EU advances DAC 7 proposals to share digital platform tax information

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

The approval process for the EU’s new DAC 7 directive continues to move ahead untroubled.

On 10 March, the European Parliament approved the Council proposal with some amendments.

On 12 March, two days later, the Council asked the Permanent Representatives Committee to suggest the adoption of DAC 7 as “an ‘A’ item on the agenda of a forthcoming meeting”.

DAC 7 would extend the scope of automatic exchange of information among EU tax officials to the information reported by digital platform operators to each state through the amendment of Directive EU 2011/16 on administrative tax cooperation. It is the opportunity to make some adjustments, for instance, to the concept of “foreseeable relevance of information” and to provisions on requests for information for a group of taxpayers.

The proposal also seeks to specify the framework for the competent authorities of two or more Member States to conduct joint audits.

Expanding administrative cooperation to digital platforms is aimed at helping Member States address the challenges posed by the digitalisation of the economy, given that the characteristics of the digital platform economy make the traceability and detection of taxable events by tax authorities challenging and lead to a shortfall of tax revenue

The Parliament expressed awareness of the need for more resources to implement the digital platform information-sharing mechanism successfully. On the one hand, it calls for a strengthening of tax authorities’ structures, and, on the other, the legal basis must be kept updated.

Moreover, the Parliament emphasized the need for additional cooperation between jurisdictions, sometimes with third countries involved. Special attention should be given to developing countries, which are disadvantaged given the lack of proper resources, the Parliament noted.

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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).

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