- The Directive on Administrative Cooperation (DAC7) has introduced new compliance requirements for tax teams, extending tax reporting obligations to digital platforms in the European Union (EU).
- DAC7 aims to enhance transparency, combat tax evasion, and ensure fair taxation of income generated through the digital economy.
- Digital marketplaces are required to collect extensive data from sellers, including VAT numbers, tax residence, and financial account information.
- Digital marketplaces must verify the accuracy and authenticity of the collected information and report it to tax authorities annually.
- Valid VAT numbers play a crucial role in ensuring accurate tax reporting, preventing tax evasion, and facilitating cross-border transactions within the EU.
Source Innovate Tax
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