By the end of 2022, Poland will be required to implement the so-called DAC7 Directive. The directive introduces new reporting obligations on operators of digital platforms through which goods and services are offered. Starting from 2023, income earned by sellers of goods and services through the use of such platforms will be subject to reporting.
The new rules will apply to both platforms from the EU member states (including Poland) and non-EU countries.
Reportable activities will include (but are not limited to):
- rental of immovable property (including both residential and commercial property, as well as parking spaces),
- provision of personal services (time- or task-based work performed by one or more individuals),
- sale of goods,
- rental of any mode of transport.
Reportable information will include, inter alia, the data of the sellers (e.g. name, address, tax identification number) and their revenue generated through the platforms. In the case of rental of immovable properties, data of the underlying property, such as the address and land registration number will also need to be disclosed.
The information will be reported to the tax authorities, which will in turn exchange the information with the competent authorities of other EU member states. The platform operators will also be required to inform sellers of the scope of the data provided to the tax authorities.
What does it mean for your business?
The above changes will require digital platform operators to revise and adapt their current business processes. This includes:
- analyses and - if required - adjustment of the current business model for purposes of DAC7 reporting obligations,
- adaptation of the process of onboarding new clients and acquiring information about existing clients in order to expand the scope of acquired information,
- revision of terms and conditions of services provided,
- information campaigns among platform users,
- adjustment of systems to collect and process the gathered information,
- ensuring proper business controls over information gathering and reporting as well as archiving it.
The nature of the changes indicates that in order to fulfill the new obligations, operators of digital platforms will have to engage a wide range of specialists (not only tax or legal). Given the extent of the abovementioned requirements, it is recommended to take measures to prepare for the upcoming regulations.
If you have any questions regarding this obligation, we encourage you to contact us.