The New DAC7 Rules

The New DAC7 Rules

 

1 January 2023 saw the member states of the European Union adopt a series of laws commonly called DAC7.

 

 

DAC7 is an EU tax transparency law that requires the world's online marketplaces, like Nomad Stays, to provide a lot more reporting to tax authorities about the rental of immovable property in the EU,.

 

(Several non-EU countries have also introduced similar rules;, AustraliaCanada, UK, Norway etc.)

This follows a concerted push by the OECD to have all digital platforms report all transactions to the local governments https://www.oecd.org/tax/exchange-of-tax-information/model-rules-for-reporting-by-platform-operators-with-respect-to-sellers-in-the-sharing-and-gig-economy.htm

 

Most countries passed their local laws of the Directive in December 2022.

 

Wide Ranging

DAC7 is wide ranging and also covers:

  •     All platforms in the world with EU properties for rent
  •     All immovable properties for rent, including both short term and long term rental
  •     Crowdfunding businesses
  •     Personal services marketplaces
  •     Transport platforms
  •     Online goods selling platforms

 

Extra Information Required

For Stays the new DAC7 new reporting requirements include providing information about:

  •     Legal names of the registered operators of the rental properties
  •     Registered addresses
  •     Addresses of the listed property
  •     Income Tax numbers
  •     VAT Numbers
  •     Business registration numbers
  •     Dates of Birth
  •     Places of Birth
  •     Registration numbers of the land being used for rental accommodation

 

Obligations on Nomad Stays

All transaction platforms are required to:

  • Collect this information,
  • Verify the information
  • Close the accounts of suppliers that don't provide their information
  • Keep the information for 10 years.

 

Nomad Stays is now required to report to EU authorities

  • All Transactions per Stay (up to 2,000 transactions per property a year), 
  • With the registered details of the operator and owner (above), and
  • Rental periods of each booking

 

The first report is due in early 2024, and the EU plan is that reporting will move to virtually real time reporting (within 48 hours) in years to come.

 

What Nomad Stays has Done

Following the passing of the new laws Nomad Stays has rolled out new data entry pages for Stays to complete including:

  • Created a new Operator Information page for Stays to complete, and
  • Upgraded the Stay Details page to record the Land Identification Number

The pages ask only the relevant information according to the type of operator you are.

 

 

What Stays Should Do

EU (and other affected) Stays should NOW Log In and complete the new information in the new Operator Information page and the updated Stay Detail page.

Keep an eye on our other help pages also.

 

 

Note: There are a range of technical exemptions for things like if your country doesn’t issue tax numbers, or land identification numbers.  If you think you are affected by an exemption please send us an email and tell us why, innovate@nomadstays.com

Note: Stays should also be prepared for mistakes by the authorities.  For example when Spain rolled out similar rules a few years back they used the data to pre-populate income tax returns of individuals.  Unfortunately they counted all reported transactions twice which took some time to fix.

 

Read More about DAC7 and similar

You can read more about DAC7 here:


EU Directive : https://eur-lex.europa.eu/eli/dir/2021/514/oj

Reading Tips:

  • "Reporting Platform Operator" = Nomad Stays

  •  "Seller" = Stay operators

  • "Relevant Activity" means an activity carried out for Consideration and includes    
    • the rental of immovable property, including both residential and commercial property, as well as any other immovable property and parking spaces.

 

Here's what PWC says
https://www.pwc.com/m1/en/services/tax/me-tax-legal-news/2020/dac7-enforce-annual-reporting-obligations-digital-online-platforms-crypto-assets-emoney.html
 

 

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