The reporting obligations provided for by the "DAC 7" Directive (implemented in Articles 1649 ter A à 1649 ter E of the French Tax Code) will replace the French obligations (provided by Article 242 Bis of the French tax Code) as january 2024.
DAC 7 regulation is implementing an obligation to provide the Tax Authorities with the revenue generated by users of digital platforms.
Since 2019, the French Tax Code had already implemented a similar obligation under the former Article 242 bis of the French Tax Code.
These obligations imply a significant work from the platform operators in collecting and formatting the data transmitted and allowing French Tax Authorities to pre-fill the tax returns of the platforms users.
However, as of january 2024, the reporting obligations arising from the DAC 7 Directive will replace the previous obligations. These obligations will go further in the collection and transmission of data.
The major simplification point of this reform remains in the fact that only one single declaration will have to be filed in case where the platform operator is involved in many Members State (as opposed to one declaration per EU Member State under 242 bis of the FTC regulation).
Nevertheless, two points should be noted:
■ Firstly, information obligation derived from Article 242 bis 1 of the French Tax Authorities to make the users aware of their tax and social obligations will continue to apply;
■ Secondly, the scope of the obligations deriving from the DAC 7 Directive is different from the past obligation (under Article 242 Bis of the FTC) since:
(i) certain users which were not within the scope of the reporting obligations under Article 242 bis will be newly bound by the obligations arising from the DAC 7 Directive. Thus, French entity, which are leasing real estates in another EU Member State, are liable for this reporting obligation;
(ii) the data to be communicated will be extended in comparison with those provided for by the Article 242 Bis of the FTC (for example, the communication of the address of the real estates has to be provided);
We would recommend anticipating the implementation of this reform by realizing a modelisation of the operator/operations involved in order to determine to what extent (i) the platform operators will fall within the scope of this obligation and, if applicable, (ii) which users will be concerned by the data transmission obligations and, finally, (iii) which data should be communicated.
One significant and important innovative point of the DAC 7 regulation remain in the instauration of a real obligation of verification of the data communicated by the users which did not exist until now. This will increase the platform operators obligations regarding KYC verifications and data collection. Penalties will be applicable in case where these obligations are not met.
The transposition of DAC 7 regulations is in line with the set of tax obligations (but not only) recently put on the platform operators involving the platform operators to be “trusted third parties” for the French Tax Authorities.
Since 2019, KPMG Avocats has developed an expertise in data collection and declaration in accordance with the former article 242 bis. We used to assist the platform operators in the understanding of this regulation, the determination of their obligation and its practical implementation (IT parameterization to collect and transmit the data to the Tax Authorities).
KPMG Avocats is ready to assist the platform operators to implement this new regulation.