Italy is allowed to oblige real estate intermediaries such as Airbnb to withhold taxes of 21 percent on the rent and pay them to the tax authorities. The free movement of services does not preclude either the obligation to collect and transmit information or the obligation to withhold taxes. This is the opinion of Advocate General Maciej Szpunar of the European Court of Justice (ECJ) in his so-called Opinion.
The case has to be heard by ECJ because Airbnb Ireland UC and Airbnb Payments UK Ltd, which are part of the Airbnb group, had sued. The reason for this was the introduction of a law on June 1, 2017 in Italy. This had introduced a tax regime for non-commercial short-term rentals of real estate. The tax regime applies to contracts for the non-commercial rental of residential real estate by natural persons for a maximum period of 30 days. It does not matter whether the contracts are concluded directly with the tenants or indirectly via real estate agents or operators of internet portals such as Airbnb.
It has not yet been determined when the ECJ's ruling is expected. Interested parties can read the Advocate General's Opinion at curia.europa.eu or view it in English at audiovisual.ec.europa.eu/en/. So-called Opinions are legal proposals to which the ECJ is not bound, but which it generally follows. Opinions must be drafted by an Advocate General in a non-partisan and independent manner.
Source: curia.europa.eu
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