On 07 February 2020, a public consultation was opened by the European Commission as part of the fair and simple taxation with regards to the collection and exchange of information from digital platform operators. After the receipt of feedback by the various stakeholders, European Commission published the Directive Mandatory exchange of information for digital platform operators the “DAC 7”.
The EU Member States agreed on the revised draft of “DAC 7” on the 27th November 2020 and on 10th of March 2021 the EU Parliament provided its non-binding opinion on the matter.
The Council of European Union unanimously adopted the EU directive the “DAC 7” on 22 March 2021.
B. MANDATORY EXCHANGE OF INFORMATION FOR DIGITAL PLATFORM OPERATORS
1. Purpose of DAC 7
The main purpose of DAC 7 is to:
2. Operators of Digital Platforms and Reportable Persons under DAC 7
The reporting obligations will apply to operators of digital platforms (whether EU based or Non- EU based) who allow the sellers identified as reportable sellers to connect with the users and perform reportable activities.
The legal nature of the seller will not affect the reporting obligation. The below definitions apply for EU and Non-EU digital platform operators:
In case where Non-EU operators are having similar reporting obligations toward the authorities of their home country (third country) and the authorities of that country will exchange the information with the EU authorities under a specific agreement, then the operators will be exempted from the reporting obligation. EU operators which qualify in more than one EU Member State are allowed to choose one EU Member state in which they will proceed with the reporting. Non-EU operators can choose the EU Member State where they register for reporting purposes.
3. Reportable Activities
The reportable activities performed by the sellers through digital platforms, whether cross-border or domestic, are the following:
4. What information will be reported and the relevant deadlines
The reported information will include:
The digital platform operator should report to the authorities the abovementioned information on 31st January of the year following the calendar year in which the seller is considered as a reportable seller.
The authorities of the EU Member State that will receive the information have the duty to exchange the information with other EU Member States.
C. THE WAY FORWARD
The “DAC 7” will be published in EU Official Journal and the EU Member States must proceed with the implementation of the new directive by 31 December 2022. The new rules will be applicable from 01 January 2023. The reportable information for the calendar year 2023 will be reported by 31st of January 2024.