DAC7 increase of reporting obligations of digital platforms

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National tax authorities are obliged to automatically share that information with tax authorities in other EU Member States. This allows tax authorities to tax the income that sellers earn from the sale of goods and services to EU customers via these digital marketplaces.

The relevant data must be submitted to the tax authorities within one month of the end of the reporting period (i.e. by 31 January of the following year). Therefore, the first report must be submitted by 31 January 2024.

In this article we provide you with a concise overview of the new set of rules. For a complete overview of DAC7 we invite you to visit our more detailed alert on this topic.

Scope

The new reporting rules are applicable to any digital interfaces, including mobile apps, that connect suppliers of certain goods and services with potential customers.

The reporting rules comprises the following relevant activities:

• the sale of goods;
• personal services;
• the rental of immovable property; and
• the rental of any means of transport. 

All activities have to be carried out against consideration.

A seller is a platform user who can be an individual or an entity registered at any moment during the reportable period on the platform and carrying out a relevant activity. A seller is a reportable seller when it is a resident in an EU Member State and carries out a relevant activity in an EU Member State or rents out immovable property located there.

Exceptions for certain platform operators

There are exclusions for platforms who only:

• process payments;
• list or advertise a relevant activity; or
• redirect or convey the users to another platform

Exceptions for certain suppliers of goods and services

Data from certain sellers on a platform may be exempt from the reporting obligations:

• Data of governmental entities;
• Data of entities listed on a stock exchange;
• Data from 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;
• Data from 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.

Information to be reported

Platform operators are required to collect and report extensive (personal) information from reportable sellers including name, main address, dates of birth, tax information number, VAT identification number; company name, business registration number, any fees, commissions or taxes withheld or charged by the platform during each quarter, etc.

What do platforms need to consider?

It will be essential for companies that operate a digital platform to determine whether their business model(s) may be impacted by DAC7 and they are therefore subject to the reporting obligations. If the company is affected by DAC7, steps to implement suitable systems for collecting information and submission should be taken.

Dutch implementation

The bill aiming to implement the changes in Dutch national legislation is pending in the Lower House of Parliament. Once the bill has been accepted, it is passed to the Senate for consideration and adoption. The bill needs to be implemented on 1 January 2023.