DAC 7 introduces new reporting obligations for digital platform operators in Europe

DAC 7 introduces new reporting obligations for digital platform operators in Europe.DAC 7: What is it? It’s the abbreviation for Directive 2021/514, which imposes additional reporting requirements on digital platform providers to the Financial Administration.

What is the goal? The primary objective is to encourage tax transparency, minimize tax evasion and avoidance in business activities conducted via digital platforms. Through separate tax administration requirements and unilateral reporting responsibilities adopted by some member states, standardization of reporting requirements for platform operators at the Union level should prevent an excessive administrative burden.

Who must comply with it? Platform operator (an entity that makes the platform available to sellers based on a concluded contract). The DAC7 platform operators do not apply to natural persons.

Will noncompliance be penalized? The member nations retain the option of imposing sanctions, but they must be effective, proportionate, and deterrent.

Would you like to learn more? Since the rules governing the digital economy are always changing and growing more complex, Nexia CRG assists customers that are expanding internationally to cope with the new challenges.