- Applicable as of Jan 1, 2023
- Certain digital platforms (EU and non-EU platform operators) are required to collect, verify and report sales data annually from their users who sell goods or provide certain services in the EU to the competent tax authorities.
- This new reporting obligation will require platforms to adjust their data collection processes to make sure they avail of all necessary reportable information and are able to disclose it to the tax authorities in a timely manner, otherwise DAC7 could have significant implications for platform operators as failure to comply can result in financial penalties.
- For reportable sellers it is important to be able to provide the platform with the relevant data (on time), the platform operator can close the seller’s account and prevents the seller from registering again on the platform
CBAM (Carbon Border Adjustment Mechanism)
- Reporting as of October 1, 2023, Tax due as of Jan 1, 2026
- The EU has introduced the Carbon Border Adjustment Mechanism (CBAM) as part of its goal to become climate neutral by 2050.
- CBAM aims to reduce greenhouse gas emissions by levying a carbon price on imports of certain goods, with the intention of equivalent carbon pricing on EU production. This will have a disruptive impact on companies trading in covered commodities and may become the new normal for global trade. Countries such as Canada, New Zealand, Australia, India, and the UK are already discussing CBAM.
- Companies importing CBAM goods into the EU must remain informed and evaluate the impact on their business activity, including cross-functional impacts on sourcing, supply chain, logistics, and sustainability initiatives.
- Reporting obligations begin on 1 October 2023, and businesses must acquire authorized CBAM declarant status by 1 January 2026.
- More products may become part of the expanded scope of CBAM, so EU importers should be prepared for reporting obligations.
CESOP (Central Electronic System of Payment information)
- Applicable as of Jan 1, 2023
- All EU Payment Service Providers (PSPs) will be required to record and report transactional data of cross-border payments. This includes banks, electronic money institutions and other regulated payment institutions.
- When implementing CESOP, companies must navigate between multiple stakeholders and their interests.
- If you provide payment services covered by PSD2, you need to start assessing the extent of the impact and form a proportionate, effective and timely response.
- Applicable as of Jan 1, 2026
- The Council of the European Union reached a political agreement on the compromise text for the Directive on administrative cooperation implementing the OECD’s rules on reporting for crypto assets and amendments to the Common Reporting Standard (CRS) during an Economic and Financial Affairs Council meeting.
- The Directive, or DAC8, introduces reporting requirements for crypto assets related to transactions carried out by EU resident clients of reporting crypto-asset service providers. It also extends the scope for exchanging advance cross-border rulings and introduces the possibility of exchanging information received under the DAC framework for non-tax-related purposes.
- The Directive is expected to be formally adopted in early June 2023, with Member States having until 31 December 2025 to transpose the main rules into national law.
- DAC8 builds on the provisions of the Regulation on Markets in Crypto-Assets (MiCA) and the Transfer of Funds Regulation (TFR), and it aligns closely with MiCA, using the same definitions for crypto-asset service providers, crypto-asset services, and crypto assets.
- Reporting crypto-asset service providers will either be entities registered under MiCA or entities that provide crypto-asset services under MiCA but are not required to register.
- The rules impose an obligation on the reporting crypto-asset service provider to collect and verify information on crypto-asset users in line with due diligence procedures and report to the relevant competent authority information on the crypto-asset users resident in the EU.
- The Library of VAT in the Digital Age (VIDA)
- Proposal: Possible implementation as of Jan 1, 2024 with Digital Reporting Requirements as of Jan 1, 2028
- ViDA Has 3 Pillars
- Digital Reporting Requirements (DRR): A move to real-time digital reporting based on e-invoicing for businesses that operate cross-border in the EU
- Updated VAT rules for passenger transport and short-term accommodation platforms
- The introduction of a single VAT registration across the EU
Reform of the EU customs legal framework
- Proposal, implementation as of 2028
- The European Commission has proposed reforms to the European Union’s (EU’s) customs regime, including the introduction of a single online data system.
- The changes aim to simplify customs obligations and processes and introduce EU-level risk management to better enforce EU standards.
- Ultimately, this should improve customs authorities’ ability to collect the customs and tax revenues that help finance budgets and public services.
- The proposals seek to cut down on fraud in the e-commerce sector, while introducing more transparency and peace of mind for consumers.
- One of the key pillars of the reforms is taking a more modern approach to e-commerce. The proposals include plans to:
- Make online marketplaces responsible for ensuring compliance with EU customs obligations
- Deem online marketplaces as importers to ensure customs duty and VAT is paid at the time of purchase
- Abolish duty exemption on goods valued under €150
