EU member states adopting harmonised tax data requests for marketplaces; efficient exchange of data between tax authorities – first reports due 2024 for transactions in 2023
Adoption of Directive on Administration Cooperation (DAC 7) is underway across the EU states.
The following countries have already adopted or are reviewing DAC7:
- Austria approved in July
- Belgium approved by Council of Ministers September 2022
- Bulgaria submits bill to parliament Nov 2022
- Croatia publishes draft law August 2022
- Cyprus no draft legislation yet
- Czech approved draft law
- Denmark implemented new rules
- Estonia govt approves draft bill Oct 2022
- France approved April 2022
- Finland draft in Parliament Oct 2022
- Germany issues draft legislation August 2022
- Greece no draft legislation yet
- Hungary gazetted Nov 2022
- Ireland (2021 Finance Bill)
- Italy completed a consultation until mid-July 2022
- Latvia no draft legislation yet
- Lithuania publishes draft law September 2022; with parliament
- Luxembourg Bill presented to Parliament Jun 2022
- Malta no draft legislation yet
- The Netherlands Bill in parliament
- Romania transposed into Romanian Fiscal Procedure Code
- Poland draft legislation published Nov 2022
- Portugal no draft legislation yet
- Romania no draft legislation yet
- Slovakia Bill adopted into legislation June 2022
- Slovenia public consultation completes August 2022
- Spain Council of Ministers approved Bill
- Sweden no draft legislation yet
DAC 7 was approved by the EU Council in March 2021. The new digital platform seller rules will come into effect on 1 January 2023 (first report by 31 Jan 2024). This provides for a standard data format for requests by EU tax authorities from digital marketplaces on their third-party sellers’ VAT transactions. This includes the automatic exchange of this information (AEOI) between tax authorities. Non-compliance with these new reporting obligations will lead to substantial penalties.
DAC 7 covers all transactions for: goods; services; plus gig and sharing economies. And all transaction types – B2C, B2B. B2G, P2P etc.
The Organisation for Economic Cooperation and Development (OECD) has followed this plan to issue OECD optional marketplace reporting guidance for countries. The UK marketplace reporting requirements were recently delayed to 2024.
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Aims of the DAC 7 administrative agreement include:
- Identifying online merchants not properly declaring and paying VAT
- Providing for a consistent and efficient set of requirements for marketplaces to avoid them having not manage different requests and duplicate questions
- Legal ability for tax authorities to work together on joint audits on seller activities from 1 January 2024
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DAC aid exchange of VAT data for application of EU VAT Directive
DAC is a set of EU-level legal rules which provide for guidance on the electronic exchange of any data in the furtherance of compliance with domestic laws. It represents an amendment to the EU VAT Directive – the seventh since the 2011 Directive 2011/16/EU.
DAC 7 obliges marketplaces to provide data on their third-party sellers’ transactions, covering
- Sales of goods
- Provision of personal services
- Rentals of property, including house sharing
- Rental and sharing of transport
The information on the above supplies to be provided includes:
- Name and address of merchant
- VAT number
- Tax identification number
- Taxable supplies and income in calendar year
- Bank account details
Starts 2023; first report due 31 January 2024
The new DAC7 tax rules will apply to digital platforms operating both inside and outside the EU from 1 January 2023. Annual reports are required by the end of the first month following the reporting year. The first DAC 7 report is therefore due by 31 January 2024.