Opinion Statement ECJ-TF 2/2023 on Case C-83/21, Airbnb Ireland and Airbnb Payments UK on accessory tax obligations imposed on digital service providers

The CFE ECJ Task Force has issued an Opinion Statement on the ECJ decision of 22 December 2022 in case C-83/21, Airbnb Ireland and Airbnb Payments UK decided following the Opinion of AG Szpunar delivered on 7 July 2022. Inter alia, at issue was the compatibility with the freedom to provide services of the tax obligations imposed by the Italian government on service providers offering their intermediation services regarding real estate located in Italy. The Court found admissible to impose the obligation to collect and report data and to withhold tax on the intermediated payments. However, it held disproportionate to request them the appointment of a tax representative resident in Italy.

This case covered other issues such as: i) whether the tax obligations imposed by the Italian government on service providers would fall within the scope of three directives regulating the provisions of services within the EU, which would require communicating it to the Commission prior to its enactment, and; ii) whether the domestic referring court is bound to phrase the preliminary ruling questions following the wording proposed by the parties in the domestic procedures. Those questions will not be covered in this Opinion Statement, which focuses solely on compatibility with fundamental freedoms and, specifically, with the freedom to provide services.

The Court decision in Airbnb clarifies the limits of Member States’ action concerning the imposition of tax-related obligations to non-taxpayers and reaffirms the inadmissibility of imposing the appointment of tax representatives.

Although provided with a new opportunity, the Court did not further clarify the conditions by which a neutral criterion at face value would amount to factual discrimination (i.e. when it is not “inherently neutral” or can be more easily met by residents). This issue has already been addressed in our previous Opinion Statement on the Vodafone case.

Airbnb appears to prevent any discussions on the validity of DAC7 in what concerns the reporting obligations. Furthermore, Airbnb might facilitate the introduction of withholding tax regimes also with non-resident withholding agents.

Finally, Airbnb does not prevent Member States (and the respective regions and municipalities) from imposing reporting and withholding tax obligations on the platforms operating within their territories. In case they effectively decide to do so autonomously, online platforms may be faced with thousands of different tax (procedural) regimes, increasing their compliance costs exponentially and hindering their capacity to offer their services within the internal market effectively. For that reason, the EU Commission could consider a proposal to harmonise the respective regimes through a directive.

We invite you to read the Opinion Statement and remain available for any queries you may have. We invite you to read the statement and remain available for any queries you may have.

Download the Statement