Short-term rental companies such as Airbnb will now be required to share rental information and withhold taxes, following a top European court decision this week.
More specifically, the European Court of Justice decided on Thursday that Tax authorities of EU member states have the right to request rental information from short-term rental providers.
Additionally, under the EU ruling, Airbnb-like platforms may also be required to withhold tax under national tax regimes.
Earlier this year, the European Commission presented a set of proposed rules to regulate short-term tourist rentals (STR) and assist authorities in ensuring balanced tourism development as part of efforts to ensure fair play and boost competition.
Among other things, the recommendations required online platforms like Airbnb and Booking.com to automatically share data on the number of nights rented and guests once a month with the public authorities.
The European Court of Justice.
This week’s ruling comes after Airbnb challenged a Italian law which required short-term rental sites to share information of their rental contracts with the tax authorities and retain 21 percent of rental income which they would then pay to the tax authorities.
“EU law does not exclude the obligation to collect information or to withhold tax under a national tax regime,” the EU court said in a statement.
In 2020, Airbnb notified hosts in Greece that 2018-2019 information would be sent to the Independent Public Revenue Authority (AADE) for tax purposes. At the same time, he announced the launch of a new “city portal” allowing local governments to closely monitor registrations.
In November, the Greek AADE declared that it stepping up inspections of short-term vacation rentals to combat tax evasion. The the thorny question of short-term rental sparked reactions in Greece as lawmakers prepare to table new regulatory framework in efforts to reign in the short-term rental business which generates 3.3 billion euros per year.
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