Italian authorities are understood to be investigating whether Booking.com is liable for at least €150m in unpaid VAT.
The investigation relates to VAT on payments between individuals for rental properties advertised on the site, not hotels, according to the Financial Times.
Booking.com considers itself an intermediary between property owners and guests and reservations are treated as direct transactions.
However, the absence of an automatic system for VAT payment means tax is not being paid, according to some of those close to the investigation.
Italian prosecutors are now investigating whether Booking.com should pay the VAT owed on payments made between 2013 and 2018.
The €150m figure is reported to be a “conservative” estimate.
Booking.com said it had not been contacted bye the Italian authorities or notified of any issue and said the commission it charges its accommodation partners is subject to VAT and it is their responsibility to report this directly to local government”.
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