EU: Tax transparency rules to be extended to digital platforms

EU: Tax transparency rules to be extended

The European Commission today issued a release concerning a recent compromise reached by EU Member States to extend the EU tax transparency rules to digital platforms. This follows a proposal in July 2020 that “those who make money through the sale of goods or services on platforms also pay their fair share of tax.”

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As noted in the EC release, the proposal on administrative cooperation will provide that EU Member States automatically exchange information on the revenue generated by sellers via digital platforms—whether or not the platform is located in the EU. This will allow national authorities to identify situations when tax is to be paid, and also is expected to reduce the administrative burden placed on platforms as they deal with several, different national reporting requirements. The proposal also clarifies the rules in other areas in which EU Member States work together, for example through joint tax audits.

Formal adoption will follow once the European Parliament and the Economic and Social Committee give their opinions. The new rules will apply as from 1 January 2023.
 

Background

Since its adoption, the original Directive 2011/16/EU has been amended six times, to include information on financial accounts, on tax rulings and advance pricing agreements, on country-by-country reports, on beneficial ownership, on reportable cross-border arrangements and now on digital platforms. 

Read a December 2020 report prepared by KPMG’s EU Tax Centre

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