On 9 December, a Tax Alert from Baker McKenzie reported that, on 21 November, EU Member States reached consensus on a proposal for the 7th Directive on Administrative Cooperation (DAC7). The updated Directive is a part of a package which was published by the European Commission earlier this year to promote fair and simple taxation. It is expected that DAC7 will be officially adopted on short notice. DAC7 aims to strengthen the existing framework for exchange of information and administrative cooperation, by providing a better flow of information with respect to taxpayers that generate income through digital platforms. It introduces an obligation for certain digital platforms to collect and report information to their local tax authority on income generated by certain sellers on those digital platforms; and this reporting obligation imposes an additional compliance burden for the digital platform companies in scope, as such companies will be confronted with an additional due diligence and reporting obligation. The Tax Alert also notes that preparations are already in motion for an eight Directive (“DAC8”) which will cover crypto assets.
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