IEIM904430 - Assumed Reporting and DAC 7 interaction

EU member states have implemented a set of similar reporting rules to the UK’s rules under an EU directive known as ‘DAC 7’. DAC 7 came into effect from 1 January 2023, one year before the UK’s reporting rules came into effect from 1 January 2024. Under DAC 7, platform operators are required to report information to tax authorities in EU member states if they have sellers registered on the platform who are resident in the EU, or rent out immovable property that is located in the EU, even if the platform operator itself is not resident in an EU member state.

Accordingly, some UK platform operators with EU resident sellers have been obliged to report information to tax authorities in an EU member state on those sellers since reporting began in 2024.

The EU has determined that the UK’s rules are ‘equivalent’ to DAC 7, and the UK now has activated exchange of information relationships with several EU member states. Where an RPO has information to report on sellers who are resident in an EU member state that is a partner jurisdiction of the UK, they should report that information to HMRC and HMRC will exchange it with the tax authority of that EU member state partner jurisdiction. In this scenario, an RPO should not need to report information on sellers resident in the EU member state partner jurisdiction directly to an EU member state under DAC7.

Where RPOs are obliged to report information under DAC 7 on sellers who are resident in an EU member state that is not a partner jurisdiction, they must not report that information to HMRC as HMRC will not be able to exchange the information with the tax authorities in jurisdictions that are not partner jurisdictions. RPOs should continue to report that information to the relevant EU member state(s) under DAC 7.