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DAC7 will require digital platforms to be more transparent

EU Member States have recently amended the Directive on administrative cooperation in taxation. Such amendments will need to be adopted by 31 December 2022, and will enter into force starting 1 January 2023.

Council Directive (EU) 2021/514 of 22 March 2021 (DAC7) extends automatic exchange of information to digital platform operators, providing tax authorities with the necessary information to enforce on them cross-border tax rules. Among the new rules, it’s been introduced an obligation for both EU and non-EU digital platforms to report revenues generated by their sellers; such information will then be automatically exchanged between Member States’ tax administrations.

Reportable activities include:

  • property rentals;
  • personal services;
  • sale of goods;
  • rental of any mode of transport.

Information to be reported are:

  • identification of the seller;
  • country of residence;
  • the seller’s profits or turnover;
  • bank account details;
  • details of property rented out.

DAC7 will also expand administrative assistance rules, introducing automatic information exchange on royalties, and the facilitation of joint audits.

SOURCE: www.eur-lex.europa.eu