Italy to seize $835M from Airbnb in tax evasion inquiry
bbc.co.uk
bbc.co.uk
- You need to do this.
= Nah.
- There's actually a law, you have to do this, like everybody else.
= We think the law is unfair, so we're not going to do this.
[Court] The law is perfectly fine, go away.
= "We are surprised and disappointed ... "
Hey I wanted to rob a bank...and despite advice to the contrary, I went ahead and did it, and now I am "surprised and disappointed" by being sentenced to prison.
As long as nobody is held personally accountable these sorts of things will keep happening, we have to be tougher on the execs
Yes, but what if the exec's cousin's wife is playing golf with the chief of staff of the minister of the economy? Can't be tougher on this one, sorry.
Jumping from one recent event to claiming other such examples are countless is not making the strong case you seem to think it is.
And how far do you take that? We can’t produce a world without deviance so we should just let it slide?
What we should do, in my opinion, instead of crying out for tougher enforcement of laws, is to acknowledge that anti social behavior is a socialization issue, not a criminal issue. Punishment is self serving - I want to feel like those who exploit our good nature suffer for it. Cultivating higher morals is hard and won't change statistics overnight. But a world without corruption is a world without greed, not a world with harsh punishment for those caught stepping out of the line.
I grant that you do make a contribution, a tiny, tiny one - because without action, your ideas will never be bigger than the few tiny brain cells they occupy.
Saying "its' complex, I dont have any solutions" is a cop-out, do you think if everybody did that the corperate tax avoidance and greed would get better or worse? Or do you think if harsher punishments are introduced and enforced it might make the executives who are in the grey area of activity think twice?
Compare more legal countries like the US with corrupt countries where this isn't enforced (e.g. Pakistan) it's clear that enforcement and the threat of punishment vastly helps mitigate corruption, and while there are no absolute silver bullets, threats of punishment are good for keeping the "lawful evil" in line, because it forces them to factor punishment into the risk equation, which otherwise, is only about profit.
Woah calm down man. You're taking this personally and turning to insults? That's not acceptable. Suppressing discourse unless accompanied by a plan of action is just a sure fire way to get demagogy and harsh plans that just make things worse like the endless "harsh on crime" mess of putting people in jail for decades over joints.
Besides, Legal America has been committing war crimes and abetting corruption across the globe for decades so get out of here with this spectrum of bs of yours.
It was not an insult at all, I was being literal. Ideas without action do only occupy a few brain cells (and nothing else) and brain cells are tiny. It's a Arnold Glasow quote thats common in the startup ecosystem as a joke and critique about inaction.
You’re the one that incorrectly interpreted it as an insult (even if you dont know it's a quote, if you read it properly it's a comment on the ideas and not a comment on brain size or anything else), then you wrote a knee jerk response, complaining I insulted you when I didn’t, and then summarising a bunch of vague generalisations - and then finishing with an angry ending to a post you started with "Calm down man" actual lol.
If you cannot interpret simple responses correctly (or worse - interpret them as insults) it makes me question your critical faculties and invalidate your other conclusions on more complex topics.
We still need a better formula for rich people to benefit from hunting down other rich people. Airbnb is harmful to real estate value in the area but drives up prices elsewhere. It creates fluctuation in rich peoples wealth.
In this case, the tax is paid on the revenue that the landlord makes and Airbnb is supposed to withhold it and pay it to the state. Airbnb being profitable or not is irrelevant.
And Italy has rent on gross revenue of rental properties. Which the payment processing party that is Airbnb should collect and pay.
ABNB creates externalities to the countries where it operates (increase rent prices), so it would make sense to tax them because of it.
And if they don't like the tax, they are free to stop operating in that country ;)
National subsidiary rakes in money, but has to pay main office in Cayman Island even more in licensing fees for the brand. So national subsidiary is running in negative, and doesn't pay any taxes. Parent company received all the money in Tax haven.
They chose not to do it to make their platform more competitive with traditional hotels etc, they were able to pocket a significant proportion of it through fees etc. but most of the money went to landlords and clients.
If you don't they attach property and goods from you - this happens rather very quickly than the actual appeal process.
When is the EU sticking its head out of the sand?
[1] I have several time successfully managed to get better price by agreeing to cancel the airbnb reservation and pay directly in cash.
The problem is with tax evaders. Many use airbnb as a 'first contact' platform. If there are returning customers, they often take the money 'under the table'.
PS: I will ask my Italian friend for confirmation that good real estate is both productive and possibly reproductive.
Because apparently the law says so? Rent income is already taxed at a flat rate (at a relatively generous 21%) as opposed of using the marginal tax rate.
Also VAT and sale taxes are commonly withheld at payment. In UK it was the rule until a few years ago for banks to withhold tax on interest income.
Huh, is it not anymore? I thought virtually everywhere did that; I'd expect compliance to be _extremely_ low where it's not done.
Banks share information with HMRC, so I expect that compliance is still high, but it is a bit annoying that our tax returns are not prefilled with this info.
Even VAT is a withholding scheme at heart, which makes your restaurant example kind of funny :) The VAT on that meal you eat at a restaurant is paid by you as the consumer, but collected and paid to the tax authorities (i.e. withheld) by the restaurant.
Isnt AirBnB like the delivery driver in this situation? DoorDash, in America for example, collects the tax for the food, passes it to the restaurant, who pays their own tax.
Isn't AirBnB giving the collected tax money to the homeowner so they can pay correctly?
I have no clue how it works over the pond so apologies if these are dumb questions.
But this case is not about VAT, but a rental tax. If Airbnb collects the money then I don't see why they wouldn't just pay the tax. I mean I know why - they don't want to include it in the price and make their product artificially cheaper by ignoring regulation, but tough luck.
The delivery company pays VAT for the food and can substract that from their own VAT liabilities.
In a strict B2B context it's also possible to do a net payment and that's why some (EU) stores will ask if you have valid tax id.
In Italy it is a rather common occurrence in different fields to be required by Law to act as "sostituto d'imposta" (loosely translatable to "tax substitute", the real translation should be "witholding agent"), as an example banks when you pay through them certain types of services, or hotels when you pay the "city tax" for your stay, or firms hiring a consultant.
The taxes are witheld and then paid directly to the revenue service (periodically), the idea is that instead of receiving millions or billions of small payments, the state receives much less larger (cumulative) payments.
If we take as an example the city (tourist) tax, each customer should pay (say) 2 Euro for each night they stay in a hotel (or AirBnB), a (fully occupied) hotel with 200 beds would generate 200 small payments, 2 Euro each, per day, instead the hotel collects them (in name of the state) and pays in a single instance every three months, so instead of 3x200x30=18,000 micro payments, only one payment/transaction is generated.
They are facing a lot of tax evasion from landlords. On the other hand, all the money flows through AirBnb so making AirBnb withhold tax is the simplest and most effective option from the government's point of view.
What they're doing is knowingly stealing out of the pocket of the taxpayer, and it is deserving of the same attitude you'd have towards a street gang running a protection racket. Just because it's profitable for them to do, doesn't mean it's deserving of respect.
The difference is that their actions here seem within the law? The law allowed them to drag out the process for so long. I wouldn't blame them for doing so.
My argument is that the legislation/regulatory environment is to blame. There should be laws/regulation on the books to discourage/punish/recoup costs of behavior we consider unacceptable.
There absolutely should be reforms to the system to make this impossible, yes. In the meantime, we can discourage this by making them wear it. The decisions Airbnb made as an organization, have shown us all something about the company and the people in charge of it.
If we can't sanction them legally, we at least can sanction their reputation.
Waiting for a similar action on Uber too
> The results show that the propensity to evade taxes is greater among households whose heads have low levels of education and income, are elderly and are resident in the South. Over time, the propensity to evade taxes has been growing on average, especially in the North, which has reduced the gap compared with the South, and among young people under 30 years old. The paper also shows a link between the propensity for tax evasion and some indicators of actual evasion, such as the use of cash and the under-reporting behaviour in the Survey of Household Income and Wealth (SHIW) conducted by the Bank of Italy, confirming the association between cultural elements and evasion behaviour.
The super-rich excluded of course.
The rest do have roads, they collect enough tax to support the infrastructure, some even manage to build new infrastructure. Usually when the authorities build infrastructure, the politicians also steal part of the taxpayer funds to enrich themselves. That's one reason why tax evasion is a cultural thing. The others are welfare and pension (unrelated to contributivity) freeloaders. So it's mainly as a form of protest.
I mean I can get a supercomputer in my pocket that allows me to access the sum of our civilization knowledge anywhere I am and to communicate with anyone of earth for a few hundred bucks and a monthly fee less than a meal, but roads?! Nooo, those are the real value at the center of our society.
Well... Yeah? Roads are really fucking useful, like many more times than all the knowledge you can have in your pocket. Without roads you don't have that thing in your pocket, because it's not even getting to you, at least not in a convenient timeframe (and not for cheap).
Roads, sewers, water pipes, electricity cables, without those there would be absolutely no way for your supercomputer to be made, even less for that cheap.
Don't dunk on roads, there's a reason why the Romans are still praised for them.
But why are governments charging us for it even more than the Romans did when countless other, much much more amazing things (and just as useful) came down in price dramatically during the last 2000 years?
I have a hunch: in my town all road repairs are made by companies owned by friends and relatives of the politicians in power…
majority of such value is appropriated by the governments
Here. Fixed that for you.
Also the great majority of value created by a company is captured by the society in improved productivity, products and services. Only a small part is retained by the capital owners.
Finally, these days anybody can easily become an evil capitalist with just a few bucks and a smartphone app, and anybody with a pension plan already is.
I don't think that assumption at all holds true for the majority of businesses. Even an extremely profitable tech company like Google "only" has a gross margin of around 28%.
It's also for a very narrow portion of the global economy, where workers are paid particularly well.
I mean... sure.
They still pay taxes on their income.
> value extracted indirectly via the stock market, etc.
Like how?
> It's also for a very narrow portion of the global economy, where workers are paid particularly well.
You misunderstood me, I cited Google as an example of a company which is relatively close what you're saying (high margins, a relatively high proportion of value goes direct to share-holders). Most companies which have high numbers of workers are less profitable that it.
Anyway this is pointless. Do you have any data?
A very oversimplified example (which I think should be somewhat approximately accurate):
- Your revenue is $100 + $21 (VAT)
- $40 goes to suppliers and other expenses
- $40 goes to labour (let's say they pay ~$18 in taxes)
- $20 is gross profit (you pay ~$5 in corporate tax on that, 25%)
on top of that there is VAT which is another ~4$.
So you end up with a profit of $15 and 'pay'(or rather 'generate') $27 in taxes (and you still need to pay personal income tax when you want to cash out).
And I think an 20% operating margin is pretty good for most businesses.
It also assumes that profits are actually correctly accounting for the value appropriated by the owners of capital, which often hides various other ways in which they extract value from labour.
I never implied it all goes to welfare. Yet other things, like healthcare, education, infrastructure and loads of other things do provide some utility.
> of that that $18 + $4
Assuming you agree my example is somewhat accurate it's actually $18 + $4 + $5 = $27
Capital gains etc. will also be paid on the $14 further decreasing it.
Now let's look at actual data instead of saying silly things about oppression, social spending:
OECD average: 21.1% of GDP France: 31.6% Italy: 30.1% Germany: 26.7% US: 22.7%
Total Government spending:
France: 59% of GDP Italy: 54.1% Germany: 51% US: 44.9%
So if more than half = tiny according to you, then yes you're correct. Of course since this data doesn't support your views who cares...
You were corrected (with numbers) to the actual culprit capturing the majority of value generated by labor&capital: governments.
Ultimately the difference doesn’t matter much, governments are capital too in countries where the ruling class is capitalists. What they are forced to spend to reproduce the working class is still for their own profits. Governments aren’t some thing separate from class society.
There’s less value produced in countries that started our poorer and such countries tend to have successful proletarian revolutions. It shouldn’t be surprising that they can’t instantly be as developed as the countries that exploited them.
All that changed dramatically with the switch to capitalist, market driven economy in the 90s leading to the amazing wealth and prosperity we are currently enjoying.
Meanwhile I am still waiting to hear about any communist success story…
But at least the remaining socialist countries are slowly winning. At this point it’s socialism or extinction.
All you need to understand how false that is is to remember that the machine guns on the border during communism were pointing inwards, so people couldn’t leave.
> constantly worsening material conditions
Every single actual, measurable life quality metric in the EE has improved singnificantly over the last 30 years.
> the remaining socialist countries are slowly winning
Please feel free to point out those “winner” countries.
It’s pointless talking when you’re so ideologically blinded. Probably because you profit from the exploitation of others, so it’s in your material interest.
Right. What about the people who had to wait for 10-15 years to be "assigned" an apartment?
> People younger than me can barely afford rent by pooling
Well... If you were fine living in communal flats with shared kitchens and bathrooms you'd be fine. Just like in the good old days.
> It’s pointless talking when you’re so ideologically blinded.
You were marginally entertaining but I think it's time to go back to reddit. Tanks go brr, amirite comrade?
Well you're allowed to leave your country for one thing. How many more would have left the USSR et al. if they hadn't had to risk being murdered by border guards?
> Almost everyone older tells us how much worse off we are than they were during socialism
Which country is that?
> But at least the remaining socialist countries are slowly winning.
I'll bite... name a single "socialist" country that's winning.
So you're one of those people who claim that USSR wasn't a socialist let alone a communist country?
Ask around, no one who fled the USSR will tell you the actual people at ground level were in control.
Even within the US you can find people that weren't caught up with the McCathy era mislabelling and understood the abuse of terminology:
https://www.umass.edu/pubaffs/chronicle/archives/02/10-11/ec...
Sure, many in the USofA called the USSR state "communist" but that didn't make it an example of what intended when the word came about.
We can at least agree, I trust, that regardless of the naming of the state authoritarianism within the USSR that it sucked as a system to live under.
> held (textbook) communism
Not if bolshevism was textbook communism. They did reject some core ideas promulgated by Marx (already back in ~1918).
> outside of the USofA,
I don't think US is particularly special in that regard compared to most western countries.
The most actually socialist systems in the world are democratic states with mixed economies starting with the wave of reforms within advanced democratic capitalist economies in the early to mid-20th century that created them; that we tend to call them “capitalism” and the less socialist state capitalist regimes under Leninism and its descendants “socialism” or “communism” is largely a result of 20th century geopolitical block identities and not actual analysis of politico-economic systems against some set of clear consistent standards of what constituties “socialism”, etc.
Well by any reasonable metric they are still significantly more 'capitalist' than 'socialist'. Or rather are these days, due to some reasons there even those 'democratic pseudo-socialists' states from the 60s shifted to 'capitalism' much more since the 60s.
is if there is ANY welfare state in italy...
The ease of "forming a company" is a good marker. In the UK you can do it extremely cheaply with no minimum capital and very limited ID requirements over the web API.
Italy has much harder requirements: https://uk.practicallaw.thomsonreuters.com/w-006-9469?transi... ; only recently (2012) did they allow companies with less than E10k of formation capital!
Europe varies wildly on the trust metrics. This is a map from 2015.
https://greekreporter.com/2015/11/02/greece-ranks-low-on-map...
Then some rules are unfair: for example in my business the more hours I bill the more money the business makes. I can bill more hours if I hire a cook, painter or child carer. Only I'm not allowed to. I can understand why - this could be abused - but also allowing it might actually boost the economy. Those helpers would be earning money which would also be taxed. A lot of people have their parents around who do that unpaid which is the reason it isn't allowed.
This is clearly selective prosecution against the benevolent venture capitalists who never wanted to do anything but globalize the economy and enable commoditization of humanity. :(