The Italian Government has approved the Legislative Decree no. 32/2023 (hereinafter the “Decree”), implementing the European Directive 2011/16/EU (hereinafter "DAC 7"); the mandatory Italian disclosure obligation is underway.
In general terms, the DAC 7 aims at collecting the data and information related to the transactions carried out on the digital platforms, which allow economic operators to offer their services in exchange for payment. Some exceptions are still detectable.
Right below is a recap of the regulation under analysis:
- Fulfilment - The platform administrator
established in a EU State has to collect, for the purposes of DAC7,
the data of a seller (i.e. a person offering services through the
platform) resident in another EU State, and then provide the
Financial Administration of the home country with those data
(electronic filing needed). The data are then transferred to the
Tax Administration of the State of residence/domicile of the
seller. For the property rental services, the data of the
intermediated activity is also transmitted to the Administration of
the State in which the property is located.
- Obliged Entities - All digital platform
operators that are not considered excluded (see below), in addition
to the s.c. FPO (Foreign Platform Operator); an FPO is a platform
operator that is (i) not resident for taxation purposes,
(ii) nor is it established or managed in a Member State,
(iii) nor does it have a permanent establishment in a
Member State, but which facilitates the execution of a relevant
activity by sellers, obliged to communicate, or facilitate the
execution of a relevant activity involving the rental of real
estate property located in a Member State, provided it is not
qualified platform operators outside the EU.
- Excluded Sellers - The implementing Decree establishes that the platform operator must carry out an appropriate verification activity to identify the so-called "excluded sellers", who should not be monitored. This mainly refers to (i) companies for which the platform has brokered more than 2,000 leases or (ii) for which the platform has brokered less than 30 transactions, for which the fees do not exceed 2,000 euros.
- Not Excluded Sellers - For
not-excluded sellers, the platform administrator must acquire
personal data (name, surname, tax code or equivalent
number and VAT number, if it is natural person; and company name,
address, tax code, VAT number, as well as tax identification
number, if the seller is a company); the platform
operator may use the information and documents
available for their own
archives, together with those available at EU
databases for the control of tax identification
numbers (for example, VIES). Should the
administrators find inaccuracies, they can require the seller to
provide supporting information, such as identification
documents or a tax residence certificate. In addition
to this, it is necessary to acquire the data of the transactions
intermediated by the platform during the year under
analysis.
- Territoriality - For the purposes of
"territoriality", the seller is deemed to be
resident in the State where their head office is located.
However, if the seller has a tax code set on another
State, it is also considered resident in that second
State.
- Deadline - Due diligence procedures must
be carried out before December 31 of each reporting
year. Subsequently, the operators have to
file the data to the Tax Agency within the following
month, while the Tax Agency shares the data with the other
interested Administrations within the following two months (i.e.
before February 29, 2024 for the 2023 data).
Interim rules - The administrator of the platform with the obligation to communicate carries out the procedures of adequate verification regarding tax matters before December 31 of the second period subject to communication, for sellers already registered before the effective date of this decree or on the date on which an entity has become, for the first time, a platform operator with a reporting obligation.
- Member State Selection - Platform
operators who are obliged and qualified in at least more than one
Member State must inform the Tax Agency about which EU State they
intend to comply their reporting obligation. For the purposes of
exercising the choice under scope, the platform administrators
subject to the DAC7 obligations shall use the electronic services
provided by the Tax Agency, disclosing the following:
- Legal name;
- tax code;
- EU States of residence, that is, any other EU States where:
- the platform is legally bound, established or regulated, or
- the legal office is located, including the place of effective management, or
- the permanent establishment is located.
- (If apllicable) the NIF of the EU States referred to in the previous point;
- Tax domicile as per art. 58 of the Presidential Decree No. 600/1973;
- EU State chosen to fulfil its reporting obligation;
- Statement attesting to have shared the choice as per the
previous point made to the Competent Authorities of the EU
State
The choice referred to in the previous point shall be notified before January 31st of the calendar year following to the year in which the communication refers.
- Data to be communicated – Platform operators are obliged to provide the following information:
- The tax code, or IIN, of the entity making the communication;
- The electronic address of the entity making the communication;
- The information referred to in article 11, paragraph 1, of the Decree. For this purpose, the additional definitions contained in the Decree shall apply.
- (if applicable) the Italian tax code of the sellers, obliged to communicate to whom the information according to point c) above are referred.
- Terms - Platforms will transmit the
information related to the reporting period by January
31st of the calendar year following to the year to
which the communication refers. The first information must be
communicated before January 31st, 2024.
- Communication Methods - The operators
transmit the information required by the Decree through the
electronic services of the Tax Agency according to the XML format
described in the annex of the provision no. 1 “XML Path and
XSD Schema”.
- Multiple Obligated Operators - when
there are several platform operators with the obligation to
communicate the same information, each of them will be exempt from
this obligation if he can prove that the data have been provided by
another platform operator subject to the same obligation. In such
cases, the exempt operator files a “Communication of absence
of data to be communicated” with the same rules as above,
sharing at least the following information related to the platform
operator who undertook the obligation of filing:
- Member State of residence, as is defined on the point 1.1, letter d);
- NIF;
- Name/denomination;
- Address
The platform operators assuming the reporting obligation on behalf of others must communicate, for each platform operator for which they assume such obligation, the information referred to in letters a) to d) of the previous point.
- Obligations of excluded operators - In
order to prove that its business model allows the platform
administrator to be excluded from the reporting obligation, the
excluded platforms operators are obligated to communicate the
following information, using the electronic services of the Tax
Agency:
- Legal Name;
- Tax Code;
- Member State of residence;
- Tax domicile as per art. 58 of the Presidential Decree No 600/1973;
- Electronic address, including the websites;
- Statement attesting the cause of exclusion;
- Fiscal yaer when the exclusion clause ia applicable
The excluded platform operator must carry out these procedures for the fiscal year between January 1st and 31st of the calendar year following to the year in which the communication refers.
- Obligations for FPOs – FPOs
without the credentials to access the Tax Agency's webpages,
can apply for the credentials through an online procedure on the
institutional Tax Office website, selecting the field
“DAC7” and completing the form available in the free
access section, available in English.
The Pescara Operations Center (POC) after the due checks, communicates to the applicant via email the ID code for access to the telematic services of the Tax Agency, the first access password and the first 4 PIN code digits, along with instructions in English on how to obtain the second part of the PIN and complete the registration process.
The FPOs already registered and in possession of the credentials for the "OSS non-Union scheme”, can apply for the authorization to use the same credentials also for the DAC7 purposes in their private area of the Tax Agency's webpage. The POC will process the application and provide a feedback to the applicants.
The FPOs, in possession of the credentials referred to in points 5.1. or 5.3., together with their start of activity as a platform administrator, shall register in their area of the Tax Agency's website, communicating the following information:
- Legal Name;
- Postal address;
- Electronic address, included websites;
- Eventually, the NIF issued to the platform administrator subject to the reporting obligation;
- Statement containing information relating to the identification of the platform operator subject to the reporting obligation for VAT purposes in the European Union, in accordance with Title XII, Chapter 6, Sections 2 and 3 of Directive 2006/112/EC of the Council of November 28, 2006;
- EU States of residence of the seller subject to communication, according to article 5 of the Decree;
- Statement according to article 47 of Presidential Decree No 445/2000, certifying that the platform operator has not been subjected to registration revocation by Competent Authorities of the Member States under Annex V, Section IV, Part F, point 7, Council Directive 2011/16/EU of 15 February 2011.
At the end of the registration procedure, the FPO will be
assigned an IIN, as defined in point 1.1. letter h).
The Tax Agency communicates the information referred on the
previous points to the Secure Central Register provided by article
8ac, paragraph 5, of DAC7.
The Tax Agency requests the cancellation of the FPO from the
Central Secure Register in the following cases:
- The FPO, using the telematic services of the Tax Agency, informs that it no longer carries out the activities qualifying it as such;
- In the absence of the communication referred to in letter a), the POC has sufficient elements to believe that the FPO has ceased its activity;
- The FPO no longer meets the conditions to be considered non-qualified outside the EU according with this provision;
- In case of revocation.
In case of revocation, the FPO may apply to the POC for being registered again by providing adequate guarantees on the compliance with the DAC7 obligations, including any residual unfulfilled reporting obligations. The POC, after carrying out the appropriate verifications, will evaluate the granting of this authorization, informing the FPO of its decision.
- Penalties - Failure to communicate the information requested to the Tax Agency is punishable by the penalties provided for in art. 10 paragraph 1 of the Legislative Decree No 471/97, increased by half, so the fine goes from a minimum of 3,000 Euros to a maximum of 31,500 Euros. If the information is provided incompletely or incorrectly, the "basic" fine is reduced by half, and therefore ranges from 1,000 euros to 10,500 euros\
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.