Authorities Investigate Extensive Airbnb-Related Tax Fraud Skip to content
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Photo: Golli.

Authorities Investigate Extensive Airbnb-Related Tax Fraud

With data from Airbnb in hand, the Directorate of Tax Investigations suspects that many Icelandic residents were guilty of tax fraud between 2015 and 2018, Fréttablaðið reports. Some of the offences are considered wide-ranging and serious, with fines, and in some instances, jail sentences being considered.

Billions of unpaid taxes

At the end of 2018, the Director of Tax Investigations sent a letter to Airbnb Ireland requesting information concerning payments made to Icelandic residents. Airbnb complied with the request in August of 2020, at which point the tax authorities began their investigation. Other enquiries have, however, served to delay the Airbnb probe.

According to Theodóra Emilsdóttir, appointed Director of Tax Investigations, the ongoing probe is proceeding well, although it remains unclear how many cases will be officially investigated. In addition to a reconsideration of tax payments, the Directorate may also levy fines and, in some instances, seek jail time. The most serious cases would be sent to the district attorney and could wind up in court, which would likely conclude with fines or jail sentences,” Theodóra remarked.

Airbnb paid an estimated ISK 25.1 billion to Icelandic residents between the years 2015 and 2018, with unreported earnings likely amounting to tens of millions of króna.

Worth Ca. ISK 15 billion in 2017

In February of 2018, Statistics Iceland estimated that the total number of overnight stays in Iceland in 2017 had amounted to approximately 10,500,000, with the total number of overnight Airbnb stays amounting to approximately 1,700,00 (worth ca. ISK 14.7 billion, which was up from ISK 11.8 billion in 2016).

In 2019, Mbl.is reported that up to 70% of apartments in given streets had been registered on Airbnb, many of whom were being operated without the necessary permits.

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