MILAN - Two former finance chiefs at travel website Booking.com are set to be questioned after Dutch authorities agreed to cooperate with Italian prosecutors on a tax investigation, the Dutch prosecutors office confirmed to Reuters.

The Italians launched their investigation in 2018 into Booking.com, which is based in the Netherlands, over the way it handles taxation of properties booked through its website.

Italy's Guardia di Finanza tax police alleged in June last year that Booking.com evaded 153 million euros ($153 million) of value added tax (VAT) in connection with holiday rentals from 2013 to 2019.

In what a source with direct knowledge of the matter called a decisive step, Dutch magistrates have now finally accepted a European investigation order (OIE) sent by Italy to allow Italian prosecutors to conclude their investigation.

A first OIE was sent by the Italians in August 2018 and was rejected by Rotterdam prosecutors in May 2019, while a second request with supplementary information from August 2019 eventually led to a meeting last month.

A spokeswoman for the Dutch Public Prosecution Office confirmed the agreement while Booking.com said it was cooperating with officials in both European Union countries.

"We indeed continue discussions and cooperation with the tax authorities – in Italy and the Netherlands," a spokesperson for Booking.com told Reuters.

In the OIE document, the Italians have asked to question Olivier Bisserier, chief financial officer at Booking.com from 2013 to 2019, and Marcela Martin, CFO from 2019 to 2020, both of whom are under investigation.

Bisserier declined to comment on the case. Martin did not respond to Reuters' emails requesting comment.

The source said the breakthrough came on Oct. 24 at a meeting between Rotterdam's Prosecutor General Cornelia Becker, officials from the Dutch tax police and revenue agency on one side, and Genoa's deputy chief prosecutor Francesco Pinto and his colleague Giancarlo Vona who are leading the Italian investigation.

Dutch and Italian prosecutors plan to meet again in January 2023 for the handover of requested data and the joint interview of the two former managers in the Netherlands, the source added. The Dutch will lead the questioning.

The OIE document notes that questioning could result in Italian prosecutor dropping their investigation into the two former executives.

TAX COLLECTION

In a report sent by the Genoa Public Prosecutor's Office for the meeting in the Netherlands, the Italian magistrates wrote that Booking.com acknowledged an invitation to cross-examination sent by Italy's tax office and also provided statements and its own critical remarks.

"It can be presumed that the assessment will lead to a proportional reduction" of the contested amounts, the Italians wrote in their report, which has been reviewed by Reuters.

Booking.com acts as an intermediary between property owners and guests. Private accommodation sites often have no VAT number, but the Italian authorities believe the online travel agency should collect tax in such cases.

The Italian tax police have said they believe that failure to levy the tax allows Booking.com, owned by Delaware-based Booking Holdings Inc, to undercut other hotel groups.

The company had said that hotel and bed-and-breakfast owners were themselves responsible for collecting and paying the VAT they owed in Italy and other European Union countries.

($1 = 1.0002 euros)

(Additional reporting by Toby Sterling in Amsterdam, editing by Keith Weir and Elaine Hardcastle)