EU taxation rules to strengthen administrative cooperation and include sales through digital platforms

On 22 March 2021, the European Council has adopted new rules to strengthen administrative cooperation in the area of taxation and include sales through digital platforms. The new rules aim to address the issues caused by the increasing use of digital platforms, where income earned is likely to be unreported and thus the tax is unpaid. This is particularly the case for platforms operating across multiple countries.

Under the new rules, platforms are obliged to report the income earned by sellers on their platforms. Reporting only needs to take place in one Member State under this common EU taxation framework. Such information will be automatically exchanged between Member States, which will allow national tax authorities to detect income earned through digital platforms and determine the relevant tax obligations more easily.   

The new rules will apply to platforms located both inside and outside the EU. The rules will enter into force by 1 January 2023.

The new rules also provide a framework for the competent authorities of two or more Member States to conduct joint audits. Member States shall apply the provisions from 2024 at the latest.

Further reading:

Metadata

  • Initiative
  • Taxation
  • EU 27
  • Government
  • Yes
  • no specific sector focus
  • taxation
  • English
  • 2021
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