The Irish unit of online accommodation rental service, Airbnb has set aside $1.002 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 $118,750,000 (€112,318,218).
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 $909,000,000 (€859,979,410) from $4.199 billion to $5.1 billion (€4.8 billion) last year.
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 $621m (€576 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”.
Pre-tax profits did decrease by 24 per cent from $98.44 million to $75.05 million and this was due to the company recording a $50.44 million expense arising from a $48 million foreign exchange loss and another unspecified expenses of $2.4 million.
The company did record a post tax loss of $18.68 million and this followed the company incurring a corporation tax charge of $93.68 million which was a multiple of the $15.6 million corporation tax charge for 2022.
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.
The bulk of the Irish corporation tax charge related to expenses not deductible for tax purposes of $36.36 million.
The Irish-based firm’s cost of sales declined by 10 per cent from $3.26 billion to $2.9 billion as administration expenses more than doubled from $843.7 million to $2 billion.
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 shared-based payments of $12.92m add to a combined $54.22 million and average pay for the 391 workers works out at $138,693.
Pay to directors last year increased from $1.44 million to $1.67 million largely made up of $667,000 in emoluments and $985,000 in benefits under long term incentives scheme.
In March 2023, the company sublet a portion of its Dublin office space and this followed the firm reviewing its real estate lease arrangements.
The review came after the company adopted in 2022 a Live and Work Anywhere policy which permits the majority of employees to work remotely.
The profit last year takes account of non-cash depreciation costs of $2.14 million.
At the end of December last, AirBnb Ireland UC had shareholder funds of $51.27 million. The company’s cash funds fell sharply from $251.39 million to $42.03 million.
Airbnb was established in 2007 when two ‘hosts' welcomed three guests to their San Francisco home, and has since grown to over 5n hosts who have welcomed over 2bn guest arrivals in almost every country across the globe.
