The European Commission has called on Germany, Hungary, Poland and Romania to fulfil their obligation to cooperate with other Member States on tax transparency of income realised through digital platforms.
It decided to open an infringement procedure by sending a letter of formal notice to the four countries for failing to exchange timely information on income earned by individuals and companies through the use of online platforms.
Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7) introduced, as of 1 January 2023, new tax transparency rules for transactions on digital platforms.
The statement said; "The objective is to better identify situations where tax should be paid. The reporting should happen at two stages. First, online platforms were obliged to collect the information about the income earned by individuals and companies throughout 2023 and report it to the Member State of the platform.
"Then, that Member State had to exchange that information by 29 February 2024. The timely reporting and exchange is essential for ensuring a level playing field in the Union and the smooth functioning of DAC7 across all Member States. Germany, Hungary, Poland and Romania have failed to fulfil their obligation in exchanging the necessary information with tax authorities of other Member States which hinders them to enforce local tax laws."
The EC further said it had therefore sent a letter of formal notice to Germany, Hungary, Poland and Romania, who now have two months to respond and address the shortcomings. In the absence of a satisfactory response by the Member States, the EC said it may decide to issue a reasoned opinion.
