Bij concern- en overnamefinanciering spelen Finance en Legal beiden een belangrijke rol. Zwart-wit gesteld focust Legal vaak op hoe het in theorie moet, en Finance op hoe het in werkelijkheid gaat. Aan As of 2023, platform operators are required to actively collect, verify, and report information about their (EU) seller customers to the tax authorities. Also, they are required to report information in respect of the sales they facilitate. This does not only mean that platform operators need to be compliant towards the tax authorities. It also means that such platform operators need to review and update their contracts with customers / partners.
Offering goods and services via digital platforms is evermore increasing in today’s world. Sellers can be professional businesses but also private individuals. It is becoming more and more difficult to trace the flows of goods and services as well as the identity of the sellers for local tax authorities, to secure that these supplies of goods and services are effectively reported and taxed in the right jurisdiction.
Recently, the EU adopted an initiative (DAC7) under which qualifying platform operators will be obliged to share data with the local tax authorities regarding their users and the transactions carried out through their platform as of 1 January 2023.
Who needs to collect and report information?
The obligations under DAC 7 fall on the platform operators, being the entities that contract with sellers to make available a platform to them. A platform is defined as any digital interface that connects sellers of certain qualifying goods and services activities with potential buyers. The scope is broad and may also extend to non-traditional platforms, such as software integrated into a website or an online platform. Both EU- and non-EU resident platform operators are targeted but will only need to report with respect to transactions concerning sellers that have a sufficient nexus in the EU.
What kind of information does the platform operator need to collect and share?
On the one hand, the platform operators are subject to due diligence obligations for the collection and verification of seller-relevant information, and on the other hand, platform operators need to collect and share information around transactions carried out by qualifying sellers.
- Due diligence procedures
The due diligence requirements go beyond the standard KYC requirements and require a comprehensive collection of personal data of the seller and reporting thereof to the competent authorities. Depending on the specific activity of the seller, information about the object of sale or rent must also be collected (e.g., in the case of the rental of immovable property, the address and land register identification of the property must be collected). Also, the platform operator must verify the collected personal and factual information for accuracy and reliability. The platform operator must disclose the collected data of the seller to the relevant tax authorities. - Transactional information
The platform operator must also collect transaction-related information (e.g., account number, amount of seller’s compensation paid and credited, any fees, commissions and taxes, lease term in case of immovable assets, etc.) and report such information to the tax authorities of the relevant EU Member State.
Does the platform operator need to collect information of each seller?
Platform operators must report certain data and information on qualifying sellers active on their platform. The definition of a seller includes both private individuals and entities that have sufficient nexus in the EU (i.e., meaning that they are either resident in the EU or that they are renting out real estate located in the EU) and that are registered on the platform.
The scope of DAC7 is limited to the following reportable activities:
• the leasing of real estate located in the EU (e.g., residential, holiday and commercial properties and parking lots),
• the provision of personal services by an EU-based provider (time- or task-based work such as freelance, whether on- or offline),
• the sale of goods by a seller established in the EU (B2C as well as B2B, new as well as used goods),
• the rental of any means of transport by a seller established in the EU (car/ridesharing, etc.).
Recommendations for action
Platform operators should consider whether they are affected by the DAC7 obligations and consider amongst others the following points.
The platform operator will need to address the DAC7 obligations and take the appropriate measures, in particular set up the necessary processes, to properly and timely comply with the new due diligence and reporting obligations. In particular, the obligation to verify the information (to be) collected places a considerable responsibility on qualifying platform operators, for which they should prepare carefully.
It is expected that the new requirements will require considerable resources from the platform operators. One might think of the development of software solutions to capture and verify the required data and information. This will require setting up a technical framework that allows for accurately collecting, verifying and sharing the above information. To share this information, platform operators need to register with the tax authorities.
Last but not least, platform operators need to consider their legal position and their legal relationship with customers / partners. This includes reviewing and updating current agreements in place with their customers / partners to ensure that collecting and sharing such information from them will be possible and that these customers / partners are aware that platform operators are required to share information with the tax authorities, also in light of complying with GDPR requirements.
