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DAC 7: New reporting obligation for digital platform operators in Europe

March 14, 2022

Last year, the EU Council approved the Directive 2021/514, known as DAC7, amending the Directive 2011/16/EU on administrative cooperation in the field of taxation. The DAC7 Directive introduces new reporting obligations for digital platform operators towards the Financial Administration and consequently, the scope of the automatic exchange of information between member states’ tax authorities is being extended. Digital platform operators will be required to report revenues generated by sellers using the digital platform. Reportable activities performed through digital platforms will include:

rental of immovable properties

personal services

sales of goods

rental of any mode of transport

New rules will apply from January 1, 2023 and will apply to digital platforms operated by operators from Union, as well as Non-Union jurisdictions. Member states have time to transpose the new rules into national law until December 31, 2022.

Download our overview, or read more below

Implementation of DAC7


In the Czech Republic, the Ministry of Finance is responsible for implementing DAC 7. In this context, the Ministry prepared a draft amendment to Act No. 164/2013 Coll., On International Cooperation in Tax Administration. According to the proposal, the new rules will be effective from January 1, 2023.

To implement DAC7 into national legislation, the Hungarian Parliament needs to prepare the amendment to Act no. 37 of 2013 on rules for international administrative cooperation in relation to taxes and other charges with the proposed effect from January 1, 2023.

The Romanian Ministry of Public Finance has somehow transposed the requirements provided by DAC7 within the Romanian Fiscal Procedure Code (e.g. platform operators would be requested to report transactions performed by the sellers). Still, the manner in which such reporting would be performed should be further regulated. Normally, these new requirements would be applicable starting with January 1, 2023.

In order to implement DAC7 into national legislation, the Ministry of Finance of the Slovak republic is currently preparing a draft amendment to Act no. 442/2012 Coll. on international assistance and cooperation in tax administration with the proposed effect from January 1, 2023.

What is the purpose of the DAC7 measures?

The main purpose is to support tax transparency, prevent tax evasion and avoidance in business activities performed via digital platforms. Standardization of reporting requirements for platform operators at Union level should avoid excessive administrative burden through individual tax administration requirements and unilateral reporting obligations implemented by some member states.

The exchange of information between tax authorities will allow platform operators to comply with the reporting obligation on the revenue generated by the sellers using the digital platform in a single member state.

What falls under digital platforms for such purposes?

It is important to understand the term digital platform broadly. It may be any software or electronic interface that allows a connection between the seller and buyer for the purpose of providing relevant selected activities. For example, websites or their parts, different apps, including mobile apps.

However, a company’s website that exclusively facilitates online sales of own goods of that company, is not considered a platform for the purposes of DAC7.

Which digital platform operators will have to comply with DAC7?

The platform operator is an entity that makes the platform available to sellers based on a concluded contract. However, the form of the contract is not specifically specified, it can take any form, not just in writing. Natural persons are excluded from the scope of DAC7 platform operators.

The reporting obligation will apply to the following digital platform operators who are:

tax residents of the Union, or

operators who are not tax residents of the Union, but are registered in the Union or have a seat of management or a permanent establishment in the Union and are not qualified non-Union platform operators,

foreign platform operators (doing business in the Union, but they are not tax residents, they are not registered and don’t have a management or permanent establishment in a member state, but they facilitate performance of the reportable activity) and they are not qualified non-Union platform operators. We note that such foreign operators will also be subject to special registration obligations.

Qualified non-Union platform operators are excluded from the reporting obligation as they comply with the reporting obligation in a qualified non-member state of establishment which cooperates with the member states and apply the automatic exchange of equivalent information.

If an operator, who would otherwise have had to report information, demonstrates in advance and on annual basis to the competent authority of the member state, that the platform´s entire business model is such that it does not have reportable sellers, it will be excluded from the reporting obligation.


In the Czech Republic, the competent authority will be the Specialized Tax Office.


In Hungary the competent authority will be the National Tax and Customs Office of Hungary.

In Romania, the competent authority will be the National Agency of Public Finance if no further amendments are brought.

In the Slovak republic, the competent authority will be the Financial Directorate of the Slovak Republic.

What qualifies for reporting from the seller’s revenue?

The seller’s revenue that qualifies for the reporting includes income from the rental of immovable property, including both residential and commercial property, as well as any other immovable property and parking spaces. We note that these are both long-term and short-term rentals, regardless of the form of the seller’s ownership rights to the leased property.

Furthermore, it is revenue from personal services – services performed by natural persons who act either independently or on behalf of an entity, and which are provided either online or physically offline after having been facilitated via a platform.

It is also income from the sale of goods and the rental of any mode of transport.

Income is to be understood as a remuneration in any form, excluding any fees, commissions and taxes withheld or charged by the reporting platform operator, that is paid or credited to the seller in connection with the relevant activity, and the platform operator knows or can reasonably determine the remuneration.

The reporting obligation should apply to cross-border activities as well as activities that do not have a cross-border character.

Which sellers qualify as reportable?

A seller qualified as reportable is a natural person or a legal entity that is registered on the platform during the reportable period and carries out a relevant activity. The reporting obligation applies to sellers with a residency in a member state or to those who rent immovable property located in a member state.

Non-reportable sellers are:

government entities, entities the stock of which is regularly traded on an established securities market including their related entities, large providers of high-frequency hotel accommodation (more than 2,000 activities during the reportable period)

and small sellers of goods (less than 30 activities with total revenues not exceeding EUR 2,000 during the reporting period).

Do digital platform operators have a special obligation to verify sellers?

The platform operators will be obliged not only to collect information about the seller (basic identification data such as name, primary address, date of birth, all assigned TIN-s in Union, VAT number, company registry code, information on permanent establishments, real estate information, if relevant), but also verify the data received from the sellers (with the exception of information on permanent establishments) and that the conditions for fulfilling the definition of an excluded seller are met.

They will have to keep records of the steps taken and the information based on which they carried out the verification, for at least 5 years.

The due diligence procedure will have to be completed by 31 December of the reportable period. A transitional period is also introduced; for sellers who will be registered on the platform on January 1, 2023, platform operators will be required to carry out due diligence procedure by December 31, 2024.

What data will operators report to the tax authority?

The platform operators shall report the following data:

for each reportable seller who has carried out an activity qualified for reporting:

  • information related to the seller’s verification,
  • financial account number,
  • the total remuneration paid or credited for the reportable period,
  • the number of relevant activities for which remuneration has been paid or credited,
  • any fees, commissions or taxes withheld or charged by the reporting operator during the reportable period,
  • and if the seller has rented the immovable property, also the address of the property and the respective land registration number, the number of rental days and the type of property,
  • and others.

the identification data of the platform operator, as well as the business name of the platform and the address of the website

In which member states will the operators have to comply with the reporting obligation?

If the platform operator qualifies for reporting in more than a single member state, they shall choose one of the states in which they will comply and shall inform the authorities of the other member states of which member state they have chosen.

What will be the deadline to comply with the reporting obligation for digital platform operators?

The reportable period will be a calendar year. For the reportable period, the platform operators will be obliged to make the relevant reporting to the tax authority by January 31 of the following year i.e., for 2023, which will be the first reportable period, it will be necessary to fulfil the reporting obligation by January 31, 2024.

Within the same period, the operator will also have to provide certain information to the reportable seller.

Will non-compliance be penalized?

The choice of sanctions remains at the discretion of the member states, but the penalties should be effective, proportionate, and discouraging.

The proposal of the Ministry of Finance of the Czech Republic states the possibility of imposing a fine of up to CZK 1.5 million (approx. EUR 60,000) for non-compliance with the obligations of reporting information.

The amount of the fine for non-compliance with the obligations of reporting information to the National Tax and Customs Office of Hungary and due diligence procedures at the maximum of HUF 5,000,000.

As per the Romanian Fiscal Procedure Code, failure to comply with the reporting liability may be imposed with a fine ranging from RON 2,000 to RON 14,000 based on the type of entity operating the platform. Nevertheless, it may be subject to amendments, considering that the implementation of DAC 7 within the national legislation is still ongoing.


The Ministry of Finance of the Slovak Republic proposes the amount of the fine for non-compliance with the obligations of reporting information to the competent authority of the Slovak Republic and due diligence procedures at the level of EUR 10,000, which may be imposed repeatedly.

What do we recommend for digital platform operators?

The digital platform operators should consider updating their internal systems and contractual relationships with sellers to be able to collect the required data and comply with DAC7 obligations.

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