EU digital platform user VAT data obligations
- May 12, 2020 | Richard Asquith
The European Commission is to put forward in July proposals for EU-wide requirements for platforms to share third-party users transactional data with tax authorities to help identify tax evasion. This would include allowing tax authorities to share user data and perform joint audits.
The measure would cover goods and services, including the new sharing and gig economies. Countries such as France and Italy already require transactional data for goods and digital platforms. Austria also requires user data disclosures, but has extended the requirement to digital services.
The measures would be aimed to enable tax administrations to obtain information to control that taxpayers pay their fair share, in particular taxpayers who earn money via the digital platform economy, as well as to provide for better cooperation across tax administrations and keep business compliance costs to a minimum by providing a common EU reporting standard.
This will require an update of the COUNCIL DIRECTIVE 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation. It is envisaged that platforms would be required to submit annual transaction details of users’ activities.
Much of the challenges for the proposal is the ability of member states to exchange private data. In particular, the set of data elements to be transmitted to tax administrations will have to be defined in a way to capture only the minimum data necessary to detect non-compliant underreporting or non-reporting, in line with the General Data Protection Regulation obligations.