Understanding short-term rental withholding tax for partners in Italy

Updated 2 months ago | 3 min read time

We're required by Italian short-term rental tax rules to collect income tax from partners who rent out residential properties in Italy and meet a number of other conditions.

What’s in this article:

This article includes the conditions that determine which partners these tax rules apply to. If these conditions change as a result of amendments to Italian law or clarifications from the Italian tax authorities, we'll let you know.

What you need to know

As required by Italian short-term rental tax rules, we're responsible for collecting 21% income tax from partners in Italy who these rules apply to. We calculate the 21% income tax based on the total transaction value of reservations where we facilitate payment via Payments by Booking.com, for stays of 30 days or less (excluding other taxes such as VAT and city tax). We pay this tax to the Italian tax authorities on our partners’ behalf on a monthly basis. In early 2024, we’ll share more details about how we plan to collect this tax from partners.

If these rules apply to you as a partner, we’ll also send you an annual certificate showing the total amount of income tax we’ve collected from you and paid on your behalf. We’ll do this within three months of the end of the calendar year. You may be able to use this certificate to reclaim this amount when you file your personal income tax return. Please keep in mind that you remain responsible for your own personal income tax obligations.

Which partners these rules apply to

These rules apply to you if you’ve opted into Payments by Booking.com and meet all of these conditions:

  • You rent out between one and four residential properties (with at least one registered as a residential property in the Italian land registry).
  • You don't offer additional services, such as meals (including breakfast), room service, front desk service, daily room cleaning, laundry, ironing, car rental, tourist guide service, tour arrangements, translation service, bike rental or airport shuttle service, etc.
  • You haven’t provided us with your VAT number, or you don’t have one.

If you have a VAT number and you’ve provided us with this in the extranet, you’re not affected by these tax rules and we won’t collect income tax from you.

What you need to do

It’s important that the information we have about you and your property is up to date, so that we know whether we’re required by Italian law to collect this tax from you. Please make sure that you log in to the extranet and:

  1. Add or update your VAT number if you have one – see section 4 of this article to find out how.
  2. Update your facilities information to include any additional services you offer – take a look at this article to find out how.
  3. Update the list of properties you own, if you rent out more than four – take a look at this article to find out how to update this.

How to add or update your VAT number

If you have a VAT number, please provide us with it in the extranet. If you’ve previously provided us with your VAT number, please check that it’s still up to date. Here’s how:

  1. Log in to the extranet
  2. Click on Finance
  3. Click on VAT Details, or click on Finance settings, VAT details and then Edit details
  4. Enter or change your VAT number

If you can’t update your VAT number yourself in the extranet, please send us a message so we can do this for you.

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