Online sales: which users are covered by DAC7?

This article will answer the following questions:

• Is occasional selling on OLX and other digital platforms taxable?
• What is the difference between active and excluded sellers?

Pursuant to the DAC7 directive, digital platform operators will be obliged to report information on sellers to the Head of the National Tax Administration. Will data about each seller and all transactions be subject to reporting obligations? Is a new tax imposed on users of OLX and other sales platforms in connection with the DAC7 directive? 

Is every sale on OLX or a similar platform subject to the reporting obligation?

The reporting obligation depends on the seller's status, including the number and value of transactions carried out. As a rule, operators of digital platforms such as OLX, Allegro or Vinted are obliged to report information about sellers to tax authorities. The question arises whether this also applies to users who occasionally sell on this type of websites. The new regulations make this dependent on the seller's status for a specific settlement period.

Who is a seller under the new regulations introducing the reporting obligation according to DAC7?

Pursuant to the DAC7 directive and the Polish Act, a seller should be understood as a platform user who is either a natural person or an entity who, at any time during the reporting period (calendar year), is registered on the platform and performs a relevant activity (i.e. sale of goods, services performed personally, rental of immovable property and modes of transport).

Since both an individual and an entity can be considered a seller, the data collected about sellers will vary depending on their legal status.

How are sellers selling on Allegro and other digital platforms categorised?

The DAC7 Directive and the Act provide for the definition of a reportable seller, according to which a Reportable Seller means any Active Seller, other than an Excluded Seller, that is resident in a Member State or that rented out immovable property located in a Member State.

In short, the DAC7 directive and the act implementing the provisions into Polish law divide sellers into active and excluded. The obligation to report information rests only with active sellers.

A seller is considered active if they either perform a relevant activity (including selling goods on the Internet) in the reporting period, or to whom consideration is paid or credited in connection with a relevant activity in the reporting period. The platform operator is obliged to report sales regarding this group to tax authorities.

The DAC7 directive and the Act also introduce the definition of excluded sellers. According to these regulations, these are:

1. Governmental Entities, i.e.

• government of a Member State or other jurisdiction,
• any political subdivision of a Member State or other jurisdiction (which includes a state, province, county, or municipality),
• any wholly owned agency or instrumentality of a Member State or other jurisdiction.

2. Entities the stock of which is regularly traded on an established securities market or a related Entity,
3. 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; or
4. Entities 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 (both conditions should be met jointly). 

Therefore, the obligation to report data by platform operators applies to active sellers, including those selling on platforms such as OLX, Vinted or Fixly. 

Is occasional selling on OLX and other digital platforms taxable?

Please note that DAC7 does not impose a new tax on sellers. The purpose of this regulation is only to enable tax authorities to catch people who earn money by selling via online platforms and who avoid paying the income tax due on this basis. 

According to the regulations, people who occasionally sell goods on e-commerce platforms, but do not exceed the limits that require reporting their data (less than 30 sales transactions per year, the value of which does not exceed EUR 2,000 in the reporting period), can breathe a sigh of relief - their data will not be reported to the Head of the National Tax Administration.