Business

Airbnb’s Irish unit sets aside $1bn for tax investigations

Holiday rental business set up Irish operation in 2013

Airbnb's Irish unit set aside more than $1bn for tax investigations.
Airbnb's Irish unit set aside more than $1bn for tax investigations.
Gordon Deegan
Mon Nov 18 2024 - 16:50

The Irish unit of Airbnb has set aside more than $1 billion (€950 million) to deal with tax investigations across the countries the company and its subsidiaries operate in.

This is revealed in new accounts filed by the Dublin based Airbnb Ireland UC which show that operating profits last year increased by 24 per cent to $118.75 million.

The unit generates substantially all of its revenues from facilitating guest stays at accommodations offered by hosts on Airbnb’s online marketplace for users outside of the United States.

The accounts for Airbnb Ireland UC show that operating profits increased after revenues surged by $909 million from $4.199 billion to $5.1 billion last year.

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The $5.1 billion revenues generated by the Dublin based unit represent 51 per cent of the firm’s global revenues of $9.9 billion in 2023.

The Irish unit owns Airbnb’s Italian subsidiary and last December, Airbnb Ireland UC made a $621 million tax settlement concerning a 2017/2021 audit by the Italian tax authorities over the firm’s obligations to withhold and remit host income tax, including tax, interest and penalties.

A note attached to the accounts states that the 2022 and 2023 tax audit periods by the Italian Revenue Agency remain open and the note states that the company commenced settlement discussions with the agency in the second quarter of this year

The accounts show that the Irish unit made a $1 billion withholding tax provision last year and after the December $621 million settlement, there remained $380.85 million in place at year end to deal with the Italian tax liability from 2023 and 2022 and other liabilities that may arise.

The directors state that in 2023, revenue grew by 22 per cent and “the growth in revenues demonstrated the continued strong travel demand”.

Pretax profits did decrease by 24 per cent from $98.44 million to $75.05 million and this was due to the unit recording a $50.44 million expense arising from a $48m foreign exchange loss and another unspecified expenses of $2.4 million.

The company did record a loss after tax of $18.68 million and this followed the company incurring a corporation tax charge of $93.68 million.

The 2023 corporation tax charge was made up of an Irish corporation tax charge of $46.09 million and foreign corporation tax charge of $47.4 million.

Airbnb set up its European HQ in Dublin in 2013 and numbers employed by the Irish based firm increased from 380 to 391 as staff costs rose from $56.48 million to $59.89 million.

The wage and salary bill of $41.3 million and share-based payments of $12.92 million add to a combined $54.22 million and average pay for the 391 workers works out at $138,693.

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Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times

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