Spain - DAC 7 implemented into domestic law
22 June 2023
A bill published in Spain’s official gazette on 23 May 2023 transposes the EU DAC 7 directive into domestic law and simultaneously amends the General Tax Law to align it with the DAC 7 rules. A public consultation process on regulations for the DAC 7 rules started on 12 June, and although approval of the ministerial order that will include the new reporting model has not yet been approved, the DAC 7 effective date remains 1 January 2023.
DAC 7 introduces new reporting and due diligence requirements on digital platform operators that offer goods and services via their platforms by expanding the scope of the automatic exchange of information in the EU to apply to such operators (for prior coverage, see the article in the July 2021 issue of Corporate Tax News). The DAC 7 rules require digital platforms operating in the EU to collect specific information from users offering goods or services on the platform and report that information to the tax authorities. The purpose of the measures is to ensure that persons deriving income from the sale of goods or services on digital platforms pay their fair share of tax and that EU member states automatically exchange information on income generated by sellers or service providers on the platform, regardless of whether the platform is situated in the EU.
Entities that qualify as "platform operators" or "sellers" are subject to due diligence procedures and reporting obligations, as well as certain registration requirements, which will be further developed through regulations. There also will be an automatic exchange of information between the tax authorities of the EU member states with respect to the activities conducted via digital platforms.
The new reporting obligations are effected through additional provisions in the General Tax Law, including provisions that:
- Impose penalties for noncompliance, including the temporary removal from the registry of a platform operator that fails to comply with the reporting requirements;
- Set out the consequences when a seller fails to provide the required information to the platform operator, despite receiving two reminders within a 60-day period from the first request; in such cases, the digital platform operator must close the seller's account and may prevent the seller from re-registering on the platform or withhold any payments due to the seller; and
- Introduce an obligation to retain records and documentation for 10 years and provide these to the tax authorities upon request.
Maria Gonzalez Ramos
BDO in Spain