DAC7 - New Reporting Obligations For Digital Platforms

On March 22, 2021, the European Council adopted EU Directive 2021/514 (DAC7) which amends Directive 2011/16/EU on administrative cooperation in the field of taxation.

Member states have until December 31, 2022, to transpose the DAC7 directive into domestic law and are required to give effect to those provisions as of January 1, 2023.

The Scope

The scope of DAC7 is to extend the tax transparency rules on digital platforms in order to tackle the lack of tax compliance and the non-declaration of income earned from business activities through such digital platforms.

This will be achieved by obligating:

• digital platform operators to collect and report prescribed information on reportable sellers that use these platforms for certain commercial activities, and