News Update Tax & Data protection
22 December 2022
On 20 December 2022, the Dutch Senate passed the Digital Platforms Data Sharing Transposition Act (Dutch only) for EU Directive 2021/514. The Directive, better known as ‘DAC7’ (Directive on Administrative Cooperation 7), introduces new requirements for online platforms, obliging them to report data about their users' transactions to the tax authorities. The law will enter into force on 1 January 2023.
DAC7 aims to harmonise reporting obligations throughout the EU, specifically as regards online platforms. It also governs the sharing of that information among tax authorities. Under DAC7, the provider of an online platform that allows sellers to be connected to other users for the purpose of carrying out a "relevant activity" must start collecting transaction and other data regarding those users. Sellers can be both entities and natural persons. If the seller is a natural person and qualifies as a reportable seller, certain personal data will have to be collected and reported, as further specified in DAC7.
Relevant activities are:
- The rental of immovable property, including both residential and commercial property, as well as any other immovable property and parking spaces;
- Personal service;
- The sale of goods; and
- The rental of any mode of transport.
Under the new law, the data collected by the platform must be reported to the Dutch Tax and Customs Administration (Belastingdienst), subject to certain exceptions. For instance, a seller is not reportable if it has concluded less than 30 relevant activities and the total revenue in relation to these activities is below EUR 2,000 in any year.
A crucial element under the new rules is that the relevant activity performed by the seller must be performed for a consideration, the amount of which is known or reasonably knowable to the platform provider. In practice, this has left several platform providers wondering whether or to what extent DAC7 applies to them if they have only limited or no concrete knowledge of the actual transactions taking place via their platforms. The Dutch secretary of state has suggested that such platforms contact the Dutch Tax and Customs Administration's DAC7 Team for further guidance and alignment.
Under DAC7, platform providers report to the tax authority of the jurisdiction in which they are situated. The platform providers will have to register themselves with the competent tax authority. If a platform provider qualifies in more than one EU Member State, it may choose to register with the tax authority of one Member State. The tax authorities in EU Member States may share any information they obtain from platform providers under the DAC7 framework among themselves for the purpose of levying taxes.
The data collection and reporting obligations apply from 1 January 2023 to any new users that qualify as reportable sellers – with information to be reported by 31 January 2024. For existing users that are reportable sellers, the rules are a bit more lenient. Provided that the platform provider has not started collecting the relevant data in 2023, existing users are in scope as from 1 January 2024 – with information to be reported by 31 January 2025.
The Dutch legislature is expected to further specify the data collection obligations for platform providers in a governmental decree.
For any questions about DAC7 and its impact, please contact Jeroen van Mourik or Jurre Reus.