EU Member States adopt new taxation rules to tackle lost fiscal revenues of sales generated through digital platforms

On 22 March, the Council adopted amendments to the directive on administrative cooperation in the field of taxation in order to address Member States’ loss tax revenue through digital platforms selling goods or providing service and the unfair advantage this creates traditional businesses.

The amendments aim to ensure that the income earned through digital platforms gets reported and that due taxes are paid, in particular when digital platforms operate across several countries, creating an obligation for digital platform operators to report the income earned by sellers on their platforms and for member states to automatically exchange this information. The new rules cover digital platforms located both inside and outside the EU and will apply from 1 January 2023 onwards. They will allow national tax authorities to detect income earned through digital platforms and determine the relevant tax obligations. Compliance will also become easier for operators of digital platforms as reporting will only take place in one member state in accordance with a common EU framework.