Rules of the Court of Justice of the EU Short-term rentals must provide data

The Court of Justice of the European Union today delivered an interesting judgment on short-term rentals. The case concerns the Belgian law which obliges intermediaries, including booking portals, to communicate data on accommodation, contact, number of nights and accommodation managed in the previous year to the financial administration in order to identify subjects, relating to debtors of a tax on tourist accommodation establishments and their taxable income.

In the opinion of the court, the Belgian rule falls within the tax field and must therefore be considered as excluded from the scope of the e-commerce directive, as Airbnb rather requests. The portals will therefore be required to communicate the data requested by the administration.

The court will soon resume hearing the case.

The first instance hearing on the request for a preliminary ruling proposed by the Italian Council of State in the context of the trial on Legislative Decree no. 50 of 2017, under which the portals must operate a withholding tax of 21% on the amount of royalties collected on behalf of non-commercial short leases and must transmit the data relating to the short lease contracts concluded through the portals to the Tax Administration Agency themselves.

According to estimates by the Federalberghi Study Center, which constantly monitors the online market with the collaboration of three independent entities (the Italian Incipit Consulting SRL, EasyConsulting Srl and the American Inside Airbnb), during the five years of non-application of the rule, Airbnb failed to pay taxes of more than 750 million euros.

In a press release published today on the website of the Court of Justice of the European Union, Belgian regional legislation requiring providers of real estate intermediation services and, in particular, operators of an electronic accommodation platform to transmit to tax certain elements of tourist accommodation transactions is not contrary to EU law.

Elna M. Lemons