Airbnb faces EU crackdown for not paying its ‘fair share’ of taxes | Technology sector
EU finance ministers will discuss how to force home-sharing platforms such as Airbnb 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 on Thursday that a joint proposal for France and Germany will be discussed at a meeting in Tallinn, Estonia on September 16. Brussels will also advise on how best 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 tax last year, despite the country being the room booking company’s second largest market after the US .
In response, French Economy Minister Bruno Le Maire informed the National Assembly that the EU’s Franco-German axis would propose pan-European repression. “These digital platforms make tens of millions of sales and the French Treasury gets a few tens of thousands,” the minister said, adding that the current configuration was “unacceptable”.
The Mayor further told Parliament that an ongoing consultation by the commission and the OECD to address the tax issue “takes too long, it’s too complicated”. Many digital platforms operating in the EU have a base in Ireland, including Airbnb, where they can exploit a low corporate tax regime. The Mayor said: “Everyone must pay a fair contribution.”
In Brussels, a commission spokeswoman, 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 rush into a new area like this without thinking about the best approach to taxing a digitized economy… It’s essential that we maintain a level playing field,” she said. said.
Mock added that developments in the area of the sharing economy would be looked at “very closely” and that Brussels would bring its own ideas to the table.
Airbnb insists he doesn’t make ‘major long-term business decisions based on taxation’ and that he follows the rules and pays all the taxes he owes in the places where he does business . The San Francisco-headquartered platform says the huge amount of money generated by Airbnb 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, energizes local communities and pays local tax. It also makes Airbnb fundamentally different from companies that take large sums of money from where they do business.
However, the company has endured a difficult summer amid growing antipathy towards its business model in popular tourist destinations across Europe, particularly Spainfor having caused an influx of holidaymakers in certain places and made the traditional hotel business more difficult.
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 ruling potentially makes it harder for landlords 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 Barcelonawhere tensions have been mounting for years over the influx of visitors, the impact of sites like Airbnb on the local housing market led to anti-tourist protests. in Majorca and San Sebastianan anti-tourism march is scheduled for August 17 to coincide with Big Weekgreat basque culture festival.
In Ibiza, the authorities cap the number of beds for tourists. Landlords will also be prohibited from renting out their listing, or the rooms in it, through websites such as Airbnb and Far from home unless they get a license. Owners risk 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.