MemGPT/example-sec-filings · Datasets at Hugging Face

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many countries in Europe, as well as a number of other countries and
states, have recently proposed or recommended changes to existing tax
laws or have enacted new laws that could significantly increase our tax
obligations in many countries and states where we do business or require
us to change the manner in which we operate our business. For example,
in Italy, a 2017 law requires short-term rental platforms that process
payments to collect and remit Host income tax and tourist tax, amongst
other obligations. Airbnb has challenged this law before the Italian
courts and the CJEU, but if we are unsuccessful this will lead to
further compliance and potentially significant prior and future tax
obligations. In December 2022, the CJEU found that European law does not
prohibit member states from passing legislation requiring short-term
rental platforms to withhold income taxes from their hosts, however a
requirement to appoint tax representative (on which the 2017 law and the
withholding obligations are based) is contrary to EU law and the case
will now return to the national court. Airbnb' subsidiary in Italy and
subsidiary in Ireland are subject to tax audits in Italy, including in
relation to permanent establishment, transfer pricing, and withholding
obligations. Such audits could result in the imposition of potentially
significant prior and future tax obligations.

The Organization for Economic Cooperation and Development has been
working on a Base Erosion and Profit Shifting Project, and issued a
report in 2015 and an interim report in 2018 detailing 15 key actions
aimed at ensuring profits are taxed where the economic activities
generating those profits are performed and where value is created. Work
continues to be undertaken by the project with regard to each action,
and new recommendations are regularly made, including proposed new
legislation. Recent examples include the implementation of minimum
standards in local legislation to neutralize the effects of hybrid
mismatches and to appropriately tax controlled foreign companies.
Proposals from the OECD can result in an increased tax burden for us in
jurisdictions that adopt such proposals.

Of particular focus at the moment is what is known as BEPS 2.0 - the aim
to address the tax challenges arising from the digitalization of the
economy, and in 2021, more than 140 countries tentatively signed on to a
framework that imposes a minimum tax rate of 15%, among other
provisions. As this framework is subject to further negotiation and
implementation by each member country, the timing and ultimate impact of
any such changes on our tax obligations are uncertain. Similarly, the
European Commission and several countries have issued proposals that
would change various aspects of the current tax framework under which we
are taxed. These proposals include changes to the existing framework to
calculate income tax, as well as proposals to change or impose new types
of non-income (including indirect) taxes, including taxes based on a
percentage of revenue. For example, France, Italy, Spain, and the United
Kingdom, among others, have each proposed or enacted taxes applicable to
digital services, which includes business activities on digital
platforms and would likely apply to our business. In December 2022, the
EU unanimously agreed to implement the minimum tax rate legislation by
December 31, 2023 in all Member States, though whether this is
practically achievable is currently unknown. Several other countries
including Australia, Canada, Colombia, Japan, New Zealand, Norway,
Singapore, South Korea, and the United Kingdom have also committed to
implement similar legislation within the same timeframe.

The European Commission has conducted investigations in multiple
countries focusing on whether local country tax rulings or tax law
provide preferential tax treatment that violates EU state aid rules and
concluded that certain countries, including Ireland, have provided
illegal state aid in certain cases. These investigations may result in
changes to the tax treatment of our foreign operations. Due to the large

33

and increasing scale of our international business activities, many of
these types of changes to the taxation of our activities described above
and in our risk factor titled "---Uncertainty in the application of
taxes to our Hosts, guests, or platform could increase our tax
liabilities and may discourage Hosts and guests from conducting business
on our platform"could increase our worldwide effective tax rate,
increase the amount of non-income (including indirect) taxes imposed on
our business, and materially adversely affect our business, results of
operations, and financial condition. Such changes may also apply
retroactively to our historical operations and result in taxes greater
than the amounts estimated and recorded in our financial statements.

*Our ability to use our net operating loss carryforwards and certain
other tax attributes may be limited.*

While federal net operating loss carryforwards generated on or after
January , 2018 are not subject to expiration, the deductibility of such
net operating loss carryforwards is limited to 80% of our taxable income
for taxable years beginning on or after January , 2021. Utilization of
our et operating loss carryforwards depends on our future taxable
income, and there is a risk that some of our existing net operating loss
carryforwards and tax credits could expire unused (to the extent subject
to expiration) and be unavailable to offset future taxable income, which
could materially adversely affect our results of operations and
financial condition. In addition, under Sections 382 and 383 of the
Internal Revenue Code of 1986, as amended (the "ode", if a corporation
undergoes an "wnership change,"generally defined as a greater than 50
percentage point change (by value) in its equity ownership by
significant stockholders or groups of stockholders over a three-year
period, the corporation' ability to use its pre-change net operating
loss carryforwards and other pre-change tax attributes, such as research
tax credits, to offset its post-change taxable income or income tax
liabilities may be limited. Similar rules may apply under state tax
laws. We may have undergone ownership changes in the past, and we may

many countries in Europe, as well as a number of other countries and

states, have recently proposed or recommended changes to existing tax

laws or have enacted new laws that could significantly increase our tax

obligations in many countries and states where we do business or require

us to change the manner in which we operate our business. For example,

in Italy, a 2017 law requires short-term rental platforms that process

payments to collect and remit Host income tax and tourist tax, amongst

other obligations. Airbnb has challenged this law before the Italian

courts and the CJEU, but if we are unsuccessful this will lead to

further compliance and potentially significant prior and future tax

obligations. In December 2022, the CJEU found that European law does not

prohibit member states from passing legislation requiring short-term

rental platforms to withhold income taxes from their hosts, however a

requirement to appoint tax representative (on which the 2017 law and the

withholding obligations are based) is contrary to EU law and the case

will now return to the national court. Airbnb' subsidiary in Italy and

subsidiary in Ireland are subject to tax audits in Italy, including in

relation to permanent establishment, transfer pricing, and withholding

obligations. Such audits could result in the imposition of potentially

significant prior and future tax obligations.

The Organization for Economic Cooperation and Development has been

working on a Base Erosion and Profit Shifting Project, and issued a

report in 2015 and an interim report in 2018 detailing 15 key actions

aimed at ensuring profits are taxed where the economic activities

generating those profits are performed and where value is created. Work

continues to be undertaken by the project with regard to each action,

and new recommendations are regularly made, including proposed new

legislation. Recent examples include the implementation of minimum

standards in local legislation to neutralize the effects of hybrid

mismatches and to appropriately tax controlled foreign companies.

Proposals from the OECD can result in an increased tax burden for us in

jurisdictions that adopt such proposals.

Of particular focus at the moment is what is known as BEPS 2.0 - the aim

to address the tax challenges arising from the digitalization of the

economy, and in 2021, more than 140 countries tentatively signed on to a

framework that imposes a minimum tax rate of 15%, among other

provisions. As this framework is subject to further negotiation and

implementation by each member country, the timing and ultimate impact of

any such changes on our tax obligations are uncertain. Similarly, the

European Commission and several countries have issued proposals that

would change various aspects of the current tax framework under which we

are taxed. These proposals include changes to the existing framework to

calculate income tax, as well as proposals to change or impose new types

of non-income (including indirect) taxes, including taxes based on a

percentage of revenue. For example, France, Italy, Spain, and the United

Kingdom, among others, have each proposed or enacted taxes applicable to

digital services, which includes business activities on digital

platforms and would likely apply to our business. In December 2022, the

EU unanimously agreed to implement the minimum tax rate legislation by

December 31, 2023 in all Member States, though whether this is

practically achievable is currently unknown. Several other countries

including Australia, Canada, Colombia, Japan, New Zealand, Norway,

Singapore, South Korea, and the United Kingdom have also committed to

implement similar legislation within the same timeframe.

The European Commission has conducted investigations in multiple

countries focusing on whether local country tax rulings or tax law

provide preferential tax treatment that violates EU state aid rules and

concluded that certain countries, including Ireland, have provided

illegal state aid in certain cases. These investigations may result in

changes to the tax treatment of our foreign operations. Due to the large

33

and increasing scale of our international business activities, many of

these types of changes to the taxation of our activities described above

and in our risk factor titled "---Uncertainty in the application of

taxes to our Hosts, guests, or platform could increase our tax

liabilities and may discourage Hosts and guests from conducting business

on our platform"could increase our worldwide effective tax rate,

increase the amount of non-income (including indirect) taxes imposed on

our business, and materially adversely affect our business, results of

operations, and financial condition. Such changes may also apply

retroactively to our historical operations and result in taxes greater

than the amounts estimated and recorded in our financial statements.

*Our ability to use our net operating loss carryforwards and certain

other tax attributes may be limited.*

While federal net operating loss carryforwards generated on or after

January , 2018 are not subject to expiration, the deductibility of such

net operating loss carryforwards is limited to 80% of our taxable income

for taxable years beginning on or after January , 2021. Utilization of

our et operating loss carryforwards depends on our future taxable

income, and there is a risk that some of our existing net operating loss

carryforwards and tax credits could expire unused (to the extent subject

to expiration) and be unavailable to offset future taxable income, which

could materially adversely affect our results of operations and

financial condition. In addition, under Sections 382 and 383 of the

Internal Revenue Code of 1986, as amended (the "ode", if a corporation

undergoes an "wnership change,"generally defined as a greater than 50

percentage point change (by value) in its equity ownership by

significant stockholders or groups of stockholders over a three-year

period, the corporation' ability to use its pre-change net operating

loss carryforwards and other pre-change tax attributes, such as research

tax credits, to offset its post-change taxable income or income tax

liabilities may be limited. Similar rules may apply under state tax

laws. We may have undergone ownership changes in the past, and we may