DAC7 Explained: Marketplaces Reporting Seller Income
If you sell on an online marketplace in the EU, the platform now tells the tax authorities how much you earned there. That is DAC7, an EU directive on platform reporting that took effect in 2023. This explainer covers what gets reported, who is excluded, what the platform will ask you for and how to keep your own records in line. It is general information, not tax advice, so check the details with your national tax authority or a qualified adviser.
Key takeaways
- Since 1 January 2023, digital platform operators in the EU must collect information about their sellers and report it to tax authorities every year.
- Sellers of goods with fewer than 30 sales and €2,000 or less in the year on a platform are excluded. There is no such threshold for services or rentals.
- You must give the platform your tax ID, address and other details, and platforms can suspend sellers who do not.
- DAC7 does not create a new tax. It makes income you should already be declaring visible, so your own records need to match the platform's.
For years, many people sold on marketplaces without thinking much about tax. A few items here, a side hustle there, and the platform paid out to a bank account with no questions asked. Tax authorities knew this income existed but had no easy way to see it.
DAC7 changed that. It requires platforms to act as a source of information, much as banks and employers already are. If you run a small online shop on Etsy, eBay, Vinted, Amazon or a regional marketplace, it is worth understanding what the platform now reports and how to make sure the numbers line up with what you declare.
What DAC7 is
DAC7 is the common name for Council Directive (EU) 2021/514, the seventh amendment to the EU's Directive on Administrative Cooperation in tax matters. The earlier amendments dealt with things like bank accounts and cross-border tax arrangements. The seventh one is about digital platforms.
Under DAC7, platform operators collect information about sellers who use their platform, verify it and send an annual report to the tax authority of an EU member state. That authority then shares the information with the countries where the sellers are resident. The first reports, covering 2023, were due by 31 January 2024. Reports for later years follow the same annual pattern.
Which activities are covered
DAC7 is not only about selling goods. The reportable activities include:
- Sale of goods, such as items sold on a general marketplace or a second-hand fashion app.
- Personal services, such as freelance work, deliveries or tasks arranged through a platform.
- Rental of immovable property, such as short-term holiday lets.
- Rental of means of transport, such as renting out a car.
This article focuses on sellers of goods, which is where most small online shops sit. If you also offer services or rentals through a platform, the rules on thresholds work differently, as explained below.
Who is excluded: the de minimis threshold
To avoid burying tax authorities in reports about people clearing out a wardrobe, DAC7 includes an exclusion for small sellers of goods. A seller of goods is excluded from reporting by a platform if, during the year, they had fewer than 30 sales of goods and received €2,000 or less in total consideration on that platform.
Three details matter here:
- Both conditions must be met to be excluded. If you make 30 or more sales, you are reportable even if the total is small. If you earn more than €2,000, you are reportable even with only a handful of sales.
- It is counted per platform. Each platform applies the test to your activity on that platform only. Selling on three marketplaces means three separate tests.
- It applies only to goods. There is no equivalent exclusion for personal services or rentals, so a single paid task or booking can be reportable.
Common mistake
Treating the DAC7 threshold as a tax-free allowance. It only decides whether a platform reports you. It says nothing about whether your income is taxable. Tax rules depend on your country and your situation, and income below the reporting threshold can still need to be declared, especially if you are running a business rather than selling personal belongings.
What platforms report about you
For each reportable seller, the platform collects and reports a set of identifying and financial details. The exact fields depend on whether you are an individual or an entity, but for a typical small seller they include:
| Category | Typical information |
|---|---|
| Identity | Name, or legal name for a business; date of birth for individuals |
| Address | Primary address, and the country of residence it points to |
| Tax details | Tax identification number (TIN) and, where you have one, your VAT number; business registration number for entities |
| Payments | Financial account identifier, such as the bank account the platform pays you into |
| Activity | Total consideration paid or credited to you, number of activities, and fees, commissions or taxes withheld by the platform, broken down by quarter |
The platform reports this to a tax authority, which passes it on to your country of residence. In practice, your tax office may end up with a fairly clear picture of your marketplace turnover, period by period.
Platforms can suspend you
Platforms are required to collect this information, and DAC7 gives them a reason to be strict about it. If you do not provide the requested details after reminders, the platform can suspend your account or withhold payouts until you do. If a marketplace asks you to confirm your tax ID or address, treat it as an important request, not optional admin.
What you need to do as a seller
DAC7 puts the reporting duty on the platform, not on you. Your job is to supply correct information and make sure your own tax filings match what the platform reports.
- Respond to data requests. Log in to each marketplace you use and check whether it has asked for your tax ID, date of birth, address or business details. Fill in anything missing.
- Use consistent details. Give every platform the same legal name, address and tax number that your tax authority knows. Mismatches can trigger questions.
- Download the platform's statement. Many platforms give sellers a copy of the information they reported, often early in the year. Save it with your tax records.
- Reconcile with your books. Compare the platform's total consideration with the sales you recorded for the same period. Note any differences and the reason, such as refunds or timing.
- Declare your income correctly. Report your marketplace income in your tax return according to your country's rules, using your own records as the base.
- Get advice if something looks wrong. If the reported figures are wrong, contact the platform. If you have under-declared in the past, speak to an adviser about how to put it right.
Pro tip
Platform figures are usually gross: the total paid or credited to you before you deduct your own costs. Your tax return is often based on profit after costs. Keep a simple reconciliation sheet showing gross platform consideration, platform fees, refunds and your other costs, so you can explain the gap between the platform's number and your taxable profit in seconds.
Example
Imagine a seller who makes handmade candles and sells on two marketplaces. On the first, she makes 45 sales worth a made-up total of €1,600. On the second, she makes 12 sales worth €2,400. She is reportable on both platforms: on the first because she reached 30 sales, on the second because she passed €2,000. Each platform sends its own report. At year end she downloads both statements, adds them up and checks that the total matches the marketplace income in her bookkeeping, before declaring her profit in her tax return.
DAC7 for sellers outside the EU and in the UK
DAC7 applies to platforms operating in the EU and to sellers who are resident in the EU or who rent out property located in the EU. If you live outside the EU and sell goods to EU customers through a marketplace, your situation depends on where you are resident and which reporting rules apply there.
The UK is no longer part of DAC7, but it applies similar platform reporting rules based on the OECD's model rules, from 1 January 2024. UK platforms report seller information to HMRC, and HMRC exchanges information with other countries that have signed up to the same framework. Other countries outside the EU have adopted or are considering similar rules.
The practical result is the same almost everywhere: if you sell regularly on a large marketplace, assume your income is visible to the tax authorities where you live. Check GOV.UK if you are a UK seller, and your own national tax authority otherwise.
Why it matters for small shops
For a seller who already declares all marketplace income, DAC7 changes little beyond a few extra form fields. For someone who has been treating a growing side business as a hobby, it is a reason to get organized.
Where DAC7 can help you
- An annual platform statement you can use to check your own records
- A nudge to separate personal and business sales clearly
- A level playing field with competitors who already declare their income
Things to watch
- Payout delays or suspension if you ignore data requests
- Questions from your tax office if declared income looks lower than reported
- Several platforms means several reports to reconcile
Personal items versus a business
Many countries treat occasional sales of your own used belongings differently from buying or making goods to sell. DAC7 does not draw that line. It simply reports activity above the threshold. Whether your sales are taxable, and how, is a question for your country's tax rules. If you are unsure, your tax authority's website or a local adviser can tell you where the line sits for you.
Your DAC7 action plan
- List every marketplace and platform you sold on this year
- Check each one for open requests for tax ID, address or business details
- Make sure your name, address and tax number match across all platforms
- Note where you are close to 30 sales or €2,000 per platform
- Download each platform's annual DAC7 or seller statement when it is available
- Reconcile platform totals with your bookkeeping, including fees and refunds
- Declare marketplace income in your tax return under your country's rules
- Ask an adviser if past income may not have been declared correctly
Frequently asked questions
Does DAC7 mean I have to pay a new tax?
No. DAC7 is a reporting rule for platforms, not a tax. Whether you owe income tax, VAT or social contributions on your sales depends on your country's existing rules and your situation.
I sold only a few items. Will I be reported?
If you sold goods and had fewer than 30 sales and €2,000 or less on a platform in the year, that platform should not report you under DAC7. If you crossed either limit, or if you offer services or rentals, you can be reported.
Can I see what the platform reported?
Platforms are expected to give reportable sellers the information they reported about them. Look in your seller account or tax documents section, and contact the platform's support if you cannot find it.
What if I refuse to give my tax ID?
The platform can suspend your account or hold back payouts until you provide it. If you have a reason why you do not have a tax ID, explain this to the platform and check what your country requires.
Related reading
The bottom line
DAC7 makes marketplaces a source of tax information about their sellers. If you sell goods and pass 30 sales or €2,000 on a platform in a year, expect to be reported, and expect your tax authority to compare that report with your return. Supply accurate details when asked, keep each platform's statement and reconcile it with your books.
This is general information, and how your marketplace income is taxed depends on where you live and how you sell. Check the European Commission's DAC7 pages, your national tax authority or GOV.UK for UK sellers, and speak to a qualified adviser if your situation is not straightforward.
