Important Updates in Relation to DAC7

22/01/2024

Following the implementation of EU Council Directive 2021/514 (DAC7), which amended Directive 2011/16 on administrative cooperation in the field of taxation (DAC), in to local legislation (the “Law”), Platform Operators have the obligation to register with the Cyprus Tax Department (CTD), collect data on the sellers using their platforms and submit it to the CTD.

On 22 December 2023, the CTD published a guide for taxpayers regarding the registration and submission of data in relation to DAC7.

Obligations of Platform Operators

The Law provides for automatic reporting of data by the Platform Operators, as these are defined in the Law. However, they only have to collect information on specific categories of sales, known as relevant activities. Those activities are:

• renting of immovable property;
• personal services;
• sale of goods; and
• rental of any mode of transport.

 Platform Operators have the following obligations:

• Register with the CTD or submit a notification if they are already registered in another EU Member State.
• Carry out specific due diligence procedures and report to the CTD specific information on the Sellers as foreseen in the Law.

Failure to perform the prescribed due diligence and reporting obligations may amount to monetary penalties.

Platform Operators who can justify that as per their business model no reportable sellers perform any relevant activities through their platforms, should be considered as excluded Platform Operators.

Through an announcement issued on 15 January 2024, the CTD clarified that sellers resident in Cyprus for tax purposes also fall within the scope of DAC7 reporting.

Furthermore, on 17 January 2024 the CTD announced an extension to the DAC7 reporting deadline for 2023 to 16 February 2024.