In 2024, digital platform operators are to be obliged to provide the Head of KAS with information on vendors using these platforms (DAC Directive7). The first reporting obligation will cover 2023. These entrepreneurs should verify their businesses for compliance of their activities with the new regulations, otherwise they could face a fine of up to PLN 5 million.
New reporting obligations under threat of penalty of up to PLN 5 million
Skarbiec Law Firm offers entrepreneurs, operators of digital platforms, professional legal advice on the implementation in the company of the regulations and procedures to which DAC7 (Council Directive (EU) 2021/514 of 22 March 2021 on administrative cooperation in the field of taxation) obliges. It imposes new reporting obligations on digital platform operators who make them available to sellers of goods and services.
They have been obliged, first and foremost, to inform the Head of KAS about sellers who meet the prerequisites for reporting, the goods and services they sell on the platform and even the profits they make, and to follow due diligence procedures in verifying the status, tax residency and veracity of the data obtained from the seller. The directive aims to tighten the tax system by making it easier for tax authorities to verify that taxpayers have accounted for their activities correctly by requiring digital platform operators to report on transactions made through their platforms.
Our DAC7 Directive services include:
- audit of digital platform regulations and terms of service
- implementation of the DAC7 Directive within the company
- control and supervision of reporting obligations
- creation of regulations adapted to DAC7 requirements
Implementation of the DAC7 Directive
According to the draft law amending the law on exchange of tax information with other countries and certain other laws, implementing the DAC Directive into the national legal order, the identification data of entities offering rental of real estate or parts thereof, as well as rental of means of transport and parking spaces, and offering personally performed services, will be subject to reporting.
In the area of goods, the reporting obligation will be extended only to those sellers who, in the course of a year, carry out at least 30 transactions with a total amount of min. EUR 2,000 on the relevant platform. Ordinary citizens who make occasional, incidental sales of items online therefore need not fear.
It follows from the wording of the proposed regulations that a seller of goods will not be qualified as an entity subject to reporting if it does not exceed the indicated limit of 30 transactions and the designated amount of turnover during the year – with one platform operator. In practice, therefore, if he sells to several operators and does not reach the aforementioned limits with any of them, he will not be subject to the reporting obligation.
Significantly, the bill does not specify quantitative or quota limits with respect to sellers of services. The draft only states that government entities, listed entities, and hotel operators with more than 2,000 rental transactions in a year are exempt. It follows that the operator of a digital platform will be obliged to report to the Head of KAS on any service provider to whom it has enabled the sale of even one service performed personally.
However, the greatest responsibility and risk will fall on platform operators. Pursuant to the new Article 80i of the Fiscal Penal Code, a person acting on behalf of or in the interest of such an operator, failing, for example, to apply due diligence rules and procedures, including the collection of required documentation and reporting procedures, will be subject to a fine of up to 180 daily rates. In turn, in the amended Act on Exchange of Tax Information with Other Countries, the Head of KAS will be given the competence to impose fines of up to PLN 5 million on platforms.
The directive also imposes obligations on sellers. If you regularly sell goods or services online and your income from the sale of goods (including used goods) and services exceeds the amount of PLN 2,700 per month, you are obliged to conduct sales on the basis of a business activity. Running a business will enable you to settle accounts with the tax authorities. You can register a sole proprietorship without even leaving home.
DAC7 directive – from when?
The draft regulations implementing the DAC7 regulations into the Polish legal order were published on 8 February 2023. They were to come into force on 1 May 2023 and the first reporting under the directive would take place between 1 and 31 January 2024 for the reporting period that ended in 2023. Currently, the draft law implementing the directive into the national legal order is still at the opinion stage. It has already been amended several times.
The latest version of the draft is dated 11 May 2023 and still assumes mandatory reporting for 2023 already in January 2024. Entrepreneurs and digital platform operators cannot rest assured, as they cannot be sure when the new parliament will enact a law implementing the new reporting obligations and whether it will not operate with a retroactive mechanism to the 2023 reporting periods, as was already the case, for example, with the implementation of the DAC directive6. And among the planned penalties for non-compliance with the obligations introduced by the DAC7 is a fine ranging from PLN 100,000 to as much as PLN 5,000,000.