- What is this Regulation all about?
Article 4, paragraph 5-bis, of Law Decree 50/2017, as amended by the 2024 Budget Law, requires platforms like Holidu to apply a 21% income tax withholding rate (“cedolare secca”) on non-professional Hosts’ (“host no professionista”) earnings for short-term stays up to 30 days.
- What exactly is Holidu doing to comply with the regulation?
- Who does this regulation apply to? / Which hosts are affected?
This regulation applies to “non-professional hosts” who own at least one property for short-term rent in Italy. Based on the law and guidance from the Italian Revenue Agency to date, non-professional Hosts include Hosts with less than five properties for rent, and Hosts that are not VAT registered, meaning they have no valid EU VAT ID. Please see below for a supporting logic tree:
- What does this mean to me as a non-professional host? What do I need to do?
As a first step, we ask you to confirm that you are indeed a non-professional host. For this purpose, please log into your Holidu account and answer the question: “Do you rent out 5 or more properties in Italy?”
As a second step, we encourage you to monitor the payments you receive from Holidu carefully, and to consult your tax advisor in case of questions.
- So what is a professional Host?
A professional host either has a valid EU VAT ID, or at least five properties for rent. All professional hosts are not affected by this law, meaning nothing changes for them, and most importantly, professional hosts continue to receive the full payments from Holidu.
- Which group of hosts is affected again?
Only non-professional hosts are affected by this Law. For professional hosts, nothing changes.
- I’m a non-professional Host who has not opted for the flat tax (“cedolare secca”) but for the ordinary regime. What should I do?
If you are a non-professional Host according to the described criteria, who has opted for the ordinary regime, Holidu is still required to apply a 21% withholding tax rate from your earnings, but the withholding will operate as an advance payment (meaning Hosts can offset it against their overall annual tax bill). We recommend consulting with your tax advisor in order to obtain further details on your tax obligations.
- Which stays are subject to tax withholding?
Income tax withholding applies to short-term stays that, according to Law Decree 50/2017, are defined as stays of up to 30 nights.
- Which payouts are subject to tax withholding?
First of all, only payouts related to properties located in Italy are subject to Italy tax withholding. Then, the tax withholding (“cedolare secca”) applies to the gross payout amount before any VAT or Holidu fees. Also cleaning fees, towel fees, and any other extra fees you charge are subject to tax withholding. The only exception not subject to withholding are tourist taxes included in the guest price.
- I am a non-professional Host, because I have no VAT ID, and only two properties for short-term rent. What will Holidu do now?
As a first step, Holidu asks you to confirm in your account that you are indeed a non-professional host. If you do not react within 2 weeks, we must automatically assume that you are a non-professional host. Then, Holidu will automatically start withholding 21% on your payouts, and remit them to the Agenzia delle Entrate on your behalf. In case you change your status to a professional host, you will always be able to notify us via email at host@holidu.com, for example when you have obtained a valid EU VAT ID.
- Can I change my status from non-professional Host to professional Host?
Yes, you may change your status with us at any time in the future if your circumstances change: This means you either need to obtain a valid EU VAT ID, or you need to confirm that you rent out 5 properties or more in Italy for short-term rent. If this is the case, please contact our host support via email at host@holidu.com.
- Will I need to provide taxpayer information to Holidu and, if so, for what purpose?
For non-professional Hosts, Holidu will need to collect required data from you for reporting purposes. This is necessary for Holidu to accurately report your tax withholding to Italian tax authorities and generate all legally required filings correctly. Holidu will reach out to affected Hosts for this later in 2024.
- What tax forms will you complete if I confirm that Holidu shall apply the “cedolare secca” because I am a “non-professional” host?
Holidu will complete the following forms:
- F-24: Holidu will remit the income taxes withheld on your behalf to the Agenzia delle Entrate on a monthly basis
- ”Certificazione unica” (CU): Holidu will report the taxes withheld on your behalf to the Agenzia delle Entrate at a listing level within 16th March of the year following the withholding tax event (ex: for the year 2024, the CU will need to be filed by 16 March 2025). Holidu will issue to you on an annual basis the “certificazione unica” with details about the tax withholdings on your earnings so you can account for them on your tax returns. All preparatory steps are being implemented at the moment.
- Modello 770: Holidu will report the income taxes withheld on your behalf to the Agenzia delle Entrate within 31 October of each year. All preparatory steps are being implemented at the moment.
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Will Holidu automatically re-classify me as professional Host and stop withholding if my number of properties in Italy is higher than four?
No, tax withholding may not automatically stop if you add more properties. To opt out of Italy withholding, please reach out to Holidu at host@holidu.com.
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Do you need any additional data or information?
Yes: According to the law, we also need to collect cadastral data for each property (“dati catastali dell’imobile locato”). We will get in touch with you for those data points at a later point in time; for the moment, no further information is required from you.
16. I am exempt from the "cedolare secca", what should I do?
If based on your legal and tax situation you are exempt from the "cedolare secca", please click here.
17. Who can I contact in case I have any more questions?
In this case, please get in touch with our Customer Happiness Team, or reach out to your tax advisor (as Holidu cannot give any tax advice).