Q&A: DAC7 – reporting of information about sellers by online platform operators

The EU DAC7 directive, introducing new reporting obligations for platform operators, has caused quite a lot of confusion – both among sellers using platforms such as Allegro, Amazon, Vinted or OLX, as well as the operators of these platforms themselves. It is therefore worth familiarising yourself with the most important changes being introduced and taking a look at the scope and on whom the new obligations have been imposed, what a “relevant activity” is and which entities are not obliged to report. 

Here are the answers to over twenty questions most frequently asked to our tax advisors. 

1. When will the regulations imposed by the EU DAC7 directive come into force?

The obligations of platform operators arising from the DAC7 directive came into effect upon the entry into force of the Polish act implementing its provisions, i.e. from 1 July 2024. 

It should be noted, however, that not all provisions have been implemented in the same wording. The EU DAC7 directive, for example, provides that the platform operator must submit information on reportable sellers to the Head of the National Tax Administration within two months of the end of the reporting period, while Polish regulations provide for a shorter deadline for fulfilling this obligation – one month.

2. Does the implementation of the DAC7 directive entail the imposition of a new tax on platform operators or sellers?

No – the DAC7 directive only imposes new reporting obligations on online platform operators. On the other hand, however, the reported information will be used by tax authorities to verify the amount of taxable revenues declared by both sellers and platform operators.

3. What period constitutes the reporting period?

The reporting period covers a calendar year. According to the Polish act implementing the EU directive, the first reporting period is from 1 January 2023 to 31 December 2023.

4. What new obligations does the DAC7 directive impose on platform operators?

In connection with the implementation of the DAC7 directive, platform operators must collect information on active sellers and their sales volumes required by the regulations, thereby maintaining due diligence procedures in order to identify reportable sellers, and then, within specified deadlines, submit this information to the Head of the National Tax Administration.

5. Who are the platform operators?

The platform operator is an entity that enters into agreements with sellers in order to provide them with access to the platform or parts of it. The platform should be understood as the following solutions available to users and enabling sellers to connect with other users:

• software, including websites or parts of them,
• applications, including mobile applications,

made available for the purpose of performing the relevant activity (directly or indirectly), as well as for the purpose of determining the collection and payment of consideration for the relevant activity. Examples of platforms subject to this definition include services such as Vinted, Allegro or Amazon. 

Therefore – importantly – an entity offering only its own goods or services through its own platform will not be deemed a platform operator. 

6. What is a relevant activity?

The new regulations understand a relevant activity as the performance of one of the following activities for consideration:

• the rental of immovable property, parts thereof (including adjacent premises), or a share in immovable properties,
• the service provided in person, including work performed in a task-based or temporary mode by a natural person acting independently or for or on behalf of an entity, performed at the request of the user online or physically offline after having been facilitated via the platform,
• the sale of goods,
• the rental of any mode of transport. 

7. How important is the platform operator’s business model when fulfilling the obligations arising from the DAC7 directive?

A platform operator is the so-called excluded platform operator if:

• the business model adopted by it does not include reportable sellers 
  and 
• no later than the date of commencement of operations as a platform operator (and by the end of the month following the end of the reporting period) it has indicated in the information about sellers that the adopted platform business model does not include reportable sellers.

Another business model involves cases where the platform operator only allows excluded sellers access to the platform. 

It is also necessary to distinguish the mixed model, in which the platform operator enables transactions to be concluded via the platform or outside of it (e.g. by posting offers, advertising). In such a case, those transactions that were made via the platform are taken into account. If a given transaction can be concluded via the platform or outside of it, the mode that was implemented is important. Only those transactions that were made via the platform will be subject to reporting.

8. Who is a Reportable Seller?

A Reportable Seller in an Active Seller, i.e. one who provides a Relevant Activity during the Reportable Period or is paid or credited Consideration in connection with a Relevant Activity during the Reportable Period and is not an Excluded Seller, but is a resident in a Member State or rented out immovable property located in a Member State.

9. Who is an Excluded Seller?

Excluded Sellers are: 

• Government Entities, 
• Entities the stock of which is regularly traded on an established securities market or a related Entity of an Entity the stock of which is regularly traded on an established securities market, 
• Entities for which the Platform Operator facilitated more than 2 000 Relevant Activities by means of the rental of immovable property in respect of a Property Listing during the Reporting Period, 
• Sellers for which the Platform Operator facilitated less than 30 Relevant Activities by means of the sale of Goods and for which the total amount of Consideration paid or credited did not exceed EUR 2 000 during the Reporting Period.

It is worth carefully reading the above list, as platform operators are not obliged to report information about excluded sellers. 

10. How to determine which seller is an excluded seller?

A platform operator seeking to determine whether a seller is an excluded seller may rely on:

• publicly available information or confirmations obtained from the seller, in the case of a verified seller being a government or a political subdivision, an agency or institution of a participating member state or another state or territory, or an entity whose shares are regularly traded on an established securities market or an entity related to such an entity, 
• available documentation, in the case of other sellers.

11. Which countries are participating Member States?

The platform operator is required to report information on active sellers who are residents of a participating member state or who own immovable property in a participating member state. 

The EU DAC7 directive and the Polish Act indicate that the member states are: 

• Poland and other EU member states,
• a qualified non-EU jurisdiction (i.e. a country or territory outside the EU that has concluded an effective qualifying agreement with Poland providing for the automatic exchange of information equivalent to that provided under the reporting implemented by the DAC7 directive – and has included Poland in its list of countries and territories that have concluded an effective qualifying agreement),
• a country or territory that is not a qualified EU jurisdiction with which Poland has concluded an agreement constituting the basis for the automatic exchange of information about sellers.

12. What seller data and information about sellers must the platform operator provide to the head of the National Tax Administration?

The Platform Operator must provide the following information about sellers:

• the name and surname of the natural person or the name of the entity,
• the main address*,
• each TIN** issued to the seller and the country participating in its issuance (in the absence of a TIN – the seller's place of birth)*,
• VAT identification number, if available*,
• the date of birth of the natural person or the number in the relevant register of entities conducting business activity*,
• in the case of an entity – information on the foreign establishment through which the relevant activities are performed in the territory of the European Union, and information on the Member State in which such foreign establishment is located (if such data is available)
• financial account identifier*,
• the name and surname or company of the holder of the financial account to which the consideration is paid (or towards which it is credited)*,
• Member State of residence*,
• the value of the total consideration paid or credited in each quarter of the reporting period and the number of relevant activities for which such consideration was paid or credited (in the case of sellers performing the relevant activity in the scope of renting immovable property: the value of the consideration and the number of relevant activities in relation to the property listing) *,
• contributions, commissions or taxes withheld or collected by the reporting platform operator in each quarter of the reporting period*.

In addition, for active sellers providing the rental of immovable property:

• address of the property listings,
• land register numbers of the immovable properties belonging to the property listing,
• number of days for which the property listing was rented in the reporting period,
• type of property listing.

* this information is not required if the identity and residence of the seller are confirmed using an electronic identification service provided by a member state or the European Union. In such a case, the platform operator must obtain data allowing the identification through the electronic identification service confirming the identity and residence of the seller.

** taxpayer identification number or, in the absence of such a number, its functional equivalent used by the country of residence to identify a natural person or entity for tax purposes, including the Tax Identification Number (NIP) or the Personal Identification Number (PESEL).

13. What is meant by the term "Property Listing"?

A property listing is understood as immovable property and its parts (including adjacent premises) located at the same street address, as well as shares in these properties belonging to the same person and offered for rent on the platform by the same seller.

14. How can a platform operator enforce an active seller to provide it with reportable information?

The platform operator requests the active seller to provide information no later than the day on which the seller meets the conditions for recognition as an active seller. If the operator does not receive the required information within 20 days of the date of the request, it is obliged to request it again.

15. What to do when, despite repeated requests, an active seller refuses to provide reportable information?

When a Seller does not provide the information required after two reminders following the initial request by the Reporting Platform Operator, but not prior to the expiration of 60 days, the Reporting Platform Operator shall withhold the payment of the Consideration to the Seller as long as the Seller does not provide the information requested.

16. What to do if withholding the Active Seller’s Consideration is not possible?

In such a situation, the reporting platform operator blocks the possibility of performing the relevant activity until the information is provided by the seller.

17. What is the Single Member State Procedure?

Under the Single Member State procedure, the obligation to report seller information only applies in one single Member State and by one entity (provided that, where required, the reporting platform operator informs the other Member States thereof). 

If the platform operator is a reporting platform operator in more than one Member State, it selects one of those Member States in which it will fulfil its reporting obligations. The reporting platform operator shall notify the Head of National Tax Administration and the other Member States in which it meets the conditions for recognition as a reporting platform operator of its selection.

18. What is the single registration procedure?

Under the single registration procedure, reporting non-EU platform operators are required to register in only one Member State. 

In Poland, one-time registration is made by submitting a registration form no later than the day of commencement of activity as a reporting platform operator. The Head of the National Tax Administration, within 30 days of receiving the registration form, assigns the reporting platform operator an individual identification number for reporting purposes (a unified number within the EU).

19. Some sellers operate on different platforms – in such a situation, does each platform operator have to report information about such sellers?

No – the Act provides for an exemption from the obligation to provide information if the reporting platform operator has evidence that another operator has reported the same information (even if this took place in another Member State). Evidence will be anything that can be used to demonstrate the truth of the facts relied on by the reporting platform operator.

20. What are the Due Diligence Procedures?

Due diligence procedures are an obligation imposed by the EU directive on platform operators to identify sellers who meet the conditions for being considered active sellers (whose data is subject to the reporting obligation) and then verify them.

21. By when should due diligence procedures be completed?

The Reporting Platform Operator is required to complete due diligence procedures by 31 December of each reporting period. 

For sellers who were registered on the platform on the date the entity became the Reporting Platform Operator, the deadline for completing the procedures is 31 December of the second reporting period. The Reporting Platform Operator may rely on due diligence procedures conducted in relation to previous reporting periods – provided that the information identifying the seller was collected and verified or confirmed within the last 36 months and there is no reason to doubt its reliability.

22. Why does the Act impose reporting obligations on platform operators retroactively?

Member States were required to implement the provisions of the DAC7 directive by 31 December 2022. According to the assumptions of the DAC7 directive, platform operators are to collect information on sellers from 1 January 2023, and the first reporting period was to be the period from 1 January 2023 to 31 December 2023. 

The delay in the implementation of the DAC7 directive into the Polish legal system did not result in the postponement of the first reporting period, and therefore the information submitted in January 2025 shall include information for previous reporting periods.