Corporate Tax News Issue 64 - November 2022

DAC 7 implementation rules being drafted

Poland’s Ministry of Finance is drafting rules that will implement the EU DAC 7 directive (Directive 2021/514) into Polish law as from 1 January 2023. The EU Directive on Administrative Cooperation in the Field of Taxation—known as DAC 7—will expand the scope of EU transparency rules by introducing new reporting obligations on digital platform operators that will be required to collect information on revenue generated by sellers using their platforms and carry out certain due diligence procedures (for prior coverage, see the article in the July 2021 issue of Corporate Tax News).

DAC 7 will ensure that the 27 EU member states automatically exchange information on the revenues generated by sellers on digital platforms, regardless of whether the platform is located in the EU. This will allow national tax authorities to identify situations where tax should be paid, and thus help prevent tax avoidance and evasion, and reduce the administrative burden on platforms themselves by introducing standardised reporting requirements in each EU member state and requiring reporting in only one state. DAC 7 also enhances the rules in other areas where member states collaborate to prevent tax abuse, e.g., by conducting joint tax audits.

EU member states must transpose the DAC 7 rules into national law by 31 December 2022, with the new rules applying from 1 January 2023. Notably, the rules will apply to digital platforms operated within and outside the EU.

The Polish rules under development will follow those in the directive.


DAC 7 will introduce a new reporting requirement for operators of digital platforms that make it easier for sellers to perform activities such as selling goods, providing services, and leasing real estate or vehicles and parking spaces. Although the reporting obligation will rest with the digital platform operator, the information to be reported will be the income earned by individual sellers using the platform; the operator also will have to produce additional data on sellers and their EU-situs real property used for rental purposes.

Under the  DAC 7 rules, platforms will be required to report certain information about persons and businesses offering goods or services for sale via a platform and carry out due diligence procedures. The information will be provided to the tax authorities of the EU member state with which the platform has nexus (any EU member state for platforms outside the EU), then exchanged with the tax authorities of the other member states and subsequently recorded in a central EU register, which will be accessible by all EU tax authorities. The platform will need to obtain the information from the persons and businesses operating on the platform. Penalties will apply for noncompliance.

The rules will include:

  • Glossary of terms;
  • Reporting obligations;
  • Due diligence procedures;
  • Procedures for the selection of a single member state and single registration;
  • Rules for auditing reporting platform operators; and
  • Penalties and fines.


A “platform” is any software, including a website or a part thereof, as well as all applications, including mobile applications, accessible by users and allowing sellers to be connected to other users to perform (directly or indirectly) a relevant activity to such users. A platform also includes any arrangement for the collection and payment of consideration in respect of a relevant activity. Payment service provider entrepreneurs, entrepreneurs only providing listing or advertising services and platforms only redirecting or transferring customers to other electronic interfaces will be exempt from the reporting obligations.

A digital platform operator is any entity that concludes an agreement with a seller to provide it with access to all or part of the platform. A reporting platform operator is one that:

  • Is tax resident in the EU;
  • Is incorporated under the laws of an EU member state;
  • Has a place of management in a member state;
  • Is not resident for tax purposes or incorporated or managed in a member state and does not have a permanent establishment (PE) in the EU but facilitates relevant activities or the leasing of immovable property in a member state.

A relevant activity” is one that involves the sale of goods, the provision of services, the rental of a mode of transport and the leasing of residential and commercial immovable property for consideration.

A “covered seller” is an individual or a legal entity that is registered on the platform during the reportable period and carries out a relevant activities during that period. The reporting obligation applies to sellers that are resident in a member state and those that rent immovable property located in a member state.

Reporting obligations and due diligence

Digital platform operators will have to provide information on relevant transactions taking place on their platforms and the income received by sellers, as well as personal information on the sellers themselves.

The scope of reportable data is extensive. In addition to details that identify a platform user (see below), reportable data will include information about the user’s account (if available to the operator), information on relevant transactions, such as the total consideration paid or credited in the course of each quarter of the reporting period, the number of relevant activities in respect of which the consideration was paid or credited, as well as any fees, commissions or taxes withheld or charged by the reporting platform operator in each quarter of the reporting period. This information will have to be reported to the tax authorities of the relevant member state.

As noted above, due diligence requirements also will apply to digital platform operators and Poland’s rules will dedicate an entire chapter to these requirements.

Specifically, platform operators will have to verify sellers and adapt their systems so they are able to capture the data required for the proper implementation of the reporting obligations and ensure that data collected does not violate the rules under the EU General Data Protection Regulation (GDPR). The platform operator will have to verify that the information collected for reporting purposes is accurate and reliable. The reporting platform operator can only complete due diligence procedures for active sellers. According to Poland’s Ministry of Finance, in addition to reporting relevant information to the head of the tax authorities, digital platform operators will have to inform the individual sellers about the scope of their data that will be reported.

Information to be collected on the seller includes its name, address, platform account number, tax identification number, whether the seller carries out its activities through a PE, etc. In addition, the platform operator will need to verify the accuracy and reliability of the collected information. It should be noted that a digital platform operator may use a third-party service provider to fulfil the due diligence obligations, although the platform operator is ultimately responsible for the accuracy of the information. The platform operator then must provide the seller's data to the relevant tax authorities.

Under Poland’s rules, the reporting platform operator will report to the Head of the National Tax Administration (Head of KAS) information about reportable sellers for the reporting period. This information will have to be provided by 31 January of the year following the calendar year in which the reporting platform operator identified the seller as a reportable seller, with the first report submitted by 31 January 2024.

For sellers that were registered on the platform as of 1 January 2023, or as of the date the entity became a reporting platform operator, due diligence procedures will have to be completed by 31 December of the second reporting period for the reporting platform operator.

Single operator registration

Reporting digital platform operators will be required to register with the authorities of an EU member state by 31 January of the year following the calendar year in which the provider was identified as a reporting operator.

The new Polish rules will introduce additional (aside from the reporting itself) obligations for digital platform operators. There will be additional registration requirements and a requirement to obtain another number (i.e., the “individual platform number”) necessary to comply with this obligation. Confirmations of the assignment of such numbers will be issued by the Head of KAS. An operator could forfeit that number, for example, by failing to submit a report despite a reminder from the tax authorities. In such situations, it will be possible to obtain a new number, but only after paying a PLN 1 million fine.


DAC 7 provides for penalties for violations of the reporting obligations, but implementation of the penalties will be up to the individual EU member state.

The Ministry of Finance is preparing preliminary legislation that will provide for fines ranging from PLN 100,000 to PLN 5 million. The penalties would also provide for the possibility of deleting the platform operator from the register as a VAT payer.


The Ministry of Finance is still working on the draft DAC 7 regulations, so the precise contours of the rules are not yet known.

Rafal Kowalski