On March 23, 2022 the Dutch cabinet sent a law proposal to implement the so-called DAC-7 Directive (Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation) into Dutch law to the House of Representatives. The expected date for entering into force of the law proposal is January 1, 2023. Consequently digital platforms will have to start registering the necessary data as of January 1, 2023.
In order to comply with the reporting obligation, reporting platform operators are required to collect specific information about sellers using their digital platform under so-called collection and verification requirements, also referred to as due diligence procedures in Directive (EU) 2021/514.
Reporting platform operators
In short, the reporting obligations of apply to any platform operator that is resident for tax purposes in an EU Member State and to platform operators who for tax purposes are not resident in an EU Member State, but who facilitate the performance of a relevant activity by reportable vendors or a relevant activity related to the rental of immovable property located in an EU Member State. Such platform operators are referred to as reporting platform operators. In order to avoid double or multiple reporting, a reporting platform operator is released from the reporting obligation if it demonstrates that the information it is required to report has already been reported by another reporting platform operator.
Information to be provide regarding reportable vendors
The information that reporting platform operators must provide relates to vendors using their digital platform. A vendor means the user of a platform who is registered on the platform at any time during the reporting period and who carries out a so-called relevant activity. Vendors that reporting platforms are required to report on (reportable vendors) are vendors who, in short, are residents of an EU Member State or who rent immovable property located in an EU Member State.
The information that reporting operators are required to report (and if applicable to collect and verify prior to reporting) can be broadly divided into three categories.
The first category regards information with respect to the reporting platform operator itself. Such as the registered office address, the Tax Identification Number (TIN) and the trading name of the platform regarding which the platform operator is reporting. In addition, information regarding reportable sellers is collected, verified and subsequently reported. In this respect a distinguish is made between reportable vendors who rent real estate and reportable sellers who carry out other relevant activities. The information regarding reportable vendors consists partly of personal data to establish the seller's identity, such as the vendor’s first and last name, its address of main residence, its TIN or, if that is not available, the vendor’s place of birth, VAT identification number (if applicable), the identification code of the financial account and the vendor’s date of birth. In addition, data such as the paid or credited consideration(s) and the associated number of relevant activities and the address and registry number of the immovable property (if applicable) are also to be reported. With regard to reportable vendors that are an entity, the reportable information also includes some additional or different information, such as the entity’s business registration number and certain information regarding permanent establishments.
Obligation to inform the reportable vendors
Reporting platform operators are also required to provide the reportable vendors with the information they report to the tax authorities of an EU Member State. This provision must take place no later than on January 31 of the year following the calendar year in which the vendor is designated as a reportable vendor. This moment is the same moment as the latest date on which the reporting operator has to provide this information to the tax authorities. In this way, the reportable vendor is aware of what information has been passed on to the tax authorities about him or her. This information includes an overview of the total consideration paid or credited to the reportable vendor, presented per quarter of the reporting period. The reportable vendor can then use this overview for its tax return.
You can download the Law Proposal here (only available in the Dutch language).
You can download the Explanatory Memorandum here (only available in the Dutch language).
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