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:
  1. The tax code, or IIN, of the entity making the communication; 
  2. The electronic address of the entity making the communication;
  3. The information referred to in article 11, paragraph 1, of the Decree. For this purpose, the additional definitions contained in the Decree shall apply.
  4. (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:
  1. Legal Name;
  2. Postal address;
  3. Electronic address, included websites;
  4. Eventually, the NIF issued to the platform administrator subject to the reporting obligation;
  5. 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;
  6. EU States of residence of the seller subject to communication, according to article 5 of the Decree;
  7. 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:

  1. The FPO, using the telematic services of the Tax Agency, informs that it no longer carries out the activities qualifying it as such;
  2. 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;
  3. The FPO no longer meets the conditions to be considered non-qualified outside the EU according with this provision;
  4. 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.