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18th Mar 2019

Airbnb too 'different' to pay EU tax

  • Airbnb rented its first room nine years ago and turned its first profit last year (Photo: Alper Cugun)

US home rentals firm Airbnb has said it was “fundamentally different” in reaction to French calls for it to pay more tax in Europe.

The San Fransisco, US-based company, which provides an online platform for people to rent out rooms, paid less than €100,000 in tax in France last year despite having more than 10 million users in the country.

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  • Le Maire (top left) with Moscovici (r) and German finance minister Wolfgang Schaeuble (bottom left) (Photo: Council of the EU)

But Airbnb said in a statement on Thursday (11 August) that it was “fundamentally different to companies that take large sums of money out of the places they do business”.

It said that its “model is unique” because most of the money stays in the hands of local people who rent out their homes, rather than going into its own pockets.

It said it “boosted the French economy by €6.5 billion last year alone. It empowers regular people, boosts local communities, and is subject to local tax”.

It added that: “We follow the rules and pay all the tax we owe in the places we do business. Our France office provides marketing services and pays all applicable taxes, including VAT.”

The comments came after Bruno Le Maire, the French finance minister, said Airbnb’s low tax bill was “unacceptable”.

“It is Airbnb’s right to operate in France, but it is also our duty to demand from Airbnb and all digital platforms a fair contribution to the French public treasury,” he said.

Pierre Moscovici, the EU finance commissioner, said one day earlier that the Airbnb tax figure was “shocking”.

Le Maire, who spoke out in response to a parliamentary question by Benjamin Dirx, an MP from the ruling party, La Republique En Marche, said Paris and Berlin were working on a joint initiative to squeeze more tax out of “all online platforms, all the online giants”, including Google, Amazon, and Facebook, as well as Airbnb.

“These digital platforms make tens of millions of sales and the French treasury gets a few tens of thousands,” Le Maire said.

“Everyone has to pay a fair contribution”, he added.

“We want this [Franco-German idea] to be transformed into a [European] Commission proposal that should be studied at the level of heads of state at the European summit in December”, he said.

“We want the EU to take the lead in tackling this global issue. And France is ready to put forward some ambitious ideas to move the debate forward,” he said.

The European Commission said on Thursday that a Franco-German proposal would likely be discussed at an informal EU finance ministers’ meeting in Tallinn in September.

Its spokeswoman, Vanessa Mock, said: “We are of course involved in the preparation of those discussions and we will bring our own ideas to the table”.

EU playing field

She said the Commission wanted to create a “level playing field” for corporate taxation in Europe, but that the issue was “complicated” because tax policy was decided by member states by unanimity.

Airbnb had earlier come under fire at local level in the Spanish cities of Barcelona and San Sebastian, as well as on the Spanish islands of Majorca and Ibiza, for distorting housing markets.

The company rented its first room in 2008 and made its first profit in the second half of last year, according to the Bloomberg news agency.

It takes a commission of 6 percent to 12 percent from guest fees and a small fee from hosts.

It has more than 3 million properties on offer in over 190 countries. The privately-owned firm does not publish its financial results, but is said to be worth more than €25 billion.

Sweetheart tax deals between US tech giants and EU states such as Ireland and Luxembourg, which enabled them to pay next to no tax in Europe, have also drawn Commission complaints.

Luxembourg not a tax haven, claims PM

The prime minister of Luxembourg, Xavier Bettel, maintains that his country had broken no rules and committed no crime when issuing rulings that slashed global tax bills for the big firms.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

EU takes time to ponder tech giant tax

The EU commission published a paper that outlined several options on how to increase tax income from internet companies' activities, but fell short of proposing legislation.

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