Italian prosecutors are investigating two former finance chiefs of Booking.com in relation to allegations of unpaid taxes by the travel website company and have asked Dutch authorities to question them, two sources with knowledge of the matter told Reuters.
Italy’s tax police in June last year alleged that Booking.com had evaded 153 million euros ($175 million) of value added tax (VAT) in connection with holiday rentals booked through its platform from 2013 to 2019.
Booking.com, based in the Netherlands, works as an intermediary between property owners and guests. Private accommodation sites which are not professionally run often have no VAT number. But the Italian tax authorities believe the online travel agency should then collect tax in such cases.
A Booking.com spokesperson said the company was cooperating with the Italian inquiry.
“We are continuing to actively and transparently collaborate with the Italian tax authorities as part of our commitment to ensuring compliance with all local laws, and look forward to continuing the dialogue,” the spokesperson said.
The company has said that hotel and bed-and-breakfast owners using its platform were themselves responsible for collecting and paying the VAT they owed in Italy and other European Union countries.
The Italian tax police have said they believe that failure to levy the tax allows Booking.com, owned by Delaware-based Booking Holdings Inc, to undercut other hotel groups in one of the world’s most popular tourist markets.
Italy’s tax office has backed the findings of the tax police’s initial audit into Booking.com and has started a process which allows the company to pay the outstanding sum or to contest any allegations of wrongdoing, the sources said.
Prosecutors in the Italian port city of Genoa last month sent their colleagues in Rotterdam a European Investigation Order (OIE) asking them to obtain data on, among other things, the company’s turnover with private parties, the sources said.
Italian magistrates also asked their Dutch colleagues to question Olivier Bisserier, chief financial officer at Booking.com from 2013 to 2019, and Marcela Martin, CFO from 2019 to 2020, both under investigation in relation to the tax allegations against Booking.com, the sources said.
The two former Booking.com executives did not respond to Reuters’ emails requesting comment.
In the OIE document, the Italian magistrates noted that questioning the two former CFOs could provide clarity and possibly allow prosecutors to ask for the investigation into the two executives to be dropped.
A first European Investigation Order sent by the Italians in August 2018 in relation to Booking.com was rejected by Rotterdam prosecutors in May 2019, while a second request with supplementary information from August 2019 has not been answered, the sources said.
The Rotterdam prosecutor’s office declined to comment.
Booking.com accounts for 68.4% of hotel sales made by the online travel agencies in Italy, a 2021 study of European hotel association HOTREC showed.