Slovakia: Implementation of EU directive on reporting obligations of digital platforms (DAC7)
Legislation incorporating seventh directive on administrative cooperation (DAC7) approved
Legislation incorporating seventh directive on administrative cooperation (DAC7) approved
The Slovak Parliament approved on 15 June 2022 legislation incorporating the seventh directive on administrative cooperation (DAC7) in the field of taxation directive—the directive for EU Member States to collect and automatically exchange information on income earned by sellers on digital platforms.
The legislation provides that:
- Digital platform operators must within 15 days of becoming an operator of a digital platform register with the Slovak tax authorities.
- The notification obligations for operators must be fulfilled by 31 January of the year following the year in which the seller was identified as a seller subject to notification. If a different operator already notified the Slovak tax authorities on the same seller, it will be sufficient to only electronically submit an announcement that a different operator already met the notification obligation. The respective templates will be published on the website of the financial authorities.
- The operator must by 31 December of the respective period subject to notification perform a due diligence of the information on sellers and their transactions and report such information to the tax authority. For sellers registered on the platform prior to 1 January 2023, the due diligence procedures must be performed by 31 December 2024. The digital platform operators must archive the underlying information for 10 years from the end of the year in which the notification on sellers had to be filed.
- Certain sellers on digital platforms are excluded from the notification obligations, such as:
- Governmental entities
- Entities the shares of which are regularly traded on a stock exchange
- Hotels and other persons letting out real estate (if the number of transactions exceeded 2,000 in the period subject to notification)
- Sellers with less than 30 transactions, not exceeding €2,000
The legislation also introduces new obligations for operators of digital platforms concerning joint tax audits performed by the tax authorities of two or more EU Member States—effective 1 January 2023 (although some provisions relating to joint tax audits are effective 1 January 2024).
In addition, the legislation includes provisions concerning the protection of personal data and procedures in the case of breach of this protection.
Penalties for non-compliance with the notification or registration obligations range from €3,000 to €10,000 and can be imposed repeatedly.
Read a June 2022 report prepared by the KPMG member firm in Slovakia
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