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DAC7 adds reporting obligations for EU digital platform operators

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Daan Arends, Wouter Kolkman and Jesse Peeters of DLA Piper Netherlands consider the impact of the latest EU directive on administrative cooperation in the field of taxation (DAC7), and explain how companies should prepare.

On March 22 2021, the Council of the European Union adopted Directive 2021/514 amending Council Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7). DAC7 introduces a new reporting obligation for digital platform operators that conduct business in the EU. 

In addition, the capabilities of exchange of information (EOI) between EU member states is enhanced. It is anticipated that DAC7 will become effective from January 1 2023, making it mandatory for digital platform operators to report information on the sales of certain types of goods and services on their platform. 

Digital platform operators that fall under the scope of DAC7 

The obligations under DAC7 apply to a broad range of digital platform operators:

  • Those that operate a digital platform that is accessible to users and sellers for the sale of goods and certain types of services. (The definition of platform encompasses both websites and mobile phone applications);

  • Those that have a legal or commercial presence in EU; and

  • Those whose platform is used by sellers for carrying out a ‘relevant activity’.

The reporting obligations of DAC7 only apply to (i) platform operators that are tax-resident or established in the EU (either by incorporation or permanent establishment), and (ii) foreign platform operators that perform commercial activities in the EU but do not have any legal or tax presence in the EU.

Platform operators only have a reporting obligation if their platform is used by sellers for carrying out a relevant activity. These sellers are known as reportable sellers. A relevant activity is defined as carrying out the following activities:

  • The rental of immovable property, including both residential and commercial property, as well as any other immovable property and parking spaces;

  • A Personal Service (time- or task-based work performed by one or more individuals, carried out at the request of a user, either online or physically offline after having been facilitated via a platform);

  • The sale of goods; or

  • The rental of any mode of transport.

Digital platform operators falling under DAC7 rules are qualified as ‘reportable platform operators’. 

Digital platform operators established in a jurisdiction outside the EU which has reporting obligations equivalent to the DAC7 rules are exempt from reporting under DAC7. The European Commission will publish a list of jurisdictions that it considers to have equivalent reporting obligations.

Reporting obligations under DAC7

Reporting platform operators first need to obtain information from the sellers active on their platform to identify which of them qualify as reportable sellers. The reporting platform operator then needs to verify whether the information provided by sellers is reliable and correct. 

Once a reporting platform operator has identified the reportable sellers, it must collect and provide the following information to the competent authority of the member state in which the reportable seller is resident:

  • Sufficient information on reportable sellers so that local authorities can identify them. This includes the full name of the seller, the primary address or place of establishment, the tax and VAT ID numbers, and business registration number; and

  • The income earned by reportable sellers by using the platform, as well as other relevant information. This could include a description of each relevant activity, and the fees or commissions charged to reportable sellers. Where the reportable seller leases immovable property through the platform, the reporting platform operator needs to provide information that allows the authorities to identify the immovable property (such as the address, property registration number, and type of property listing) and the number of days for which the property was rented.

Administrative requirements and sanctions 

The reporting platform operator needs to inform the relevant authority before January 31 of the year following the calendar year in which the seller is identified as a reportable seller. The reporting platform operator must keep records for at least five years (but not more than 10 years) following the end of the reportable period. 

In cases of non-compliance with DAC7, reporting platform operators will be subject to sanctions that are similar to the sanctions imposed for violations of DAC6. Although every EU member state is required to impose effective and deterrent sanctions, there is no uniform set of sanctions across the EU. 

This implies that sanctions may vary amongst EU Member States, but penalties should be deterrent and effective in each EU member state. For example, in the Netherlands, reportable platform operators can be subject to a maximum penalty of €900,000 ($950,000) or criminal prosecution for non-compliance with the DAC7 rules.

Concluding remarks

With the proposed entry into effect of DAC7 on January 1 2023, digital platform operators doing business in the EU should assess whether they fall under the scope of DAC7. If the reporting obligations of DAC7 apply to a platform operator, it is important to set up a process for collecting relevant information from the reportable sellers that are active on the platform already in 2022. 

This process should include:

  • An assessment of the exact activities of reportable sellers;

  • The collection and verification of the relevant data from reportable sellers; and

  • Determining a process for reporting this information to the local tax administration. 

The information reported may subsequently be subject to the automatic exchange of information (AEOI) between tax administrations. Non-compliance with these new reporting obligations will lead to substantial penalties. 

The earliest reporting deadline to bookmark likely will be January 31 2024 (for the calendar year 2023). Furthermore, platform operators should also determine whether changes to their IT systems and technology are required to allow reporting under DAC7.



Daan Arends

Partner, DLA Piper Netherlands





Wouter Kolkman

Attorney-at-law, DLA Piper Netherlands





Jesse Peeters

Tax advisor, DLA Piper Netherlands


















































































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