Digital businesses — EU reporting requirements move forward

EU reporting requirements move forward

Digital platform operators will have to provide additional information to tax authorities


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Digital platform operators may soon be required to collect and verify information from sellers and providers that use their platform, now that the Economic and Financial Affairs Council of the EU (ECOFIN) has reached a technical agreement on amendment DAC7. This amendment will allow member states' tax authorities to collect and automatically exchange information on income earned by sellers on digital platforms starting in 2023.

ECOFIN is expected to adopt the DAC7 in the coming weeks. All EU member states will need to adapt and publish their implementing legislation by December 31, 2022. DAC7 will need to be enforced throughout all EU member states by January 1, 2023.

Affected entities

EU and certain non-EU digital platform operators that facilitate reportable commercial activities of EU sellers or providers or the rental of immovable property in the EU will be subject to the new reporting requirements under DAC7. Reportable activities generally include the rental of immovable property, sale of personal services, sale of goods, and rental of any mode of transport. Certain exceptions may apply for rentals made by hotel chains or tour operators where a certain threshold is met. The reporting obligation will apply to cross-border and non-cross-border commercial activities.

Affected digital platform operators will be required to collect and verify information from sellers and providers on their platform, in line with due diligence procedures. The proposal requires certain information to be reported to the sellers, providers and the relevant tax authority (e.g., amounts paid to sellers from reportable activities, platform fees and commissions incurred). Additional details must be collected and reported for transactions involving immovable property.

Timing and location of reporting

Under the proposal, platform operators must update the reportable information on a quarterly basis and disclose it to tax authorities before January 31 of the following calendar year. Non-EU platform operators required to report under DAC7 can generally elect the member state they are registered in for the purposes of the reporting rules.

The updated proposal also introduces exemptions for certain foreign platform operators from jurisdictions where adequate information exchange arrangements already exist.

Exchange of information

The proposal states that member states' tax authorities will annually exchange information automatically within the last two months of each year in which the information is filed.


The proposal requires platform operators to either close a seller's account or withhold payment if a seller fails to provide the required information after two reminders and a 60-day expiration period.

Joint audits

This update clarifies the legal framework for conducting joint audits between two or more member states. This framework is expected to be operational in all member states from 2024.

For more information, contact your KPMG advisor.

Information is current to December 8, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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