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EU DAC 7 marketplaces’ seller transaction reporting Jan 2023 update

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  it:

  • Austria approved in July
  • Belgium early adopter of requirements
  • Czech approved draft law
  • France
  • Germany issues draft legislation August 2022
  • Hungary
  • Ireland (2021 Finance Bill)
  • Italy completed a consultation until mid-July 2022
  • Luxembourg Bill presented to Parliament Jun 2022
  • The Netherlands Bill ini parliament
  • Romania transposed into Romanian Fiscal Procedure Code
  • Poland completed a consultation until mid-July 2022
  • Slovakia Bill adopted
  • Spain Council of Ministers approved Bill

The EU is also reviewing a full VAT liability for digital platforms as part of its VAT in the Digital Age reforms.

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 B2C transactions for: goods; services; plus gig and sharing economies.

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

Follow all the European Union’s completed and planned reforms via VAT Calc’s EU VAT reform tracker.

Scope of DAC 7 supplies – goods, gig and sharing economies

The new rules will apply where marketplaces’ merchants or users provide any of the following:

  • Personal services
  • Sale of tangible goods
  • Rental of EU-located property, parking spaces etc
  • Rental of transport

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

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.

You can check the right VAT calculations on individual or batch transactions with our Advisor and Auditor services.

 

EU VAT reforms

Reform (click for details) Update
2025 VAT registration thresholds equivalence foreign businesses On track
Virtual events VAT rule changes Agreed
2024 Payment providers' seller transaction reporting and bookkeeping obligations On track
Digital Reporting Requirements including EU e-invoicing harmonisation Implementation of VAT in the Digital Age?
2023 DAC 7 - marketplace reporting harmonisation On track
Financial Services VAT exemption reform proposals Consultation complete; proposal 2023
Tour operator margin scheme VAT reforms EC undertaking fresh review
2022 EU definitive VAT system On hold
EU reduced VAT rate freedoms Enter into force 6 April 2022
IOSS reforms to prevent double taxation Proposals early 2022
VAT in the Digital Age proposals On track for 16 Nov 2022 publication
Single VAT Registration in the EU - extension of OSS On track for 16 Nov 2022 publication
Proposal for VAT treatment of the platform economy On track for 16 Nov 2022 publication
VAT Gap Initiative Q3 2022
2021 One-Stop-Shop (OSS) single EU VAT return In effect since 1 July 2021
Ending €22 import VAT exemption; new IOSS return In effect since 1 July 2021
Marketplace deemed supplier EU VAT reforms In effect since 1 July 2021
2020 EU four Quick Fixes for VAT In effect
Tax authorities anti-VAT fraud cooperation In effect
Tax Action Plan - 25 VAT and other tax reforms roadmap See 'VAT in the Digital Age' and others
2019 Simplification of e-services VAT compliance and thresholds In effect
Single and multi-use vouchers In effect
2018 Lower e-book and publications VAT rates In effect, although not all EU states have adopted the option
EU Generalised Domestic Reverse Charge VAT Mechanism In effect, although no country has adopted this voluntary option
2015 B2C electronic services VAT reforms - MOSS return In effect

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