Deadlines for reporting on sellers by the platform operator – what is worth knowing before the first reporting period?

This article will answer the following questions:

• Within what deadline are platform operators obliged to fulfill reporting obligations?
• How to properly fulfill reporting obligations so as not to expose the company to penalties and sanctions?

The EU directive DAC7 sets the deadline by which information about sellers should be submitted to the competent tax authority. According to the regulation, platform operators are obliged to report information within two months from the end of the reporting period to which it relates. The Polish legislator shortened this deadline. What should we know about reporting according to the DAC7 directive? The scope of the basic reporting obligations of sales platform operators is presented below.

Changes to online trading introduced by DAC7: what is the first period for which platform operators are obliged to provide information?

Platform operators are obliged to provide information about sellers for specific reporting periods. The provisions of the DAC7 directive recognise the calendar year as the reporting period subject to the reporting obligation.

Translating this to specific dates, the legislator indicated the period from 1 January 2023 to 31 December 2023 as the first reporting period. The same time frame is included in the act implementing the directive.

Unfortunately, the act is scheduled to enter into force only on 1 July 2024, which means that the legislator delayed its implementation for a year and a half. Fulfilling reporting obligations by sales platform operators in a timely manner may therefore prove to be quite a challenge.

Within what deadline are platform operators obliged to fulfill reporting obligations?

The provisions of the DAC7 directive indicate that digital platform operators should report information on sellers using their platform within two months of the end of the reporting period. However, the Polish legislator shortened this deadline. Pursuant to the Polish act, the reporting platform operator is obliged to provide reportable information by the end of the month following the end of the reporting period. This means that the deadline for reporting to the Head of the National Tax Administration will expire at the end of January of the following year.

However, at the moment, the draft form on which the information would be submitted has not been published. 

The form must be signed with a qualified electronic signature, a trusted signature or the personal signature of the person indicated in the UPL-1 form.

How to properly fulfill reporting obligations so as not to expose the company to penalties and sanctions?

The reporting platform operator is obliged to complete due diligence procedures. They include, among others, collecting and verifying information obtained from sellers and determining their tax residence. The draft act stipulates that due diligence procedures must be completed by 31 December of the reporting period. In the case of sellers who were registered on the platform on the date on which the entity became the reporting platform operator, a deadline of 31 December of the second reporting period is also allowed.

The transitional provisions of the draft act indicate that platform operators will be obliged to exercise due diligence for 2023 until 31 December 2024 in the case of sellers who were registered on their platform on the date the act entered into force. 

Does the lack of implementation of the DAC7 directive release operators from the obligation to collect information for 2023?

Pursuant to the Act of 23 May 2024, due diligence procedures should be maintained until 31 December 2024, and the first forms should be sent to the Head of the National Tax Administration by 31 January 2025 and include data for 2023 (first reporting period) and 2024 (second reporting period). 

Due to the late implementation of the act, platform operators may feel lost. In order to exercise due diligence and thus protect their interests, operators should collect data from sellers for 2023 and collect information for 2024 on an ongoing basis. It is also worth consulting your concerns with an experienced tax advisor who will clarify the issue of reporting information about sellers.  

To sum up, the implementation of the DAC7 directive primarily means new obligations for digital platform operators operating on the e-commerce market. Regulations regarding e-commerce and the introduction of control mechanisms for online sales help to organise an important area of operation of companies deriving income from sales platforms.