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How can DAC7 affect you

You may have heard of DAC7, but not really taken the time to read up on what it actually means for you and your business – if it affects you at all. Here you will be able to get insights into what DAC7 is, take a test if it applies to your digital platform, and read about how it may affect you.

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Are your Affected by DAC7?

Many businesses are unaware of the potential impact of DAC7 on their operations. Don't leave it to chance - take our quick test to find out if your company is affected by DAC7 regulations. Ensure you're informed and prepared to navigate this complex legislation by understanding your obligations and potential risks.

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How will DAC7 impact platforms?

Gain valuable insights on the implications of DAC7 for digital platforms and businesses. Watch our informative webinar, led by industry experts, to learn about the challenges and opportunities presented by this regulation. Equip yourself with the knowledge to adapt and thrive in the changing landscape of international taxation. Don't miss out - access the webinar now.

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What is DAC7?

DAC7 is a directive on cooperation between different EU member states on gathering and reporting data about natural and legal entities and their earnings through digital platforms and marketplaces.

Consequently, certain digital platforms will be responsible for collecting, verifying, updating, and reporting data about the sellers in the platform and their earnings. Digital platforms have to start collecting data from the 1st of January 2023.

Furthermore, the digital platform has to submit its first report by the 31st of January 2024. Bear in mind that different EU countries may implement the Directive slightly differently. However, this should serve as a general guideline for the minimum requirements.

What do I have to do?

If you are responsible for reporting DAC7 data, there are a few things that you need to do. In brief, you need to (1.) collect data, (2.) verify data, (3.) update and manage data, and (4.) report data. These steps are described briefly below.

Where do I report?

The digital platform shall report the data collected about the seller as well as the payments going through the platform. The digital platform is responsible to submit the reports to the competent authorities in one jurisdiction. The competent authority will then forward it EU country in which the Seller is based. The jurisdiction, in which the digital platform reports, depends on where the digital platform is located and its corporate structure. A simplified list can be found below:

  • A digital platform that is based in only one EU country, has its management in only one EU country, or has a permanent establishment in only one EU country shall report the data to the competent authority of that country.

  • A digital platform that is based in several EU countries, has its management in several EU countries, or has a permanent establishment in several EU countries shall report the data to the competent authority of its election.

  • A digital platform that is not based in an EU country, does not have its management in an EU country, or does not have a permanent establishment in several EU countries, shall register with the competent authority in the EU country of its choosing and report the data there.

Consequences of non-compliance

The EU-member states may set their penalties for non-compliance with DAC7 independently. However, DAC7 states that the penalties should be “effective, proportionate and dissuasive”. The Member States and their competent authorities are responsible to implement DAC7 into their laws and regulations. Consequently, there may be discrepancies between the penalties in the different Member States. Furthermore, the penalties may be decided on a case-by-case basis depending on the seriousness of the offense. Furthermore, the Member States shall take coordinated action against non-EU digital platforms that are not fulfilling the requirements. This involves making it difficult or impossible for those digital platforms to operate.

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Insights from our experts

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