The EU legislator has introduced new reporting obligations for operators of digital platforms which will apply from 1 January 2023 to EU-resident operators and in certain cases to non-EU-resident operators and thus will likely have a global impact (Council Directive (EU) 2021/514 of 22 March 2021 – referred to as “DAC7”). Under the new DAC7 rules, platform operators will have to collect extensive information on its users and revenues generated through the platform, check the reliability of the collected information and then provide this information to tax authorities. The new rules provide for an automatic exchange of the provided information between EU member states, which will enable the tax authorities of a member state to check the user’s tax compliance with respect to income earned through the platform and VAT. Generally, platform operators falling within the scope of the DAC7 rules will have to file the first reporting by 31 January 2024, which will impose a significant administrative burden on platform operators, particularly in relation to processes that need to be set up to collect required information and conduct mandatory due diligence.

Who is required to report?

The new DAC7 rules require operators of digital platforms to collect the required information from its users and make the reporting to the competent authority. The term digital platform is broadly defined as any software, including websites and mobile applications, that allows sellers of goods or providers of certain services (see below) to be connected to potential purchasers or users.

Operators of such digital platforms fall within the scope of the new rules if they are a tax resident of an EU member state or, where the operators do not have their tax residency in a member state, if they either are incorporated, have their place of management or have a permanent establishment in a member state. In addition, the reporting obligation is extended to non-EU platform operators where the sellers or service providers on the platform or the property which is offered for rent on the platform are located within the EU.

Which activities qualify as reportable activities?

Not all activities that are offered on a digital platform trigger a reporting obligation for the platform operator. The following list of activities reportable under the new rules however show that well-known digital enterprises will fall within its scope:

  • Sale of goods (e.g. virtual marketplaces for goods)
  • Rental of immovable property (including both residential and commercial property)
  • Performance of personal services (e.g. marketplaces for freelance services)
  • Rental of any mode of transport (e.g. ridesharing apps)

Platform operators should analyse whether the transactions offered on its platform qualify as reportable activities. For example, under the current rules, peer-to-peer lending or the rental of moveable assets are not included in the list of reportable activities. However, given that digital markets are rapidly evolving, further types of services may be included in future.

Which information needs to be collected from platform users and provided to member states?

For each platform user that carries out the above described activities, the platform operator is required to collect personal information (e.g. name, address, tax identification number, VAT registration number, business registration number) and, in cases of property rentals, additional information on the rented property (e.g. address and land registration number). Pursuant to the new rules, the platform operator must check the collected information for accuracy and reliability. This due diligence process may be outsourced to third party service providers. However, the responsibility remains with the platform operator.

Further to the information collected from the relevant users, platform operators are required to report to the competent authorities inter alia the total consideration paid or credited per quarter and any fees, commissions or taxes withheld by the platform operator.

To whom should the collected information be reported and when?

The reportable information must be provided to the competent authority of the EU member state in which the platform operator has the required nexus, i.e. generally the state of tax residency (see above). Non-EU platform operators may generally choose the EU member state in which they register and make the reporting.

The reporting relates to the respective calendar year and must be filed by 31 January of the following year.

EU member states are required to exchange the reported information with other member states within two months. The EU legislator has clarified that information exchanged under the new reporting rules can also be used for the assessment and enforcement of VAT and other indirect taxes. Hence, the information will not only be used by tax authorities to assess whether a taxpayer is compliant with respect to income taxes but also to check its VAT compliance.


The EU member states must transpose the new rules into national law by 31 December 2022 and apply them as of 1 January 2023. Generally, the first reporting must be made by 31 January 2024 for the year 2023.

Operators of digital platforms should start assessing the potential implications of the new reporting obligations. This includes the assessment to which extent the platform’s users carry out reportable activities and the development of processes which enable the platform operator to fulfil the due diligence and reporting obligations imposed.