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Airbnb: when European justice decides in favor of the Belgian tax authorities

Posted Apr 27, 2022, 6:42 PMUpdated on Apr 27, 2022 at 8:26 PM

European justice is once again providing its assistance in regulating the activity of electronic platforms for the rental of tourist accommodation, Airbnb and others. In a judgment delivered on Wednesday, the Court of Justice of the European Union has indeed ratified the obligation which could be made to them by the tax administrations of the Member States to communicate information on the transactions carried out.

Seized of a dispute between the company Airbnb Ireland, the leading entity of the American giant in Europe, and Belgium – in this case the tax administration of the Brussels region -, the Court considered that the Irish company had to communicate to the regional tax office data on rentals made via its platform.

Questioning

This dispute dates back to 2017, due to the implementation, at the end of 2016, by the Brussels region of a flat-rate tourist tax per overnight stay for all tourist accommodation, including home accommodation…

While Airbnb argues that the transmission of information is contrary to EU law, and in particular the principle of freedom to provide services, the European Court, questioned by the Belgian Constitutional Court, considered that tax rules are excluded from the scope application of the 2000 European directive relating to information society services and in particular electronic commerce, to which Airbnb and other similar platforms fall.

Consequently, its judgment refers the case to the Belgian Constitutional Court which will now have to rule.

A priori, it should not, on the other hand, have an impact in France, where the supervision of the activity of the platforms has tightened in recent years, due to the strong mobilization of hoteliers, concerned about competition more balanced, and of local authorities – in particular Paris -. Airbnb, which has made a spectacular breakthrough in France since 2008-2009 – its French branch having been launched in 2012 -, also recalls communicating data on the activity of its users in the context of the collection and transfer tourist tax (93 million in 2021). Likewise, the platform automatically transmits data on the income of the hosts during the previous year to the Ministry of Finance each year.

Simplification

“Holiday rental intermediaries are subject to numerous data sharing obligations arising from several finance laws, but also more specific and sectoral laws – the Elan and Lecornu laws -“, ​​specifies, for its part, a generally speaking, the National Union for the Promotion of Vacation Rentals (UNPLV), which brings together the main players in vacation rentals (platforms, travel agents, professionals and labels). The UNPLV supports more than ever a simplification, currently being tested, of procedures. According to a barometer set up by the professional union and the National Association of Elected Tourist Territories, concerning furnished tourist accommodation, “nearly 65% ​​of elected officials are not satisfied with the tourist tax regime in France” , she recalls.

At Community level, the judgment of the Court, based in Luxembourg, comes as the European Union is on the eve of an alignment of the practices of the Member States. As part of the seventh revision of the Administrative Cooperation Directive (DAC 7), which will come into force in 2023, the rules for sharing data between platforms and tax authorities will be harmonised. This harmonization, which Airbnb welcomes “positively”, relates in particular to the identity of the host – and not the customer-traveler who rents -, his address, the fees, commissions or taxes withheld or invoiced by the platform, or the number of rental days.

In addition, the regulations of the Brussels region are likely to evolve, Airbnb advocating for administrative simplification in order to encourage a legal rental offer…

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