France Is Gearing Up For an Airbnb Tax Crackdown

Aug 10, 2017

The French government is preparing to go after the likes of Airbnb for what it sees as an "unacceptable" level of tax payments.

Economy minister Bruno Le Maire told the French parliament on Wednesday that France and Germany would team up to tackle the problem, with a plan set to be revealed in mid-September. Apart from Airbnb, platforms such as Google and Amazon are also in the governments' sights.

"These digital platforms make tens of millions of sales and the French Treasury gets a few tens of thousands," Le Maire complained to parliamentarians.

According to a report earlier this week, Airbnb paid just €92,944 ($109,000) in French taxes during 2016, despite the fact that France is the room-booking firm's second-biggest market after the U.S.

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In line with many other U.S. web firms, Airbnb achieved this by basing its European operations in Ireland and running the commissions that it claims through that Irish subsidiary. Ireland has a 12.5 percent corporation tax rate, which is far lower than France's 33.3 percent rate.

While Airbnb collects and remits the tourism taxes levied by many French cities, its overall arrangements are clearly not to the liking of national authorities.

According to AFP, France and Germany want a new crackdown to be set out in an official European Commission proposal, to be examined by European leaders at the end of the year, although how Germany feels about that won't be clear until after federal elections in September.

Meanwhile, Paris last month launched its own crackdown on Airbnb, making it more difficult for people to rent out their apartments on a regular basis.

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