Airbnb Italy Tax: A Comprehensive Overview

Navigating the complex world of Airbnb taxes in Italy can be overwhelming, especially for those new to hosting. In Italy, hosts are required to pay a 21% VAT (Value-Added Tax) on all bookings, which is included in the guest's final payment.

This tax is a standard fee for all short-term rentals in Italy, including Airbnb, and is typically charged on a per-night basis. You can expect to pay around €2-€5 per night, depending on the type of property and its location.

To file your taxes, you'll need to register with the Italian Revenue Agency (Agenzia delle Entrate) and obtain a unique tax code, known as a Partita IVA. This will allow you to report your income and pay taxes on your Airbnb earnings.

Related reading: How Much Taxes Does Amazon Pay

Tax implications in Italy are complex and vary based on income and property type. Income tax rates are progressive, with additional regional and municipal surcharges applying.

Hosts must report their income and pay taxes in installments, with specific criteria determining the number of installments. Tax returns can be filed online or with a tax advisor's help.

Ignoring tax obligations can result in hefty fines or even legal action, jeopardizing the future of the host's property as a rental. Fines and legal repercussions are a serious concern in Rome.

The governing body of Roma Capitale has instituted a tourist accommodation tax that guests are required to pay when staying in hotels, holiday homes, rental room establishments, bed & breakfasts, and camping sites in Rome. The tourist accommodation tax rate is set at 3.5 Euros per night for bed & breakfasts, rented rooms, holiday homes, and holiday apartments in Rome.

A fresh viewpoint: When Do You Pay Taxes on Dividends

Italian tax residency determines how one is taxed, with residents paying taxes on worldwide income and non-residents paying only on income sourced in Italy.

In Italy, tax on short-term rentals applies to properties rented for up to 30 days, where the guest is not a business operator. A significant aspect is that individuals should not rent out more than four apartments in a fiscal year.

For your interest: Paying Taxes

The tax year in Italy is from January 1 to December 31, and the tax return can be filed online, directly or with a tax advisor's help, or using paper forms. Deadlines vary based on the mode of submission and the specific forms used.

Taxes are paid in installments, with specific criteria determining the number of installments. Italy has a progressive tax system, with rates varying based on income.

Additional regional and municipal surcharges may apply. Under certain conditions, individuals can opt for a flat-rate tax regime, termed “cedolare secca,” which has its set rates and requisites.

There’s a property tax called IMU, with the taxable amount based on the cadastral value of the property and other parameters. If you rent out a room, you might have to apply VAT to the charge.

Those renting more than four apartments per year from 2021 onwards are assumed to be doing so as a business activity, hence potentially subject to VAT. There are exemptions and specific rates depending on the services offered with the rental.

If applicable, hosts need to collect VAT from guests, report it, and remit it periodically using specified platforms and forms. The frequency and exact deadlines depend on the taxpayer category.

Always stay updated with the latest regulations, and when in doubt, consult a tax advisor or official local sources.

On a similar theme: Income Tax Deadlines

Airbnb has agreed to pay €576m to Italian authorities as part of a settlement over tax evasion allegations.

This is a significant fine, and it highlights the importance of tax compliance for short-term rental platforms.

In Italy, Airbnb has been accused of not collecting and remitting value-added tax (VAT) on behalf of its hosts, resulting in a loss of revenue for the government.

This is not an isolated incident, as other countries have also taken action against Airbnb for similar tax evasion issues.

As of February 2024, Airbnb will now collect and remit tourist taxes on the host’s behalf in Italy. This change requires some planning and communication, especially for hosts operating short-term rentals in different countries.

Hosts should consider including the tax as a separate line item in their pricing to ensure everything is clear for guests. This way, guests know the additional charge upfront and avoid surprises upon arrival.

Communication is key - clearly outline the tourist tax in your property’s listing and welcome messages. Providing this information in advance builds trust with guests and ensures they are prepared for the extra cost.

Include clear information about the tourist tax in your property listings to avoid misunderstandings with guests.

Keeping accurate records is crucial for the Italian tax authorities. Utilizing software or accounting tools specifically designed for short-term rental hosts can streamline this process and reduce the risk of errors.

You can maintain detailed records of the tax amount collected from guests and remit tourist taxes to the appropriate local authority on time.

Leverage technology to automate tax calculations and track payments easily with property management software.

If you're hosting on Airbnb in Italy, you need to charge VAT on the price of your Experience. This is because Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods and services.

You may need to assess the VAT consequences of your Experience if your country of residence is Italy, or if you're not resident in Italy but offer your Experience in Italy.

To determine if you need to charge VAT, check if your Experience falls under the tax authority's definition of goods and services bought and sold for use or consumption.

If you're required to charge VAT, you may also be allowed to deduct input VAT incurred. It's best to consult a tax advisor in your area for more insight.

VAT rates differ per country and change periodically, so be sure to check with your local tax authority for the most up-to-date rates.

The general VAT rate applicable in Italy is currently 22%, but different rates or even an exemption may be applicable depending on the service provided.

Staying informed and organized is key to managing the Airbnb Italy tax for your short-term rentals.

It's essential to follow the tips outlined in our previous sections to ensure a smooth and compliant process. By doing so, you can guarantee a hassle-free experience for both hosts and guests.

Keeping up-to-date with any changes in local regulations is crucial to avoid potential issues or penalties. This means regularly checking for updates on the tourist tax requirements.

With proper planning and communication, collecting the tourist tax can be a straightforward process.