EU marketplace reporting obligations on their sellers activities live 2024
The new digital platform seller rules came into effect on 1 January 2023 (first report by 31 Jan 2024). This provides for a standard data format for requests by EU tax authorities from digital marketplaces on their third-party sellers’ VAT transactions. This includes the automatic exchange of this information (AEOI) between tax authorities. Non-compliance with these new reporting obligations will lead to substantial penalties.
DAC 7 covers all transactions for: goods; services; plus gig and sharing economies. And all transaction types – B2C, B2B. B2G, P2P etc.
The Organisation for Economic Cooperation and Development (OECD) has followed this plan to issue OECD optional marketplace reporting guidance for countries. The UK marketplace reporting requirements were recently delayed to 2024.
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Aims of the DAC 7 administrative agreement include:
- Identifying online merchants not properly declaring and paying VAT
- Providing for a consistent and efficient set of requirements for marketplaces to avoid them having not manage different requests and duplicate questions
- Legal ability for tax authorities to work together on joint audits on seller activities from 1 January 2024
Follow all the European Union’s completed and planned reforms via VAT Calc’s EU VAT reform tracker.
DAC aid exchange of VAT data for application of EU VAT Directive
DAC is a set of EU-level legal rules which provide for guidance on the electronic exchange of any data in the furtherance of compliance with domestic laws. It represents an amendment to the EU VAT Directive – the seventh since the 2011 Directive 2011/16/EU.
DAC 7 obliges marketplaces to provide data on their third-party sellers’ transactions, covering
- Sales of goods
- Provision of personal services
- Rentals of property, including house sharing
- Rental and sharing of transport
The information on the above supplies to be provided includes:
- Name and address of merchant
- VAT number
- Tax identification number
- Taxable supplies and income in calendar year
- Bank account details
Started 2023; first report due 31 January 2024
The new DAC7 tax rules apply to digital platforms operating both inside and outside the EU since 1 January 2023. Annual reports are required by the end of the first month following the reporting year. The first DAC 7 report is therefore due by 31 January 2024.
You can check the right VAT calculations on individual or batch transactions with our Advisor and Auditor services.
