DAC7 Directive. Vinted, OLX, Allegro sales taxed? Data will go to the tax office. Experts explain

Since July, an amendment to the Act on the exchange of tax information with other countries and certain other acts has been in force. This is an implementation of the EU DAC7 directive, which imposes on digital platforms obligation to report on sellers operating using these platforms. This data is to be later transferred to tax authorities.

The news about the introduction of the new regulations caused panic online. Some people who occasionally sell things on platforms, such as used clothes, started to worry whether they would soon receive a notice to pay tax or register business from the tax office.

However, as he assures us in his correspondence with the business section of tvn24.pl Ministry of Finance, “the implemented regulations do not introduce any changes to the rules for taxing the sale of private items used for at least 6 months.”

The Ministry adds that “the mere announcement of sale or a single transaction does not automatically initiate verification or inspection activities”. “KAS (National Revenue Administration – ed.) as a rule does not initiate analyses concerning people selling single items of used items via internet portals. Occasional sales, e.g. of children's clothes, are not the subject of interest of the tax office” – we read.

The reporting obligation does not cover all sellers on so-called platforms. marketplace, but only and exclusively those who meet certain conditions. More precisely, it is about sellers who 30 goods transactionsor whose income from this exceeded equivalent to 2 thousand euros within a year (at the current exchange rate PLN 8,559).

The data will reach tax offices in the form of aggregated, electronic information about the seller or sellers. “KAS will analyze the annual information provided by the platforms and compare it with the declared revenues,” the ministry explains.

Currently KAS does not intend to issue any special warnings to people trading on sales platforms who are suspected of conducting unregistered business. “Currently, KAS does not plan to send letters to sellers who are suspected of conducting business in the so-called grey zone,” we read.

The ministry itself admits that the entry into force of the regulations “may result in an increase in the number of registered business entities”. “However, we do not have any data or estimates in this regard” – the ministry representatives add.

In practice, the fact that our data will be transferred to the tax office does not mean that we will have to pay tax.

– We must distinguish between reporting obligations and the obligation to pay tax. This directive does not introduce new taxes for online traders, but introduces reporting obligations, these are obligations on the part of online platform operators. Platforms will report only and exclusively data of sellers, not buyers, this is also worth emphasizing – says Magdalena Jaworska, tax advisor, partner at the consulting firm Quidea, in an interview with the business section of tvn24.pl.

Konrad Turzyński from the Kolibski, Nikończyk, Dec and Partners law firm also tones down the mood. – A report alone does not equal tax. In my opinion, there will be a lot of information in these reports that at the end of the day the tax office will consider useless, because they will concern people who actually conduct this trade for private use and on a small scale – he claims.

– The tax authorities will have a very big problem and need to filter the data from the reports that are useful from those that are on the border of acceptable limits, and dealing with them would be, so to speak, a waste of time. I suspect that they will first deal with those taxpayers who have sales exceeding 20,30 thousand euros, and not smaller sellers – he emphasizes.

It also notes that the limits for unregistered activities are higher than the requirements of the aforementioned directive. Since July, the monthly income limit for which you do not need to start a business is PLN 3,225.

However, new regulations will force sellers to cooperate more with platforms. Those who fail to meet their obligations may even have their ability to sell blocked.

In an interview with tvn24.pl, Magdalena Jaworska admits that although the obligations related to the transfer of data are the responsibility of the platforms, they are nevertheless obliged to obtain it from the sellers. – Such a seller may be requested by the platform to provide this data, or possibly supplement it, so that the platforms can fulfill their obligations. If the seller does not provide the appropriate data to the platform, only then do the directive and the act implementing it provide for sanctions against the seller, such as blocking the account for settlements or blocking the possibility of selling on the platform – she says.

He emphasizes, however, that “a seller who cooperates with the platform will be able to continue selling without these negative consequences.”

The effects of the implementation of the directive, or at least those resulting in consequences such as penalties and proceedings, are unlikely to be seen this year.

Magdalena Jaworska emphasizes that “this is not real-time reporting”. – Our first reporting is quite unfortunate, because it covers not only the current year, but also transactions from 2023. The first reporting for the previous year and the current year will also be made next year. They will be sent to the office after the end of the annual reporting period, also after quite a long time from the sale transaction – explains the expert.

However, he points out that “we must remember that tax authorities can also verify settlements retroactively; as a rule, there is a 5-year tax limitation period, so the office still has time to analyze this data.”

– When the tax office receives this data, it must then develop it, then implement a certain procedure. There is no such practice that the tax office does something on an ongoing basis, rather it happens with a delay, smaller, larger. For example, the most current case that I am currently handling is from 2021, it concerns a completely different topic, but it illustrates how long the proceedings in the tax authorities last – comments Konrad Turzyński.

Even though the Act does not have such restrictive consequences for taxpayers as it might seem, it is always better to be prepared for a possible confrontation with a tax official.

– To be on the safe side, it is better to have evidence, documents indicating the type of sale conducted on the Internet. It is therefore worth having justification for the non-business activity conducted, where the goods came from, that they came from private use. They can be helpful in the event of a potential conversation with the tax office – says Magdalena Jaworska.

Konrad Turzyński, on the other hand, emphasizes that in the case of online transactions, the cost side may prove to be particularly problematic. – The tax authorities usually have such a method that they do not bother with details. If the taxpayer is unable to present the costs, the other side of running the business, the tax authorities determine that the taxpayer has not proven it, and treats this revenue side as the sole basis for determining the tax – he points out.

He adds that the revenue part will be automated, and the knowledge about costs is the only one that only we have. – This affects the tax that we pay, “upstream”, from income. This is key to determining the tax base – he says.

The main goal that guides the legislator is to fight the closet zone on the Internet. New regulations may make this task easier, but they will certainly not eliminate the phenomenon.

– These regulations are not a remedy for the entire grey zone. We also have marketplaces where only advertisements are posted, and the portal itself does not mediate in concluding transactions – Konrad Turzyński points out.

He adds that “such portals do not report advertisements in any way”. – So, unfortunately, there is certainly some scope here for people who dishonestly settle accounts with the tax office – he sums up.