Posted: 12 Apr. 2022 7 min. read

DAC 7 – Expanded reporting obligations for platform operators

Overview

The expansion of the EU Mutual Assistance Directive, adopted in March 2021, is a response to the increase in online platforms and sellers and is intended to create more transparency and fairness with regards to the taxation of income from online sources. The directive must be transposed into national law by 31 December 2022 and will be applicable from 1 January 2023. The relevant data shall be submitted to the competent authority within one month of the end of the reporting period (ie by 31 January of the following year). Therefore, the first report must be submitted by 31 January 2024.

 

Scope

The material scope includes operators of platforms. These include any digital interfaces that connect suppliers of certain goods and services with potential customers. The platform operators connecting sellers with customers are therefore obliged to report.

Reporting obligation comprises the sale of goods, the provision of personal services, the rental of any means of transport as well as the rental of immovable property. Regarding the personal scope, the directive applies when either (i) the registered office, the place of effective management or a permanent establishment of the platform operator is located within the EU or (ii) the sellers operating on such a platform are residents in the EU or own immovable property located there. The industries covered by the reporting obligation are therefore very extensive: In addition to the trade of goods and services of all kinds, the mobility service providers ("car sharing") and property rental are included as well.

 

Exceptions for certain platform operators

Platform operators who only (i) process payments, (ii) offer the stated activities subject to reporting obligation, (iii) allow users to list or advertise a relevant activity (iv) only redirect or convey the users to another platform are exempt from the reporting obligations. Thus, payment service providers as well as online shops or online booking platforms operated by the respective entrepreneur for her, or his own services and products do not fall under the reporting obligations. Putting an offer online also does not fall under the reporting obligations if the transaction is not processed by the platform operator.

 

Exceptions for certain suppliers of goods and services

If a platform operator is generally obliged to report, data from certain sellers on the platform may still be exempt from the reporting obligations. This particularly applies to large sellers who offer their services on a platform: Data of legal entities under the public law, listed corporations and those legal entities for which the platform operator has carried out more than 2,000 rentals of the same advertised real estate unit during the reporting period does not have to be reported. For example, the bookings of a large hotel that are processed via a platform operator do not have to be reported if more than 2,000 bookings are made via this specific platform provider.

On the other hand, data from particularly small sellers for which the platform operator has carried out less than 30 sales of goods and the total amount of remuneration has not exceeded EUR 2,000 are also exempt from the reporting obligations.

However, general turnover thresholds do not exist for platform operators or sellers, which is why smaller companies may also fall within the scope of the directive.

 

Obligations

The platform operator is obliged to collect personal information about the sellers using the platform. These include name, main address, tax identification number, place of birth and if the seller is a legal entity or is active in the field of rental of immovable property, additional information, such as company name, business registration number, relevant activities carried out and the address of the advertised real estate unit. Personal information about the platform operator, such as name, address and tax identification number and the above-mentioned collected data as well as the number of relevant activities carried out, the amount of remuneration per quarter and the taxes collected during this period must be reported. The data needs to be transmitted via a standardized form (XML scheme). It is expected that Austrian tax authorities will determine XML-submission obligations in accordance with OECD standards.

 

Conclusion and recommendation

In a first step, it will be essential for companies operating digital platforms to determine, whether they fall in the scope of this directive and are therefore subject to the reporting obligations. If the company is affected by DAC 7, steps to implement suitable systems for information gathering and submission within the meaning of the directive should be taken. The transformation of the DAC 7-guideline into Austrian law has not happened yet and must be completed by end of 2022.

 

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Mag. Robert Rzeszut

Mag. Robert Rzeszut

Partner Steuerberatung | Deloitte Österreich

Mag. Robert Rzeszut ist Partner im Bereich Steuerberatung/Tax Litigation bei Deloitte Österreich in Wien. Als Steuerberater betreut er sowohl große nationale und international tätige Unternehmensgruppen als auch Familienunternehmen und Privatpersonen. Er ist Experte für Abgaben-Verfahrensrecht und führt insbesondere komplizierte und umfangreiche Beschwerden und Revisionen an die Verwaltungsgerichte, an Höchstgerichte sowie internationale Verständigungsverfahren. Als zertifizierter Finanzstrafrechtsexperte ist er überdies auf Selbstanzeigen und finanzstrafrechtliche Verteidigung spezialisiert.