DAC7 – Updates on correction reports

DAC7 – implemented in Austria by the Austrian Digital Platform Reporting Requirement Act (DPMG) – continues to pose major challenges for platform operators. After the second year of the DAC7 reporting obligation, there are still many uncertainties regarding the report, not least how to proceed if corrections are required after submitting the report. The German Federal Central Tax Office (BZSt) has recently updated the German FAQs on the DAC7 reporting obligation. This includes new information on correction reports.

DAC7 in a nutshell

From the beginning of 2023, operators of certain digital platforms are obligated to report annually to the Tax Authority tax-relevant information on themselves and on certain suppliers registered on the platform (for details on the reporting obligation see our DAC7 micro site). The report is to be submitted by 31 January of the following year and includes data such as name, address or tax identification number of the supplier as well as information on the number of relevant activities (e.g. number of sale of goods per quarter) and received remuneration.

Status quo of correction reports in Austria

In practice, corrections of already submitted reports may be required due to returns, cancellations or suppliers submitting information late. The Austrian Digital Platform Reporting Requirement Act (DPMG) does not include any further regulations. The technical details (see our newsletter dated 17 July 2023) specify the technical rectification mechanism of already submitted data. Moreover, in July 2024 the Austrian tax authorities have commented on further technical framework conditions regarding correction reports in their guidance. However, substantive issues regarding the correction report have not yet been addressed.

News from Germany

The German Federal Central Tax Office (BZSt) has recently addressed some important questions regarding the correction report in its update of the German FAQs.

• • Correction period of 10 years: The BZSt links the correction period to the 10-year retention period for the DAC7 report. Thus, after expiry of the 10-year period, no corrections are possible anymore.
  • No joint correction reports possible: According to the German BZSt, a correction report is to be submitted immediately after recognising the need for correction. Joint correction reports in regular time intervals (e.g. per quarter/biannually) are not provided for according to the German BZSt. In our opinion, however, it is to be highlighted that reporting single corrections one at a time e.g. resulting from subsequent purchase price adjustments, are not feasible neither for the reporting platform operator nor for the receiving authority.
  • Informing suppliers of corrections not required: It is (only) required to inform suppliers prior to the regular report of reported information relating to the supplier. Informing suppliers prior to a possible correction report is not required.

Impacts in Austria

It remains to be seen how the Austrian tax authorities will comment on the correction reports. For the purpose of a uniform interpretation of the law, it is possible that the Austrian tax authorities will provide comments in line with the BZSt. Do you have any questions or require support regarding the DPMG? We look forward to being able to assist you.

Author: Sophie Schönhart