We've discussed the EU's Directives on Administrative Cooperation (or DACs) on these pages several times in the past, most recently in respect of the UK's departure from the EU when the DACs ceased to apply.

The EU Council ministers unanimously voted in favour of DAC 7 on 21 March. This is the sixth amendment to Directive 2011/16/EU, the main features of which are:

  • new mandatory exchange of information for operators of certain digital platforms;
  • the extension of the mandatory automatic exchange of information to royalties; and
  • a new legal framework for joint audits.

The mandatory exchange of information for digital platform operators (think Airbnb) is the significant development in DAC7 and applies to:

  • digital platform operators that are resident for tax purposes, incorporated or have their place of management / PE in a Member State; and
  • non-EU digital platform operators that operate digital platforms that facilitate the carrying out of reportable transactions.

Reportable activities include:

  • property rentals
  • transport rentals
  • provision of personal services
  • sale of goods

The information to be reported will include information relevant to the correct identification of the seller (e.g., name, registered office, TIN, VAT number, date of birth, business registration number, each member State of residence of the seller) and information relevant to the determination of the profits realised by the seller through the platform (e.g., the amount of the consideration paid to the seller and the number of activities for which it was paid, the account number where the consideration is credited, the address of the property being rented out, number of days for which it was rented out and type of property).

The information should be reported by the platform operator to the competent tax authorities within 31 January of the year following each calendar year starting from the one beginning on 1 January 2023.

Originally published June 2021

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