DAC7: Reporting obligations for EU digital platform Operators

On 22 March 2021, the EU Council adopted EU Directive 2021/514 (commonly referred as “DAC 7”) amending Directive 2011/16/EU (DAC-6) on administrative cooperation in the field of taxation.

As per DAC-7 implementation, the Digital platform Operators in the EU are obliged to report to the tax authorities, once a year, revenue, personal, and business information for each reportable seller (their providers) who has carried out an activity qualified for reporting as well as the identification data of the platform operator, the business name of the platform and the address of the website.

Member States shall implement DAC7 by 31 December 2022  and apply their transposing DAC7 legislation as of 1 January 2023 onwards.

Digital platform Operators in the EU are considered the below:

  1. EU tax residents;
  2. Non-EU tax residents, registered, with a management or permanent establishment in the EU and are not qualified non-EU platform operators;
  3. Foreign platform operators doing business in the EU, but are not tax residents, nor are registered, nor have a management or permanent establishment in a member state, but facilitate performance of the reportable activity) and they are not qualified non-EU platform operators. It is worth to note that such foreign operators will also be subject to special registration obligations.

In case of non-compliance with DAC-7, i.e. late or incomplete reporting, platform operators will be subject to fines determined by individual EU member states.

Even though the reporting obligation remains with the platform operators, sellers are obliged to disclose required information to reporting platform operators to enable them perform the due diligence procedure. Failure to do so might cause the closure of their account with the digital platform.

The deadline for the first reporting by platform operators is on January 31st, 2024.

For further information relating to the DAC-7 implementation in Cyprus, please contact Ms. Andri Papageorgiou, Senior Accountant in our Eurofast office in Nicosia, Cyprus at nicosia@eurofast.eu

Andri Papageorgiou
Senior Accountant
Eurofast Nicosia