sales and the French Treasury obtains a few tens of thousands”, declared the minister, adding that the current configuration was “unacceptable”.

The Mayor also told Parliament that an ongoing consultation conducted by the commission and the OECD to deal with the tax issue “was taking too long, it’s too complicated”. Many digital platforms operating in the EU have a base in Ireland, including Airbnb, where they can operate a low corporate tax regime. The Mayor said: “Everyone has to pay a fair contribution.”

In Brussels, a spokesperson for the committee, Vanessa Mock, told reporters the issue was sensitive because any reform required the agreement of all member states. “Taxation is complicated and it’s a matter of unanimity and that’s why we can’t necessarily get into a new field like this without thinking about the best approach to tax a digital economy … It is essential that we maintain a level playing field, “she said. noted.

Mock added that developments in the area of ​​the sharing economy would be scrutinized “very closely” and that Brussels would bring its own ideas to the table.

Airbnb insists that he does not make “big and long-term business decisions on the basis of taxation” and that he follows rules and pays all the taxes he owes in the places where he does business . The platform, headquartered in San Francisco, claims that the huge amount of money Airbnb generates stays with hosts and their communities.

A spokesperson said: “We follow the rules and pay all the taxes we owe in the places where we do business. Our office in France provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the French economy by 6.5 billion euros last year alone. It empowers ordinary people, stimulates local communities and is subject to local tax. It also makes Airbnb fundamentally different from companies that withdraw large sums of money from the places where they do business. ”

However, the company has had a tough summer in the face of a growing antipathy to its business model in popular tourist destinations across Europe, particularly Spain, for causing an influx of vacationers to some places and making it harder for traditional hotels.

The Paris city council has already voted to make it compulsory from December 1 to obtain a registration number from the town hall before publishing a short-term rental ad on its website.

The decision potentially makes it harder for owners using Airbnb to exceed the legal rental limit of 120 days per year for a primary residence, and easier for authorities to collect local taxes.

In Barcelona, ​​where tension has been mounting for years in the face of the influx of visitors, the impact of sites like Airbnb on the local housing market led to anti-tourist protests. In Mallorca and San Sebastian, an anti-tourism march is scheduled for August 17 to coincide with Grande Semana, a major festival of Basque culture.

In Ibiza, the authorities cap the number of beds for tourists. Homeowners will also be prohibited from renting out their home or rooms therein through websites such as Airbnb and Far from home unless they get a license. Homeowners face fines of up to € 400,000 if they break the law. Websites face the same fine for letting people advertise without a valid license number.

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