The European Union has introduced Directive (EU) 2021/514, also known as DAC7, to enhance tax transparency in the digital platform economy, effective 2023. DAC7 applies to any software that facilitates transactions between sellers and users, except platforms used solely for processing payments, advertising, or redirecting users.
In this blog
- Understanding DAC 7: An Extension of Existing Legislation
- Reporting Requirements for Platform Operators (RPOs)
- Taking the proper steps towards tax transparency
- Contact us
- Useful links of the Dutch Tax Service
Read further below 👇
At Visma Connect, we offer extensive support for parties navigating their reporting obligations under this new directive. With our expertise and comprehensive solutions, parties can streamline the process and ensure adherence to DAC 7’s regulatory requirements. Whether through portal solutions, APIs, or consultation services, Visma Connect can help. This involves extracting essential data from source systems and ensuring DAC7 compliance without unnecessary complexity. Our years of experience in business reporting uniquely position us to facilitate seamless connectivity to Digipoort via Logius, guaranteeing our clients' timely, compliant, and reliable reporting to tax authorities.
Understanding DAC 7: An Extension of Existing Legislation
But what exactly is DAC 7? Building upon the foundation established by Directive 2011/16/EU, DAC 7 extends its scope to address the challenges the digital economy poses. At its core, it aims to promote tax transparency by requiring digital platforms to disclose information about their sellers' earnings to tax authorities. The directive seeks to combat tax evasion and foster fair competition by levelling the playing field for businesses operating within the digital ecosystem.
In the Netherlands, DAC7 is implemented through the Implementation Act for the EU Directive on the Exchange of Data in the Digital Platform Economy. This adds specific obligations for platform operators.
Reporting Requirements for Platform Operators (RPOs)
Compliance with DAC7 is essential for platform operators and sellers to ensure tax transparency and avoid penalties. Platform operators become Reporting Platform Operators (RPOs) under DAC7 if they meet specific criteria, such as being tax-resident, incorporated, managed, or permanently established in an EU member state. Even without a physical presence, operators facilitating EU sellers' activities or renting property in a Member State qualify as RPOs.
RPOs are responsible for collecting and reporting data on sellers conducting relevant activities. They must adhere to specific timelines and obligations, including implementing a 'switch-off mechanism' to prevent double reporting and administrative burdens for qualified foreign platform operators.
Taking the proper steps towards tax transparency
DAC7 is a pivotal directive in pursuing tax transparency within the digital platform economy, ushering in a new era of accountability and fairness. At Visma Connect, we recognise the complexities inherent in navigating DAC7 reporting obligations and are committed to offering robust support to our clients. Visma Connect provides the tools and guidance necessary to simplify DAC7 compliance, from portal solutions to APIs and consultation services. We can provide practical assistance to private companies by helping them set up back-office integrations and streamline the process to make it more compliant and transparent.
Visma Connect remains a trusted partner in navigating the complexities of tax compliance in the digital era. Would you like to know more about how we can help you, too?
Contact us
Contact us for a free consultation. Together, we can navigate the complexities of DAC7 and embrace the opportunities it presents for a more transparent and equitable digital ecosystem.
Useful links of the Dutch Tax Service
- DAC7 reporting obligation checklist for platform operators
- DAC7 timeline for platform operators
- DAC7 checklist for sellers, lessors, and service providers
