DAC7 IMPLEMENTATION IN THE NETHERLANDS

30/03/2022

On 22 March 2021, the EU adopted an EU Directive introducing automatic exchange of information for EU and non-EU digital platform operators[1]. Today, the bill on transparency of income from digital platforms (“DAC7”) was presented to the Dutch Lower House of Parliament[2]. As of 1 January 2023, this legislative proposal obliges digital platforms to annually provide information to the Dutch Tax Authorities (“DTA”) about sellers who earn money through their platforms. This information will be automatically exchanged with the tax authorities of the EU Member States for which this information is relevant. This will prevent people from (unintentionally) avoiding tax through these platforms.

 

The legislative proposal will provide more transparency on income earned by residents of the EU Member States through the digital platforms. This reduces the chance that taxpayers do not (fully) declare their income and therefore this ensures fairer taxation. It also prevents unfair competition with traditional (non-digital) companies and thus creating a level playing field. For example, if you rent out your house via a digital platform, or offer your services as a taxi driver via a platform, the platform must pass on information about this - such as the income earned - to the Tax and Customs Administration in the future.

 

A digital platform provides the information to one EU Member State. In order to provide the tax authorities of all EU Member States with the information they need to determine the taxes due correctly, this information is then exchanged with the EU Member States that have an interest in this through a central, secure system of the European Union.

 

This bill implements the EU Directive on transparency of income through the digital platform economy and other amendments into Dutch legislation. The other EU Member States will also implement this Directive in a similar manner.