As indicated in an earlier post, the EU Commission had proposed in July to amend the Directive on Administrative Cooperation, to extend the EU tax transparency rules to digital platforms. The Member States have now agreed on the proposal. The agreed proposal on administrative cooperation (DAC 7) will ensure that Member States automatically exchange information on the revenues generated by sellers on digital platforms, whether the platform is located in the EU or not.

This will allow national authorities to identify situations where tax should be paid, but according to the Commission should also reduce the administrative burden placed on platforms, who often have to deal with several different national reporting requirements. The proposal also strengthens and clarifies the rules in other areas such as joint tax audits.

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

This is a new piece in the tax transparency search of the European Commission. The next one is already on its way: the DAC 8 initiative will amend the Directive on Administrative Cooperation (“DAC”) to ensure that EU rules stay in line with the evolving economy and include other areas such as crypto-assets and e-money. New alternative means of payment and investment are indeed viewed by the Commission as posing substantial risks for tax evasion. A roadmap is open for feedback till December 21.