Marketplaces’ tax obligations in Spain: implementation of DAC 7

Tax obligations of marketplaces in Spain | Metricson

The transposition of EU Directive 2021/514, known as DAC 7, is a reality. The General Tax Law has recently incorporated the obligation to exchange tax information between EU countries, obtained through digital platform operators.

The directive regulates the exchange of information between the tax administrations of the EU Member States, for which the platforms are required to previously inform the administration with which they are registered of the income obtained by sellers through digital platforms.

New reporting obligation and penalty regime

The Spanish regulation introduces a new reporting obligation for digital platform operators and, in turn, regulates a strict penalty regime.

The affected operators will have to assess whether they comply with the requirements of DAC 7, considering the type of sellers and the activities subject to reporting.

International cooperation and multilateral agreement

In addition to the transposition of DAC 7, the regulation reinforces international cooperation between tax authorities, incorporating the OECD Multilateral Agreement for the automatic exchange of information on income obtained through digital platforms. This agreement, already signed by Spain, is in line with the global trend of strengthening the taxation of the digital economy.

Among the activities subject to reporting, referred to by the Directive as ‘relevant activities’, are the following:

  1. The letting of immovable property, including residential and commercial real estate and any other type of immovable property, as well as parking spaces.
  2. personal services
  3. the sale of ‘goods
  4. The leasing of any means of transport.

Requirements to be considered as relevant activities:

  • Independence: Activities carried out by a seller who is an employee of the platform operator or by an entity linked to the operator are not included. Tying is established when one entity controls another or both are under common control.
  • Online contracting with relevant offline activities:
    • Online: Private tutoring, data entry or copywriting.
    • Includes offline physical services such as transport and delivery, cleaning, gardening or renovation work.
  • Profit-making by the seller.

Joint inspections and simultaneous control

The law regulates so-called ‘joint inspections’ at European level, allowing Spanish officials to carry out inspections in other Member States and vice versa. A framework for these inspections is established, defining the necessary procedures and coordination between the tax authorities of the participating countries.

Obligations and exemptions for digital platform operators

Digital platform operators must comply with rules and procedures for obtaining information from sellers, registering in the census and providing information to the tax administration. Some operators are exempt from the reporting obligation, such as those who demonstrate that the information has already been reported by other operators or those considered ‘qualified platform operators outside the EU’.

Having said all this, what is considered a platform?

Any software, including websites or parts thereof and applications, including mobile applications, which is accessible to users and which enables sellers to contact other users to carry out a ‘relevant activity’, directly or indirectly, for those users. It also includes any form of collection and payment of ‘consideration’ in respect of the ‘relevant activity’.

The definition of ‘platform’ excludes software which, without requiring additional interventions to perform the ‘relevant activity’, only enables one of the following operations.

And ‘vendor’?

Refers to the individual or ‘entity’ that, at any time during the ‘reference period,’ is registered on the platform and carries out the ‘relevant activity.’

Clarifications:

  • Sellers can be both individuals and entities.
  • The term ‘entity’ refers to a legal entity, such as a corporation, partnership, trust or foundation.
  • The term ‘registered’ is to be understood in a broad sense and includes situations where a user has created a profile or account on the platform, as well as where they have entered into a contractual relationship with the platform operator.

Method of registration:

  • Submission of form 040 electronically by 31 December 2023.
  • Non-EU operators receive an identification number.

Information collection obligations:

  • Information on sellers: Identification details, address, VAT number, date of birth (if natural person), company registration number (if legal person), and other details.
  • Property information: Address, cadastral registration number, and documentation for large landlords.

Due diligence obligations:

  • Verification of seller and residence information.
  • Use of available information and electronic services to validate data.
  • Timing and Validity of Due Diligence Procedures:

Compliance by 31 December of the reportable period.

Exceptions for sellers registered before 1 January 2023 and new platform operators.

Reporting obligations:

  1. Information on the platform: Operator identification data.
  2. Seller information: Reportable data, consideration, commission, etc.
  3. Information on property rental.
  4. Retention obligations and deadlines:

Retention of documents for 10 years.

Entry into force and reporting deadlines:

Entered into force on 1 January 2023.

First reporting deadline: 31 January 2024 (over 2023).

Diligence on pre-existing sellers before 31 December 2024 by filing AEAT Form 238 (Information return for the communication of information by platform operators).

Conclusions and future prospects

The transposition of CAD 7 marks a milestone in the taxation of digital platforms, strengthening international cooperation and establishing a solid basis for the exchange of tax information. In addition, the legislation anticipates future changes in the digital environment, laying the groundwork for further adaptations in the future. Digital platforms must prepare themselves to meet these new obligations and contribute to tax compliance in an increasingly digitalised environment.

 

José Pérez-FusterArticle by:

José Pérez-Fuster

Senior tax manager

jose.perezfuster@metricson.com

 

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