DAC7 Legislative Update
Following our regular progress update articles from the fall tracking DAC7 implementation status across the EU, we continue tracking relevant updates and developments around DAC7. But before we move into those details let’s quickly recap what is DAC7.
What is DAC7?
DAC7 is a new data sharing obligation that applies to digital platforms enabling users to:
- Sell goods (eg. Amazon, eBay)
- Rent out immovable property (eg. Airbnb, Booking.com)
- Carry out personal services (eg. Uber, TaskRabbit)
- Rent any mode of transport (eg. Turo, Click & Boat)
As per DAC7, platforms must collect identification and transaction information of their underlying EU-based sellers and share it with tax authorities until January 31st 2024.
This initiative impacts platforms of all sizes. The platforms affected by DAC7 are already putting their processes in place.
How is the DAC7 legislation evolving in each country?
Many countries have finally transposed DAC7 into their national law throughout the spring and the summer. More importantly, countries like the Netherlands and Germany started providing detailed information on the legislative interpretations of DAC7 in the form of FAQs and official guidances, and definitions of the XML schema based on which the information must be submitted to tax authorities.
A few countries like France, Lithuania, and the Netherlands have already published information on the technical details of the data submission.
To go into a little more detail and to give you a few examples, we see that France will require platforms to log in to a website where they can upload the data file (XSD) directly on the website. In other countries, like the Netherlands, information must be submitted using an electronic protocol called “SOAP”.
However, other countries have yet to share such details, which might make it difficult for platforms to prepare to meet their DAC7 compliance obligations in due time. And a few countries still have yet to transpose DAC7 into their local legislation.
Below we collected a list of links for each EU country:
- Link to DAC7 legislative texts
- Link to the Tax authority website collecting DAC7 info
- Link to technical documentation like the XML schema.
How can Fonoa help?
In less than six months, the first DAC7 will have to be submitted across the EU. Platforms will not only have to start collecting all required data points from new sellers but will also need to collect and validate data of their pre-existing sellers.
With our tax number validator, you can validate tax IDs from 100+ countries in bulk and individually and return necessary information from local databases like company name and address.
Regarding DAC7 submissions, our Data Sharing product will guide tax professionals towards compliance and automate technical complexities so you can save time while owning and controlling the end-to-end process.
Put your time and energy back into your business, not tax compliance!
Get in touch to automate these Data Sharing and DAC7 compliance processes.
Read more with our Essential Guide to DAC7 and listen to our webinars on DAC7 and Tax ID Validation.
