If a seller is noncompliant, the platform operator must:
EU member states can set their own penalties for noncompliance.
Those will go into effect Jan. 1, 2024, at the latest.
Close the Account
What Is the Penalty
for Noncompliance?
01
When Do Platforms Need to Report?
Platforms must report all relevant 2023 business
transactions by Jan. 31, 2024.
What Are the
Reporting
Requirements?
Platforms must collect and verify registration details for
businesses and the full name, address, tax identification
number, and date and place of birth for individuals.
Platforms must report that information annually to the
relevant tax authorities. The information should include the
seller's identity, residency details and total amount of
income generated through the platform.
How Can Platforms
Verify Sellers?
DAC7 does not provide specific verification
guidance, but digital platform operators can apply
Know Your Customer and Know Your Business
best practices to identify and verify sellers. That
includes due diligence, sanctions checks and
ongoing transaction monitoring.
“Elevate Your Onboarding Game”
Unleash the dual power of
business and person verification.
Prevent Reregistration
Withhold Payment
02
If applicable, withhold payment for
relevant activities until the seller
provides the required information.
03
Tax Authorities
Digital Platform
Residency
Details
Seller’s
Identity
Income
Generated
Seller Information
What It Does
DAC7 ensures that EU member states automatically
exchange information related to the revenue generated
by sellers on digital platforms.
Who Must Comply?
DAC7 applies to any website or application that allows sellers to
connect to other users for commerce. The rule affects all digital
platforms, whether in the EU or based elsewhere, that facilitate
economic activity in the region, unless the platform is outside
the EU and has reporting obligations equivalent to DAC7.
Read the solution sheet to learn more:
Penalties for noncompliance
go into effect
Deadline to report
transactions
DAC7 went into effect
Jan. 1
2024
Jan. 1
2023
Jan. 31
2024
DAC7:
What the EU’s
Tax Transparency
Rules Mean for
Digital Platforms
The European Council’s 7th Directive on
Administrative Cooperation (DAC7) aims to
improve information sharing among European
Union taxing authorities to combat tax evasion
and ensure fairness.
Under DAC7, digital platforms are required to report
income earned by sellers on the site. That can include
sales, rental income, capital gains or fees received
through the platform.
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Trulioo is a registered trademark of Trulioo Information Services Inc. in the United States, the European Union,
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