Council agrees on common tax reporting rules

On the 25th November, the Council agreed on a supplement to European Directive 2011/16 covering cooperation between administrative authorities in the taxation sector. The abbreviation "DAC 7" refers to the seventh amendment that has been made in the meantime. This time, the focus is on extending the EU tax transparency rules to include digital platforms. This is to ensure that all those who earn money from the sale of goods or services on platforms, actually pay the fair share of tax revenue owed by them. Not least, this would also make the income of so-called "platform workers" more transparent, especially in, but not limited to, cross-border situations. In an extreme case, the platform operator, platform worker and service recipient could be located in three different countries. In these cases it should also ensure that the competent tax authority is aware of the income. The reporting requirements focus on the platform operator. It must regularly and automatically transmit all relevant income data needed to identify the platform worker, the income and strictly speaking, the turnover generated via the platform, to the authority in its country of origin. This authority will then automatically forward the information to the country of taxation. All of this will take place regardless of whether the platform operator is located in the EU or in a third country outside the EU. The procedure should not only facilitate tax access but also reduce the administrative burden of platforms, which are often subject to various national reporting obligations.

From the point of view of social security, this step is to be welcomed and it is a step in the right direction. However, the data obtained in this way cannot be used for social security purposes without further ado - if only because of the purpose limitation. Therefore, continuation of projects such as establishing a "single digital window" is important.

The Council will adopt the draft after linguistic revision in the coming weeks, following consultation with the European Parliament and the European Economic and Social Committee.