The DAC7 directive and regulations implementing new reporting obligations in Poland

From this article, you will learn:

• Who is subject to the reporting obligations introduced by the DAC7 directive?
• How 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 of 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 the 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.

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 has not yet implemented the DAC7 directive. 

It is true that on 8 February 2023, a draft act on the exchange of tax information with other countries and certain other acts appeared on the website of the Government Legislation Center, but this draft has already been amended several times. 

Currently, the draft of the Polish act has been reviewed by the Committee for European Affairs, resulting in the latest version of the draft act of 11 May 2023.

Unfortunately, the Polish government has still not set a date for the entry of the act into force, which (like the project itself) has already been amended several times. Due to the recent parliamentary elections in Poland, it is also difficult to predict when the Parliament will consider the bill.

It should be noted, however, that the draft act of 11 May 2023 assumes reporting of data for 2023 already in January 2024 – i.e. also for the period before the entry of the act into force implementing the DAC7 directive (a similar retroactive mechanism was used, for example, at the time of introducing of the regulation of the DAC6 directive in Poland). This is information that 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.