Published On: Maggio 24, 2023Categories: Invest305 words1,5 min read

Italy can request withholding taxes on short-term rentals. This was stated by the EU Court which (partially) agreed with the Italian State deeming the law on short-term rentals introduced in 2017 to be legitimate.

The European Court of Justice has declared that the Italy can request information and data on the leases made from the platforms and above all can apply the withholding tax at its source. But the Court agreed with Airbnb considering that the obligation to designate a tax representative represents a disproportionate restriction on the freedom to provide services, prohibited by Article 56 of the Treaty on the Union.

Short-term rentals 2023

From 1 January 2023, platforms are required to communicate to the Revenue Agency the tax codes of the Landlords, the income received and the cadastral data of the properties rented out. In case of non-communication there is a risk for platforms, such as Airbnb, to be blocked.

According to the law on short-term leases, intermediaries who intervene in the payment or collect the fees relating to short-term lease contracts must make a withholding tax of 21% on those sums to be paid using the F24 Form with the tax code number 1919

What taxes are paid on short-term rentals?

Short term rentals tax are paid alternatively according with one of these criteria:

a) 21% Flat Tax of the total rental income which replaces the IRPEF and the municipal or regional taxes; Flat that applies only in cases of management of the property outside the business activity, with a limit of four apartments for each tax period.

or

b) IRPEF (regular income tax): in the event that the short-term rental conditions are not met, IRPEF taxation applies on 95% of the short-term rental income. The remaining 5% is exempt from income tax

Short-term lease contracts are not subject to registration with the Revenue Agency if their duration does not exceed 30 days.

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