Sharing and Gig Economy – EU aims to enhance the cooperation and the Automatic Exchange of Information

Prepared by: Marco Lio, Angela di Gennaro, Francesco Canova

The last July 15th, the European Commission has adopted the Proposal for a Council Directive COM(2020)314 final (i.e. DAC7) in order to ensure new modifications to Directive 2011/16/EU on the automatic exchange of information in tax matters within the European Union. After the publication of the proposed legislation, and with specific reference to the Italian scenario, the Italian Ministry of Economy and Finance – Department of Finance has issued a public consultation for involving potential stakeholders to contributes on the topic within September 15th, 2020.

The so-called DAC7 is part of a broad package of tax measures included in the Tax Package drafted for harmonizing the European taxation system to make it fairer and more efficient.

In the international framework of the automatic exchange of information, the major update introduced by DAC7 refers to online platform operators that should report information to the relevant Member State’s Tax Administration on those business players which use their platforms to sell their goods and provide their services to final users.

The reference context

Consistently with the rational and the contents included in the “Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy” (i.e. MRDP) published OECD the last July 3rd 2020, the DAC7 aims also to regulate the reporting performed by online platform operators to the Tax Administrations of the correspondent Member States on the revenues realized by those operators that offer particular services or sell good through the digital platform itself.

Actually, the development of new business models based on the digitalization of the economy has posed new challenges on the Tax Authorities of the Member States, that should be engaged in ensuring adequate level of tax revenues within a more sustainable taxation system in the European Union.

Considering the aforementioned reasons, the European Institutions have broadened the scope of the automatic exchange of information among the Tax Authorities of the Member States to ensure that each taxpayer operating in the digital economy provide consistent declaration of income and pay an adequate amount of income tax.

The scope of DAC7

The proposed legislation published by the European Commission addresses Platform Operators that are resident for tax purposes in a Member State, are incorporated under the laws of a Member State, have their place of management in a Member State, have a permanent establishment in a Member State, or, that facilitates the carrying out of a Relevant Activity.

Through a due diligence process, whose details are enclosed in the Directive Proposal, the Reporting Platform Operators are required to identify Reportable Sellers, both individuals and entities, that are registered with or operate through the digital platform, that:

  • Are resident in a Member State, or that have rented out an immovable property located in a Member State, and that
  • Have been paid or credited of a Consideration connected with the performance of a Relevant Activity.

The Directive Proposal widens the categories of Relevant Activities carried out by sellers through digital platforms compared to the scope identified by the OECD within the Model Rules.

More in details, the type of services included within the Relevant Activities are:

  1. Rental of immovable property – This category includes both residential and commercial property, both residential and commercial properties;
  2. Personal service – Services involving time or task-based work, performed both online and offline. For example, this category includes tutoring, copywriting;
  3. Sale of goods;
  4. Rental of any mode of transportation; and
  5. Crowd-based financing.

After the due diligence procedures, each Reporting Platform Operator is required to report to the Tax Authority of its Member State the information on each Reportable Seller, the service provided and the consideration received, within January 31st of the year following the Reportable Period.

The relevant information related to each Reportable Seller would be automatically exchanged among the Tax Authorities of each Member State in which the Sellers are tax resident, or in which the immovable property is located. The reported relevant information includes also the full name or the legal name, the primary address, the Financial Account Identifier, Tin issued or VAT identification number, the number of Relevant Activities provided and the corresponding Consideration, together with any fees, commissions or taxes withheld or charged by the Reporting Platform.

With particular reference to the rental of immovable property, the proposed legislation requires to report also the address of each located property together with the respective land registration number and, where available, the number of days each property was rented during the Reportable Period together with the type of property.

The application of DAC7

On the basis of the modification included in the Directive Proposal, the legislative provisions related to digital platforms should apply starting from the January 1st, 2022. This due date suggest the requirement for Member States to implement DAC7 within December 31st, 2021.

Executive summary

Let’s Talk

For a deeper discussion please contact:

Marco Lio

PwC TLS Avvocati e Commercialisti


Davide Rotondo

PwC TLS Avvocati e Commercialisti


Andrea Ruffo

PwC TLS Avvocati e Commercialisti


Angel di Gennaro

PwC TLS Avvocati e Commercialisti

Senior Manager