The Organisation for Economic Cooperation and Development (OECD) has issued optional guidance for countries on their requirements for reporting taxable transactions of goods and ride sharing / rental of transport.
This adds to the OECD’s 2020 guidance on the reporting gig economy services offered via digital platforms. It also aligns the 2020 OECD measures with the EU’s DAC 7 2023 rules on digital platform reporting and automatic exchange of data between member states. The aim of all of these reporting obligations is to close the VAT and GST gaps by placing more onus on facilitating marketplaces to monitor and report the taxable transactions of their sellers.
Both the OECD and EU measures place heavy seller due diligence requirements on marketplaces to vet and track the activities of their third-party sellers. The aim is to drive improved VAT and GST compliance.
Exchange of member state data exchange
This new guidance includes a legal framework for the exchange of data between member states, which resembles the EU’s DAC 7 2023 measures. Contrary to DAC7, however, the Model MCAA does not limit information exchange solely on the basis of reciprocity, but rather enables jurisdictions to provide information on another interested jurisdiction even if the latter has not itself implemented reporting rules for digital platform operators.
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In recent years, many countries such as Germany, France and Austria have imposed varying VAT reporting requirements on marketplaces operating in their territories. This can be inefficient, time consumming and unproductive as the date may vary in depth (and therefore usefulness for tax purposes) and not be exchangeable between states to highlight cross-border anomalies.