The DAC 7 Directive (Directive on Administrative Cooperation) was introduced at the European Union level as a further step in the fight against tax evasion and in increasing transparency in the digital market. This directive extends the scope of automatic exchange of tax information between EU Member States, imposing reporting obligations on digital platforms that facilitate the sale of goods and services. The aim is to reduce the grey economy and prevent users of such platforms from concealing income.
Scope of DAC 7
The obligations arising from DAC 7 are intended to cover a broad range of activities on digital platforms. In particular, this applies to:
- E-commerce platforms, such as auction portals where users can sell goods.
- Short-term property rental services, including platforms that mediate the rental of flats and holiday homes.
- Personal and freelance services, such as graphic design, consulting, or online tutoring.
- Platforms facilitating the rental of transport, such as car, bicycle or scooter hire.
DAC 7 Reporting Obligations
- Digital platforms operating in the EU – they must implement procedures for identifying and reporting users’ income that may be subject to taxation.
- Transactions of users earning income – platform operators are obliged to monitor and report data on their users’ earnings.
- Exchange of information between EU Member States – all Member States are required to share the data collected by platforms to prevent tax evasion in other jurisdictions.
Sanctions for Breach of DAC 7 Reporting Obligations
In Poland, failure to comply with DAC 7 obligations may result in fiscal criminal sanctions. For the first year of implementation (2023), a more lenient approach to penalties has been adopted due to the novelty of the obligation. However, in future years, penalties for serious and repeated breaches may be significant.
Fiscal Penal Code (FPC) – Article 80cb and Sanctions of up to 180 Daily Rates
The newly introduced Article 80cb of the FPC directly penalises the failure to fulfil DAC 7 reporting obligations. This means that a person acting on behalf of, or in the interest of, a platform operator who fails to meet any of the obligations listed in Article 80cb § 1 of the FPC may be fined up to 180 daily rates – potentially up to PLN 10,319,760.
These obligations include, among others:
- Applying due diligence procedures and collecting the required documentation,
- Submitting information on sellers to the Head of the National Revenue Administration,
- Registering once in Poland if the non-EU operator has not registered in another Member State,
- Rectifying any irregularities identified during an inspection.
Minor Offence – Fiscal Misdemeanour
Article 80cb § 2 of the FPC provides for a more lenient classification in cases of a so-called “minor offence,” where the penalty is limited to a fine for a fiscal misdemeanour.
- Minimum fine: PLN 430
- Maximum fine: PLN 86,000
A “minor offence” refers to a prohibited act which, due to specific circumstances, is considered to have a low degree of social harm – for example, when the public-law receivable reduced or at risk of reduction does not exceed five times the minimum wage.
2023 as a “Grace Period”
DAC 7 provisions were formally implemented in Poland in September 2023, meaning that digital platform operators had very limited time to adapt their systems to the new reporting requirements. In practice, this meant that for most of 2023, platforms had no legal basis to collect the required data, which made it difficult to fully meet their reporting obligations for that year.
The Ministry of Finance expressed a flexible approach during the first year of implementation. It announced that fiscal criminal sanctions for non-compliance with 2023 reporting obligations would not be applied if platform operators could demonstrate due effort in collecting data, despite the lack of proper legal grounds at the beginning of the year. However, operators must be able to prove that their failure resulted from legislative delays, not from their own negligence.
Polish tax authorities have accepted that in the first year of applying DAC 7, i.e. in 2023, fiscal criminal liability will not be enforced against individuals who fail to fulfil their obligations under Article 80cb of the FPC. This decision aims to allow entities time to adjust to the new reporting requirements. However, it should be noted that after 2023, the tax authorities may change their approach and introduce stricter penalties for non-compliance.
The DAC 7 provisions impose new obligations on digital platform operators, and failure to comply may have serious consequences. Although a “grace period” without fiscal criminal liability was provided for 2023, from 2024 onwards, the tax authorities have tightened their approach and may impose severe sanctions.