DAC7 explained: what marketplace sellers need to report, and by when

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DAC7 requires online marketplaces to report your seller data to EU tax authorities once a year, by 31 January. It does not create a new tax. What it does is give tax authorities a complete, verified picture of what you sold — which is how unregistered sellers and VAT gaps are now found.

If you sell on Amazon, eBay, Etsy, Vinted or any other marketplace with European buyers, you have probably received a message asking you to confirm your tax residence, your tax identification number and your VAT number. Possibly with a warning that your payouts will be held if you don’t.

That request comes from DAC7. Most of the guidance written about it is aimed at the platforms that have to file the reports — not at the sellers whose data is inside them. This guide takes the opposite view. It covers what your marketplace is sending, what the numbers mean, where they will differ from your own accounts, and what the whole thing means for your VAT position.

What is DAC7?

DAC7 is Council Directive (EU) 2021/514, the seventh amendment to the EU’s Directive on Administrative Cooperation. The Council adopted it on 22 March 2021 and it took effect on 1 January 2023. The first exchange of information between EU member states happened in February 2024, covering the 2023 calendar year.

The directive does one thing: it makes digital platform operators collect, verify and report information about the sellers using their platforms. Each national tax authority then shares that data automatically with the tax authorities of every member state where a seller is resident.

It is worth being precise about what DAC7 is not. It introduces no new tax and changes no rate, threshold or filing obligation. The European Commission states plainly that income earned through digital platforms continues to be taxed under each country’s existing national rules. What has changed is visibility.

Who DAC7 applies to — and who it does not

The directive works through two defined roles.

• Reporting Platform Operator — the business that runs the software connecting sellers to buyers and either handles or can determine the payment. This is your marketplace. The obligation to file sits entirely with them.
• Reportable Seller — anyone using that platform for an in-scope activity who is resident in an EU member state, or who rents out property located in the EU. This is you. You file nothing under DAC7; your data is simply included in the platform’s report.

Who is not in scope

A surprising amount of activity falls outside DAC7, and most published guides skip it:

• Payment processors. Businesses whose only role is moving money — PayPal, Stripe, Wise, Adyen — are explicitly excluded. They are not platform operators.
• Pure listing and advertising sites that do not facilitate the transaction or hold the consideration.
• Sales through your own website or app, where you are selling your own goods rather than using a platform to reach buyers.
• Excluded sellers: government entities, companies whose shares trade regularly on a stock exchange, and large accommodation providers with more than 2,000 rentals per property listing per year.

The four activities DAC7 covers

DAC7 applies to four categories of activity, known in the directive as Relevant Activities.

Both cross-border and purely domestic transactions are in scope. Selling only to buyers in your own member state does not put you outside the rules.

Which marketplaces report your data, and to whom

A platform reports to the tax authority of the member state where it is established. That is often not the country you are selling into, which is why the reports can look confusing.

What data the platform collects and sends

For an individual seller, the report includes:

• Your full name, primary address and date of birth
• Your Taxpayer Identification Number (TIN) and the country that issued it
• Your VAT identification number, where you have one
• The financial account identifier the platform pays into, and the name on that account
• Total consideration paid or credited to you, broken down by quarter
• Fees, commissions and taxes withheld by the platform, also by quarter
• The number of relevant activities — your transaction count

Businesses report a legal name, business registration number, TIN and details of any EU permanent establishment instead of personal details. Accommodation sellers additionally report the property address, land registration number and the number of days each property was rented.

The platform must verify this data, not just collect it. VAT numbers are checked against the EU’s VIES database. TINs are validated against national databases where a free official one exists — which, for private individuals and sole traders, it frequently does not. This is why platforms chase sellers so persistently for corrections: they carry the compliance risk for a report that does not validate.

The thresholds: when you become reportable

There is one exemption, and it applies only to the sale of goods. You are an excluded seller for a calendar year if both of the following are true:

• You made fewer than 30 sales transactions on that platform, and
• Your total consideration through that platform was no more than €2,000

Both conditions must be met. Twenty-five sales worth €4,000 makes you reportable. So does €900 across 40 sales. And the test is applied per platform, so a seller sitting just under the threshold on three marketplaces may be excluded on all three — while the tax authority still sees nothing at all.

There is no equivalent threshold for personal services, property rental or transport rental. In those three categories, the first euro is reportable.

One detail almost every guide gets wrong: the €2,000 is measured on consideration as the directive defines it — net of the fees, commissions and taxes the platform withheld. It is not the gross sales figure in your seller dashboard. On a marketplace charging 15%, roughly €2,350 of gross sales gets you to €2,000 of consideration.

DAC7 reporting deadlines

DAC7 runs on the calendar year, 1 January to 31 December. Platforms must complete their due diligence by 31 December and file by 31 January of the following year. Member states then exchange the data among themselves by the end of February.

The platform must also give you a copy of everything it reported about you, by the same 31 January deadline. If you have not received one and you traded above the threshold, ask for it. It is the only way to check the figures before a tax authority does.

DAC7 and the UK: what applies after Brexit

The UK is not bound by DAC7. It runs an almost identical regime of its own, because both are built on the same OECD Model Reporting Rules for Digital Platforms.

The UK rules took effect on 1 January 2024 under the Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023. The first reports were filed with HMRC by 31 January 2025, covering the 2024 calendar year.

The two regimes do not overlap for the same sale: which one reports you follows your residence. A UK-resident seller is reported to HMRC; an EU-resident seller is reported into the EU exchange. Where sellers do get caught by both is when they run entities on each side — a UK company and an EU subsidiary, say. The two datasets are built to the same OECD standard, so inconsistencies between them are easy to spot.

One point that causes real confusion for UK sellers: the platform reports on a calendar year, but the UK tax year runs to 5 April. The figure on your platform statement will never match a line on your Self Assessment return without adjustment. Separately, the £1,000 trading allowance determines whether you owe tax — it has nothing to do with whether the platform reports you. Plenty of sellers are reported to HMRC and owe nothing at all.

If you sell into Europe from outside it

Here the internet gets it wrong in both directions, so it is worth being exact.

DAC7’s test is where the seller is resident — not where the buyer is, and not where the stock sits. A Reportable Seller is one who is resident in an EU member state, or who rents out immovable property located in the EU. Nothing else.

So a US-established business with a US primary address, selling goods through Amazon’s European marketplaces, is generally not a Reportable Seller under DAC7 — even with inventory in German and Polish fulfilment centres. Amazon’s own guidance reflects this: its DAC7 questionnaire is triggered by a primary address in the EU. Holding stock in a warehouse is normally a preparatory or auxiliary activity and does not by itself create a permanent establishment.

Four ways non-EU sellers are caught anyway

• You have an EU entity. Most sellers who scale into Europe eventually incorporate there. That entity is EU-resident and squarely in scope.
• You have an EU-issued tax identification number. Residence is determined by primary address and by the member state that issued your TIN. If a member state has issued you one, the platform treats you as resident there too.
• You declared an EU permanent establishment. Where a seller reports a permanent establishment through which relevant activities are carried out, that member state becomes a residence state for DAC7.
• You rent out EU property. This one ignores residence entirely. A US owner letting an apartment in Lisbon through a platform is reportable, full stop.

The practical conclusion for US sellers is not “DAC7 doesn’t apply to me, ignore it.” It is that DAC7 is one of several channels feeding the same picture. Your EU VAT registrations, your OSS or IOSS returns, customs import data and marketplace deemed-supplier VAT reporting all reach the same authorities regardless. If you hold stock in European fulfilment centres — through Pan-European FBA or otherwise — the registrations that creates are visible whether or not a DAC7 report ever names you.

Why the reported figure matches neither your sales nor your bank

This causes more alarm than anything else in DAC7, and it is almost always explainable once you know what the number actually is.

The directive defines consideration as compensation in any form, net of any fees, commissions or taxes withheld or charged by the platform, that is paid or credited to the seller. Those withheld fees and taxes are then reported again, as separate figures. So the authority receives three numbers and can reconstruct your gross from them — but the headline “consideration” line is neither your turnover nor your payout.

Take a seller with €48,000 of gross sales through one marketplace in a year:

Three things follow from this, and each one trips sellers up:

• The reported figure sits between your turnover and your payout. €36,700 will not reconcile to either without working through the fees and withheld tax.
• It is not profit. Income tax is charged on profit — after cost of goods, shipping, advertising and everything else. A consideration figure of €36,700 says nothing about what you owe.
• It is reported per platform, per quarter, on a calendar year. Multi-channel sellers receive several reports on different figures, none of which line up with a single annual line in their accounts.

None of these numbers is wrong. But if you cannot demonstrate the bridge between them, you are the one explaining it. Reconcile each platform’s copy against your own ledger when it arrives in January — not eighteen months later when someone asks.

What DAC7 actually means for your VAT position

This is the part worth understanding properly, because it is where DAC7 stops being an administrative curiosity and starts having a cost.

DAC7 imposes no VAT obligation. But it hands every EU tax authority a verified, cross-referenced record of who sold what, where and for how much. That data is used for exactly what you would expect:

• Identifying sellers trading above a registration threshold in a country where they have never registered
• Spotting sellers who should be using OSS or IOSS and are not, or who have exceeded the €10,000 pan-EU distance selling threshold without switching
• Cross-checking declared turnover in VAT returns against what the marketplace independently reported
• Building a picture of historic activity, since the data now goes back to 2023

That last point deserves emphasis. If you have been trading in a country where you should have registered and have not, the exposure is not prospective — it is backdated, with interest and penalties on top. The sensible response is to establish your position and correct it voluntarily, before a tax authority opens the conversation. Penalties for unprompted disclosure are consistently and substantially lower than for prompted ones.

If any of this is unfamiliar territory, our guides to VAT registration in the UK and VAT for digital services are a reasonable place to start.

What happens if you ignore it

Two separate consequences, and the first arrives much faster than the second.

The platform acts first — and it has no choice

This is widely misreported as marketplaces being heavy-handed. It is not. The directive itself requires it.

If a seller does not supply the required information, the platform must send two reminders. If the information still has not arrived, and no sooner than 60 days after the initial request, the platform is obliged to do one of two things: close the account and prevent the seller re-registering, or withhold payment of consideration until the data is provided. Amazon gives sellers exactly 60 days from its first notification, and can hold disbursements after that.

So when a marketplace warns that your payouts will be frozen, it is not a commercial threat. It is the platform complying with an obligation it cannot waive. For most sellers this 60-day clock, not 31 January, is the deadline that actually bites.

Then the tax authority

DAC7 requires member states to set penalties that are effective, proportionate and dissuasive, and leaves the amounts to each country. They vary widely. Ireland, at the strict end, imposes an initial penalty of €19,045 plus €2,535 for each day a return remains outstanding. Those figures apply to platform operators rather than sellers — but they indicate how seriously the regime is treated.

For sellers, the exposure comes through the underlying tax rather than DAC7 itself: unpaid VAT, unpaid income or corporation tax, plus interest and penalties. And the data volumes are no longer theoretical. A Freedom of Information response obtained by BDO shows HMRC received reports on 1.47 million sellers for 2024 and 3.99 million for 2025 — a 272% increase in one year, covering close to £55 billion of online earnings. Nudge letters to sellers whose returns do not match that data are already going out.

What is changing: the June 2026 DAC Recast

On 24 June 2026 the European Commission adopted a tax simplification package that includes a recast of the entire Directive on Administrative Cooperation, consolidating DAC1 through DAC9 into a single legal instrument. Several DAC7 changes are in it:

• The goods threshold rises from €2,000 to €3,000
• The 30-transaction test is removed entirely — only the monetary threshold would remain
• A new exemption for small platform operators facilitating less than €50,000 of relevant activity a year
• Clarification that intermediary and merchant-of-record structures can themselves qualify as platform operators
• An EU-wide TIN verification tool to improve data matching

The Commission estimates this lifts reporting obligations from more than 10 million mostly private sellers, largely in second-hand goods.

One important caveat. This is a proposal, not law. It requires unanimous agreement in the Council. The Irish presidency is aiming to conclude negotiations by the end of 2026, with implementation in 2027 and most changes taking effect from 1 January 2028. Until then the current rules apply unchanged — €2,000 and 30 transactions. Do not re-scope anything on the basis of a proposal that has not been adopted.

How DAC7 fits with e-invoicing, ViDA and DAC8

DAC7 is one component of a broader move toward automated tax data. The others are arriving on their own timetables:

• ViDA and IOSS — shifting VAT liability onto sellers and platforms, with cross-border e-invoicing under ViDA from 2030
• E-invoicing mandates — already live in Italy, Poland and Belgium, with France following in September 2026 and the UK from 2029
• DAC8 and the Crypto-Asset Reporting Framework — crypto platform rules began on 1 January 2026, with first reports due in 2027
• CESOP — payment service provider reporting, often confused with DAC7 but a separate regime under the VAT Directive, and untouched by the recast

The direction is consistent: tax authorities are receiving structured transaction data directly from the businesses that process it, rather than relying on what taxpayers declare. The practical implication for sellers is that data quality and consistency across systems now matter as much as filing on time.

How AVASK helps

DAC7 filing is the platform’s obligation, not yours — so nobody should be selling you a DAC7 return. Where sellers do need support is in the three areas around it:

• Reconciliation. Our platform ingests sales, fee and settlement data directly from Amazon, Shopify, eBay and 20+ other channels, so the figures a marketplace reports can be matched against your own records without manual work.
• Registration where a gap appears. If DAC7 data reveals activity in a country where you are not registered, we handle VAT registration and filing, OSS and IOSS, and ongoing compliance across every jurisdiction involved.
• Retrospective exposure. Where past income was under-declared, we manage voluntary disclosure and backdated registration — which is materially cheaper than waiting to be found.

420+ compliance specialists across 12 countries, covering 25 languages. If you would like to understand your position before January, we will map it against where you actually sell and hold stock.

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