Booking.com, an online travel company based in the Netherlands, has reached a significant financial settlement with Italian tax authorities by paying 94 million euros. This settlement, which results from an 'adesione' procedure with the Agenzia delle Entrate, ends a dispute over non-declaration of VAT from 2013 to 2021. As a result, the company avoids a seizure. The tax irregularities came to light through an investigation by the Guardia di Finanza of Chiavari, led by the Public Prosecutor's Office in Genoa.
The issue concerned the application of the reverse-charging mechanism, where Booking.com did not collect VAT from Italian customers, a method that Italian authorities said was used incorrectly by providers without a VAT number. The company failed to issue VAT invoices and file VAT returns for a large number of providers without a VAT number. These practices were revealed by Italian prosecutors and were confirmed by Dutch justice documents obtained through Eurojust.
In response to this situation, Booking.com has filed its 2022 tax return, in accordance with Italian tax law, and declared a tax of more than 19 million euros. The company has also adjusted its organizational model: if a customer-provider does not provide any or an invalid VAT number for the EU, Booking.com will charge 22% VAT and take care of the declaration and payment of this tax in Italy.
Booking.com underlines in a statement their commitment to compliance with laws in all countries where they operate, including tax obligations. The company confirms that it has entered into an agreement with the Italian tax authorities over the disputed period and looks forward to continuing high-quality services in Italy.