- Am I impacted by DAC7?
- Who can register to report in Ireland and what’s the deadline for registration?
- When is the first report due?
- How can I report?
- Are there any penalties for non-compliance?
- How should I approach setting up a sustainable compliance program for DAC7?
- How can EY help?
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Am I impacted by DAC7?
Sharing and gig economy companies will be heavily impacted by this – in simple terms any Operators, based in a jurisdiction adopting DAC7, that are acting as intermediaries that provide a digital platform which matches buyers, sellers and service providers are likely impacted by the regime. Sellers of services such as car service, taxi, time-base real property rentals, food delivery services, artisan crafters, those offering travel experiences and many more may be reportable.
Who can register to report in Ireland and what’s the deadline for registration?
Both EU and non-EU platform operators can now register their DAC7 reporting obligation on the relevant ROS portal to obtain their platform operator ID and have until the 30th of November to do so. This deadline applies to:
i. An EU platform operator that:
- is a resident in Ireland or,
- is incorporated in Ireland or,
- has a place of management in Ireland or
- has a permanent establishment in Ireland and is not a qualified non-union platform operator
ii. A non-EU platform operator that facilitates:
- the carrying out of a relevant activity by reportable sellers in a Member State or
- a relevant activity involving immoveable property located in a Member State
If the above criteria are only met later, the platform operators must register with The Irish Revenue Commissioners (Revenue) by the last day of the month following the month in which one of the above conditions is fulfilled.
When is the first report due?
The reporting portal will be open on 1st of January 2024 and annual returns pertaining to the financial year 2023 will have to be filed by 31st of January 2024 at latest. Platform operators should not wait until the deadline to submit as time must be allowed for clearing any submission errors.
How can I report?
Revenue are in the process of finalising the DAC7 reporting schema. The schema is not expected to deviate from the published schema by the EU Commission. Reports will need to be uploaded on the Revenue Online Service (‘ROS’) portal in XML format using the Operators ID granted at the time of registration.
Are there any penalties for non-compliance?
- Making an incorrect or incomplete return falls under Section 898O of the Tax Consolidation Act, which leaves the reporting platform operator liable to a penalty of €19,045 and a further penalty of €2,535 for each day the return stays outstanding.
- Revenue are already considering plans for enforcement, which, if compared with other pre-existing AEOI regimes would be robust and comprehensive. This, coupled with the cost of remediation means, it is critical to get a sustainable compliance program in place as early as possible.
How should I approach setting up a sustainable compliance program for DAC7?
- Determine how the organization is impacted by the regulations and the Member State(s) where it is required to report
- If you are required to report in more than one EU member state, one of which is Ireland, you should elect the Member State you wish to report to and inform Revenue in writing.
- Determine if there are reportable sellers as per the criteria laid out in the Tax Duty Manual: EU Reporting Obligations for Platform Operator
- Understand how considerations, fees and other payments should be reported
- Perform due diligence to assess validity and reliability of information
- Understand the NIL filing requirement (e.g., there are no reportable sellers in that period)
- Report the information to Revenue and obtain acceptance on those reports
- Implement internal control mechanisms to ensure compliance with collection, validation and follow ups on outstanding information from sellers
- Ensure the mechanisms in place are in line with GDPR requirements which include:
- Maintaining data records for the required period of 6 years
- Informing individual reportable sellers of how their information is going to be used
- Providing each reportable seller, that is an individual, all information that individual is entitled to in sufficient time for them to exercise data protection rights
How can EY help?
We understand the challenges that come with this regime – collecting the required information and ensuring its validity in an environment which is highly dynamic and turbulent, deals with high data volumes and significant process-reengineering costs. In practice ensuring annual report accuracy and agreeing on a centralised approach for enforcement and monitoring is not easy.
Our EY team draws its extensive experience from implementing projects like this from other automatic exchange of information regimes. Our team’s expertise can help provide you with lessons learned over a decade of practice that ensures you have:
- Detailed policies, procedures and controls to govern your processes, outline decisions with clear lines of accountability and remediation strategies to combat known process and data gaps.
- Support in alleviating the burden of report inaccuracy by conducting a full data review and cleanse to ensure the report being filed is as accurate and complete as reasonably possible.
- A team of experts that partner with you on your compliance needs, from the assisting with ad hoc queries to a fully outsourced end-to-end service from on-boarding to xml file submission.
Please visit DAC7 (revenue.ie) for more information on the DAC7 implementation as dictated by Irish Revenue.
We are ready to assist – please reach out to us with your questions.
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