DAC7 promotes transparency, fair taxation, and international cooperation within EU and is a crucial regulatory framework in the digital commerce landscape. Effective from January 1, 2023, it focuses on due diligence and reporting obligations for digital platforms such as online shops, food delivery and rental platforms.
Who Does DAC7 Apply To?
DAC7 applies to digital platforms that facilitate the sale of goods or services to EU customers. This encompasses a wide array of platforms, including e-commerce marketplaces, app stores, and sharing economy platforms. It’s important to note that both EU and non-EU based platforms can fall under the purview of DAC7.
Reporting Obligations
- Identification and Verification: Platforms must verify user identities, including sellers and service providers, for accurate reporting.
- Record Keeping: Platforms must maintain transaction records such as details of the nature of the transaction, the parties involved, and the amounts exchanged. In addition, the platform operator must confirm the accuracy of the collected information.
- Reporting to Tax Authorities: Regular reporting of transaction details, including seller information and amounts earned, is required annually. The first reporting deadline is 31.1.2024. Furthermore, all the digital platforms concerned need to register with a tax authority in an EU Member State to obtain a specific platform number.
Should the seller neglect to furnish identifying information, the platform operator is required, following two reminders and 60 days from the initial request, to deactivate the seller’s account on the platform. Additionally, the operator must prohibit the seller from re-registering on the platform and withhold any compensation to the seller.
What is the significance of promptly handling your obligations?
Adherence to DAC7 is crucial to avoid fines and legal repercussions, safeguarding platform reputation and operations. The total amount of fines varies quite drastically between different EU countries. For example, In Finland, the maximum fine is up to 15.000 euros. Understanding and complying with DAC7 is not only a legal requirement but a fundamental aspect of responsible business conduct as well.
Harness expert knowledge to strengthen your business
The experts of Rantalainen are ready to assist you in determining the relevance of reporting obligations to your company and advising on their integration into your operations. Don’t hesitate to reach out to us if you have any concerns.
