How Digital Platform Operators can automate the processes related to DAC7 requirements

Impact of DAC7 on marketplaces

The EU's Directive on Administrative Cooperation in the field of taxation (DAC7) is a significant development for Digital Platform Operators (DPOs) that make their platforms available to sellers. The Directive, which was adopted in 2017 and entered into force on January 1, 2018, introduces new reporting obligations that are designed to increase tax transparency in the digital economy. Under DAC7, DPOs are required to identify, trace, and report on revenues made by sellers on their digital platforms, in order to help member states enforce their tax laws and reduce tax evasion and avoidance.


DPOs that are subject to DAC7 will need to design and implement seller due diligence procedures and the required reporting infrastructure in preparation for the first reporting deadline. This can be a complex and time-consuming process, especially for larger DPOs with a large number of sellers. However, there are several ways in which DPOs can automate these processes to improve efficiency and reduce the risk of errors or omissions.


One approach is to use software or other automated systems to identify sellers who meet the criteria for reporting under DAC7, and to track their revenues and other relevant data. This can help DPOs to ensure that they are complying with their reporting obligations, and to respond quickly to any changes in circumstances that might affect their reporting requirements.


Another approach is to use automated systems to prepare and submit DAC7 reports. By using software to compile the necessary data and generate the reports, DPOs can reduce the time and effort required to meet their reporting obligations. In addition, using automated systems can help to ensure that reports are accurate and complete, reducing the risk of errors or omissions.

DPOs can also use technology to facilitate the exchange of information with other member states. By using APIs (Application Programming Interfaces) or other secure systems, DPOs can transmit the required data in a timely and reliable manner, helping to ensure that member states have the information they need to enforce their tax laws.


It is important for DPOs to be aware of their DAC7 obligations, and to start preparing for the first reporting deadline as soon as possible. By investing in automation and technology, DPOs can streamline their compliance efforts and reduce the risk of errors or omissions. This will not only help DPOs to meet their DAC7 obligations, but also to operate more effectively in the digital economy.

In addition to the reporting obligations introduced by DAC7, there are also several other measures that DPOs should be aware of, including requirements for country-by-country reporting and reportable cross-border arrangements. DPOs that are subject to these requirements will need to take steps to ensure that they are in compliance, in order to avoid potential penalties and other consequences.


Overall, DAC7 represents a significant development for DPOs, and it is important for these businesses to understand their obligations and take steps to ensure that they are in compliance. By investing in automation and technology, DPOs can streamline their compliance efforts and reduce the risk of errors or omissions, helping them to operate more effectively in the digital economy.


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There are several ways in which Digital Platform Operators (DPO) can automate the processes related to DAC7 requirements. Some potential approaches include:


  1. Automating the identification and tracking of Reportable Sellers: DPOs can use software or other automated systems to identify sellers who meet the criteria for reporting under DAC7, and track their revenues and other relevant data.

  2. Automating the preparation and submission of reports: DPOs can use automated systems to compile the necessary data for DAC7 reports, and to generate and submit the reports to the relevant Competent Authority.

  3. Implementing seller due diligence procedures: DPOs can use automated systems to perform seller due diligence, including verifying the tax residency of sellers and monitoring for relevant changes in circumstances.

  4. Using technology to facilitate data exchange: DPOs can use technology such as APIs (Application Programming Interfaces) or other secure systems to facilitate the exchange of information with other member states.


By automating these processes, DPOs can improve the efficiency and accuracy of their DAC7 compliance efforts, while also reducing the risk of errors or omissions.


Reach out to Kohomai. We are a no-code OS for automated operations. 

Here’s what we offer company formation providers and company owners:

We are dedicated to helping marketplaces and managing their operations of their suppliers in boosting productivity and automating manual & admin repetitive tasks for your team or company. That means you’ll have more time to focus on the most important part, the happiness of your customers and team!

Get a free 14-day trial from one of our plans! - give us a try!

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