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This article will answer the following questions:
- Who is subject to the reporting obligations introduced by the DAC7 Directive?
- How will the EU Directive help national tax authorities?
- What is worth knowing about the process of implementing tax regulations related to the introduction of DAC7 in Poland?
The EU DAC7 Directive is another way for tax authorities of EU countries to more effectively verify the correctness of taxpayers' settlements. And - unfortunately - as is usually the case when tightening the tax system, the new regulations introduce quite a lot of confusion, increasing the scope of reporting obligations for some taxpayers. Here is the most important information about what reporting should look like according to the DAC7 Directive.
What new reporting obligations does the EU DAC7 Directive impose on selected entities?
EU Council Directive 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7) introduced new reporting obligations for digital platform operators.
The DAC7 regulations apply to both platform operators from the European Union - including Poland - and third countries, and are intended to serve national tax authorities primarily to obtain information on transactions made via digital platforms.
What is the purpose of the provisions introduced by the DAC7 Directive?
The originators of Directive 2011/16/EU (which is extended by Directive DAC7) indicated that its implementation was intended to establish a system of secure administrative cooperation between the national tax authorities of European Union Member States and to establish principles and procedures for the exchange of information for tax purposes.
The DAC7 Directive develops the original idea and introduces further rules to improve cooperation procedures. It does this primarily by adding new obligations for digital platform operators and introducing the need to report the sale of goods and services provided via digital platforms to tax authorities. The DAC7 Directive is intended to be a response to the problem of limited availability of data on income obtained by taxpayers via digital platforms.
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At what stage are the works implementing the provisions of the DAC7 Directive into the Polish legal system?
European Union Member States were obliged to implement the DAC7 Directive into their internal legal order by 1 January 2023. However, Poland did not implement the DAC7 Directive within the set time limit.
It is true that on 8 February 2023, a draft of the Exchange of Tax Information with Other Countries Act and Certain Other Acts was published on the website of the Government Legislation Center, but it has never taken effect. Another attempt to implement the DAC7 Directive was made more than a year later. A new draft bill dated 17 April 2024 has already been reviewed by the Sejm (the lower house of the Polish parliament) and the Senate, with the latter having made no amendments to the draft.
On 11 June 2024, the President signed an Act of 23 May 2024 Amending the Exchange of Information with Other Countries Act and Certain Other Acts.
The act is to take effect on 1 July 2024. It should be noted, however, that the act of 23 May 2024 (similarly to the previous draft of 11 May 2023) provides for reporting of data for 2023 – i.e. also for the period before the entry into force of the law implementing the DAC7 directive (a similar retroactive mechanism was used, for example, at the time of the introduction of the DAC6 Directive in Poland). This information may worry platform operators who are obliged to report, because it is difficult to prepare for new obligations without the help of a tax advisor who keeps their finger on the pulse, without having reliable and verified information regarding, for example, the subject or method of reporting.
