Italy will expand its ongoing investigation into allegations of tax evasion by Booking.com. This concerns unpaid VAT on holiday homes booked through a Dutch company. That’s what the public prosecutor said to FD. Previously, Italian prosecutors had announced they would start an investigation into unpaid VAT between 2013 and 2019, now the last three years are also included.

According to Anouk Boonen, FD Italia correspondent, this concerns an amount of 154 million euros of VAT that will not be paid. ‘This concerns bookings with small landlords, who do not always have to have a VAT number in Italy. And it’s foggy there.’ The case arose because hotel owners started complaining to tax authorities about declining bookings and unfair competition from small landlords.

Read also | Spain’s competition watchdog opened an investigation into Booking.com

gray area

Booking itself claims to be only an intermediary between the hotel room or holiday home provider and the customer, and therefore is not responsible for paying taxes. The question is whether the prosecutor’s office will agree with this. “It’s a gray area,” says Boonen.

Read also | Booking.com reached a multi-million dollar settlement with French tax authorities

The European Commission recently announced new measures to combat VAT fraud in Europe. The EU will lose a total of over EUR 90 billion in VAT, partly as a result of this type of practice. According to this rule, platform companies such as Booking and Airbnb must collect VAT if the owner does not pay it himself. “By this European rule, the Italians are right,” says Boonen.

France

In a similar legal battle in France, Booking.com has reached a settlement with the French tax authorities. The tax authorities have filed four charges for a total of 540 million euros, in January both parties agreed that only 153 million euros should be paid.

Read also | The former CFO of Booking.com is being questioned for tax evasion

On that basis, Boonen believes the deal will also be done in Italy. “The total amount of 154 million will be higher because the last three years are now also included, but we have seen in France that the final fines are lower.”

Violation

In an interview with FD Public Prosecutor Francesco Pinto expressed his dissatisfaction with the Dutch company. According to the official, the company violated Italian regulations by not collecting VAT when landlords failed to do so. He considered this a ‘serious violation’ by Booking.com, which is headquartered in Amsterdam.

Pinto also confirmed rumors that a former Booking.com executive would be heard by the Italian. This concerns former finance directors, Olivier Bisserier and Marcela Martin. According to Pinto, the questioning will take place “hopefully this spring”, he told the newspaper.