Latest / STR Unpacked / 8.6 Million Euros, One Tax Nobody Collected
Transcript
- Ben: Morning, welcome to your bulletin on the eleventh of August. So eight point six million euros built out of 750 euro minimum. On the 31st of July, France's Constitutional Council looked in that and said the arithmetic, as said, holds. So here's the case. Essentially, a local council of ⁓ the Ile d'Iran took Airbnb to court over the tourist tax. In April last year, the Boilote's appeal court said that the penalty at 1,500 euros for every night in 2021 and 1,000 euros for every night in 2022 and 7,410 nights. So that's 8.6 million euros. Airbnb went to a constitutional council and it did not go alone. Booking.com and Lebanon Coin and the French Holiday rental trade body all joined in. And their argument, a 750 euro floor per breach is out of proportion to the tax accidentally missed. The judge cannot go below it, and nothing caps the total when the breach is stacked. Airbnb says the fine is more than 25 times the tax that went uncollected. Now, the council rejected every limb. In its words, the fine is not manifestly disproportionate. Even where breaches stack up, given how difficult it is for local authorities to recover this tax, and no constitutional rule requires a cap on stacked tax fines. Now, read the article itself, because this is where the coverage stops short. The article does not say platforms, it says lodgers, hoteliers, owners, intermediaries, and professionals. If you take a direct booking in France, you are the collector. And look at how the money moves. The commune applies for the fine, the president of a local court grants it, and the proceeds are paid to that commune. They bring the case and they keep the proceeds. So one caveat worth stating plainly. This is not over. The council only ruled that penalty regime is constitutional. The Court de Cassillon still has to decide whether 8.6 million is proportionate on these facts. And that is expected during 2027. So the wider context of this is on the same day the UK government confirmed every strategic authority in England will be able to introduce an overnight visitor levy by March 2028. France has just shown what enforcement end of that levy actually looks like. So in short, it's a tax that you collect on someone else's behalf, but it is still your liability. Thank you for watching, and I'll see you tomorrow.