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 ruled on Thursday that EU member state tax authorities have the right to request rental information from short-term rentals providers.
Additionally, under the EU ruling, Airbnb-style platforms may also be required to withhold tax under national tax regimes.
Earlier this year, the European Commission presented a set of proposed rules aimed at regulating short-term tourist rentals (STR) and helping authorities ensure balanced tourism development in efforts to ensure fair play and boost competition.
Among others, the recommendations required online platforms like Airbnb and Booking.com to automatically share data once a month with public authorities about the number of rented nights and of guests.
This week’s decision comes after Airbnb challenged an Italian law which required short-term rental sites to share information from their rental contracts with tax authorities and withhold 21 percent from rental revenue which they would then pay to tax authorities.
“EU law does not preclude the requirement 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 Authority for Public Revenue (AADE) for taxation purposes. At the same time, it had announced the launch of a new “City Portal” allowing local governments to closely monitor listings.
In November, Greece’s AADE said it would scale up inspections of short-term holiday rentals to tackle tax evasion. The thorny issue of short-term rentals has stirred reactions in Greece as lawmakers prepare to table a new regulatory framework in efforts to reign short-term rental activity which generates 3.3 billion euros annually.