EU states agree to share digital platform information to aid tax collection

By Francesca Amaddeo, Lecturer — Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland

The EU Council has reached a technical agreement on the exchange of information related to digital platforms, such as Amazon, Airbnb. The exchange will help EU states assess and collect the appropriate amount of income tax and VAT due by EU and non-EU sellers that use the platforms.

Indeed, the EU is planning a new amendment to the well-known Directive on Administrative Cooperation – 2011/16/EU. Even though its application is already broad, the exchange of information mechanism will be extended to the huge database related to digital platforms.

The adoption of a DAC 7 directive will represent a step forward in the fight against tax evasion and tax avoidance. Most of the taxable income of the sellers on digital platforms flow cross-border. Only by improving cooperation will tax authorities be able to assess income taxes and VAT due in a proper manner.

According to the agreement, reached on 25 November, the eligible digital platforms, even those sited in a non-EU country, must collect all information related to sellers, sorted by Member State.

The already-operational EU automatic exchange of information mechanism will be exploited and enhanced.

Moreover, this is the occasion for the EU to improve some aspects of this important tool.

Indeed, among other adds, DAC7 will introduce in the core of the directive a provision defining the foreseeable relevance criteria and clarification to ease group requests. Joint audits will be strengthened.

Indeed, among other adds, DAC7 will introduce in the core of the directive a provision defining the foreseeable relevance criteria and clarification to ease group requests. Joint audits will be strengthened.

The agreement is not without criticism. It is worth mentioning once more the absence of any reference to taxpayers’ rights except in the case of a data breach.

The Council will adopt the DAC7 after the receipt of the opinions of the European Parliament and the  European Economic and Social Committee, presumably within the next weeks.

• Bio
• Latest Posts
• Contact

Francesca Amaddeo

Lecturer-researcher at Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI)

Dr. Francesca Amaddeo, PhD in European law and national legal systems, is an Italian lawyer that works as Lecturer-researcher at the Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI).

Latest posts by Francesca Amaddeo (see all)

• International taxation: two-pillar plan and the OECD mainstream - February 28, 2022
• Swiss federal act on implementation of international tax agreements: ready for January 2022 - November 23, 2021
• EU Commission seeks to ease withholding tax mechanism on cross-border investments - October 26, 2021
• CJEU to review German transfer pricing obligation: do national tax rules affect EU freedoms? - October 11, 2021
• Switzerland advances withholding tax reform - May 17, 2021

email: [email protected]