Booking.com reportedly accused of evading €153 million in Italian taxes
Dutch travel giant Booking.com is suspected of not paying sales tax on about 700 million euros in money earned through reservations made on the website. That amounts to roughly 153 million euros that was not handed over to Italian authorities from 2013 through 2019, according to the Guardia di Finanza, a law enforcement agency that investigates financial crimes in Italy.
The agency did not directly name Booking.com, but would only say that a "multinational online travel agency based in the Netherlands" was involved. Sources close to the investigation confirmed Booking.com's involvement to major Italian media outlets like La Repubblicca, Corriere Della Sera, and newswire AGI, as well as Reuters.
The investigators said that an examination of the tax records of bed & breakfast accommodations in touristic areas of Genoa showed "that the Dutch company used to issue invoices without VAT." These invoices would state that the European Union's reverse-charge mechanism applied, meaning that the accommodations were responsible for paying sales tax to Italy.
However, many of these facilities did not have a sales tax number, Italian authorities said. This led to "the consequence that the tax was neither declared nor paid in Italy." Sales tax was also not paid by in the Netherlands. Thus, they accuse the Dutch firm of failure to declare the tax due.
It is the second multimillion euro controversy between Booking.com and a national government two come to light in recent weeks. Booking.com announced last week that it will repay 65 million euros it received in Dutch State aid to help survive the initial economic crash caused by the coronavirus pandemic. The company claimed the money in 2020 under the NOW support scheme to encourage the retention of workers even though it turned a profit of over four billion euros in 2019.
It later emerged that the Amsterdam-based firm's American holding company paid out the equivalent of 28 million euros in cash and stock bonuses to its top three executives. Though it did not violate terms of the first stage of the NOW scheme in giving the bonuses, the firm was widely criticized for doing so. Dutch parliamentarians called for an investigation and possible future ban from participation in innovation funding programs and low-interest financing schemes.