DAC7

What it means

DAC7 is the EU rule under which digital platforms report their sellers to the tax authority: who they are, how many transactions they made and what was paid out to them.

It covers selling goods, providing services, renting property and renting transport through a platform. The seller receives a copy of what was reported, so they know what the office holds.

DAC7 creates no new tax and does not change what is taxable. It is an exchange of information between EU states: the platform reports in the country where it is established, and the data is passed automatically to the seller’s country. Declaring the income and paying income tax remains entirely the seller’s job.

How it works in practice

For an online shop or a service provider it means platform revenue reaches the tax administration before the return is filed. The books must match it to the cent.

The usual discrepancy is that the platform reports the gross amount including the commission it withheld. Revenue must show gross with the commission separately in costs, not just the net payout.

For clients selling on a marketplace or letting a flat through a booking platform, we ask for the annual summary the platform sends the seller before preparing the return, and compare it with the revenue records and rental income. Differences are found before filing, not in a letter from the office.

What to watch out for

Anyone who left platform revenue out of a return gets a query with exact figures. The back tax comes with late payment interest and a penalty, and the argument is against the platform’s own data.

The platform has to collect and verify the seller’s identification, including the tax number. A seller who ignores its requests or gives wrong details risks suspended payouts or a blocked account, often in the very season when most of the platform revenue comes in.