Platforms outside the EU will also be subject to income data exchange.

Dr. S-W – 09/2020

The European Commission is working on an amendment to the 2011/16/EU Directive, which regulates cooperation between national administrations in the field of tax law. This Directive provides, interali, for the automatic exchange of data on income from employment, pensions and real estate.  However, since the Directive came into force, the social and economic environment has changed fundamentally as a result of the digital penetration. In particular, the digital platform economy makes it difficult to track and detect taxable transactions especially because they often take place across borders. As a result, tax authorities often lack knowledge of income generated via platforms through the sale of goods or the provision of services. Previous consultations have also confirmed the impression of "under-reporting". With the objective of fair taxation, the Commission is now taking steps to extend cooperation tax authority co-operation with a proposal for a Directive amending the 2011/16/EU Directive, COM(2020) 314 final version of 15. 7. 2020. The proposal builds on strategies of the OECD.

A harmonised framework for an EU-wide reporting system should ensure access of tax authorities to all relevant income, even if the platform operator is based outside the EU. To this end, each Member State will establish or make available a "one-stop shop for registration and reporting". The platform operator will only have to supply to one of these bodies, which then forwards the data to the competent authorities. As a result, double reporting will be avoided and the bureaucratic work of the platforms is minimised. Platform operators from a third country must also register in an EU country (of their choice). Platform users, who generate potentially taxable income through this platform will be identified by their address (main residence in the EU), their tax or VAT identification number.

The Commission estimates the one-off costs incurred by all parties involved (public authorities, platforms) as a result of the introduction at several hundred million euros, and the running costs at tens of millions of euros per year.  

It should be possible to use the data obtained not only for the purposes of direct taxation but also for indirect (value added) taxation. However, use for social security purposes is explicitly excluded. According to Article 2, the Directive did not apply from the outset to compulsory social security contributions because of the chosen legal bases alone (Articles 113 and 115 Treaty on the Functioning of the European Union (TFEU)). This will not be changed by the proposed amendment. However, the Commission’s proposal points in the right direction: subjecting electronic platforms to mandatory transmission of income data of platform workers. Above all, the project makes it apparent that the well-known obstacles to mandatory reporting by platforms, based in a non-European country, are not insurmountable. It is hoped that Expert proposals for the establishment of a "Digital Single Window" will be pursued. This common digital reporting system was explicitly designed to enforce social security obligations.