COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Tax fraud and evasion – better cooperation between national tax authorities on exchanging information Accompanying the document Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation
Date: 2020-07-15
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, digital economy taxation, exchange of information, fraud, tax avoidance, tax evasion, tax law

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.7.2020  SWD(2020) 131 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Tax fraud and evasion – better cooperation between national tax authorities on exchanging information        Accompanying the document Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation {COM(2020) 314 final} - {SEC(2020) 271 final} - {SWD(2020) 129 final} - {SWD(2020) 130 final}  
 
 
TABLE OF CONTENTS 

1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT .......................................... 4 

2 PROBLEM DEFINITION................................................................................................ 9 

2.1. What are the problems? ........................................................................................ 9 
2.2. What are the problem drivers? ........................................................................... 13 
2.2. How will the problem evolve? ........................................................................... 16 

3 WHY SHOULD THE EU ACT? ................................................................................... 18 

3.1 Legal basis ........................................................................................................... 18 
3.2 Subsidiarity: Necessity of EU action ................................................................... 18 
3.3 Proportionality: Added value of EU action ......................................................... 19 

4 OBJECTIVES: WHAT IS TO BE ACHIEVED? .......................................................... 20 

4.1 General objectives ............................................................................................... 20 
4.2 Specific objectives ............................................................................................... 21 

5 WHAT ARE THE AVAILABLE POLICY OPTIONS? ............................................... 22 

5.1 - Baseline ............................................................................................................. 22 
5.2 - EU non legislative intervention to recommend the implementation of a 

global standard ................................................................................................. 22 
5.3 – EU legislative intervention ............................................................................... 22 
5.4  –  Follow  up  to  the  DAC  evaluation:  Strengthening  administrative 

cooperation ...................................................................................................... 27 
5.5 - Options discarded at an early stage ................................................................... 28 

6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ...................................... 30 

6.1 Overview of options ............................................................................................ 30 
6.2 Economic impacts ............................................................................................... 31 
6.3 Social and environmental impacts ....................................................................... 50 

7 HOW DO THE OPTIONS COMPARE? ....................................................................... 53 

8 PREFERRED OPTION .................................................................................................. 55 

9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? ............ 59 

9.1 Indicators for monitoring and evaluation ............................................................ 59 
9.2 Monitoring and reporting .................................................................................... 59 

ANNEX 1: PROCEDURAL INFORMATION ................................................................ 61 

ANNEX 2: STAKEHOLDER CONSULTATION ........................................................... 64 

ANNEX 3: WHO IS AFFECTED AND HOW? ............................................................... 78 

ANNEX 4: ANALYTICAL METHODS .......................................................................... 81 

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ANNEX  5:  THE  OECD  MODEL  RULES  FOR  SELLERS  IN  THE  SHARING 

AND GIG ECONOMY ............................................................................................. 90 

ANNEX  6:  OVERVIEW  OF  PLATFORM  REPORTING  OBLIGATIONS  AT 

NATIONAL LEVEL ................................................................................................. 94 

ANNEX 7: BIBLIOGRAPHY .......................................................................................... 97 

ANNEX 

8: 

2019  EVALUATION  OF  THE  DIRECTIVE  ON 

ADMINISTRATIVE COOPERATION (DAC)...................................................... 100 

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Glossary 

Term or acronym 

Meaning or definition 

BEPS 

CCN 

COVID-19 

CRS  

Base Erosion and Profit Shifting 

Common Communication Network 

New coronavirus disease  

The Common Reporting Standard (CRS), developed by 
the OECD, calls on financial institutions to report 
information to tax administrations and on the latter to 
exchange automatically that information with each other. 
It has been implemented in the EU through the first 
amendment to the Directive on Administrative 
Cooperation, in 2014, the so-called DAC2 Directive.  

DAC  

Directive on Administrative Cooperation, Council 
Directive 2011/16 EU 

E-commerce 

FPG  

FPG/097  

G20  

GDPR  

OECD  

SMEs  

TADEUS 

TFEU 

TIN 

Consolidated version: https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:02011L0016-20170605  

Electronic commerce, the activity of electronically 
buying or selling products on online services or over the 
Internet. 

Fiscalis Project Group: a cooperation activity between 
tax administrations to develop common projects, 
supported by the Fiscalis 2020 programme.  

The Fiscalis Project Group on ‘Digital and Data’: a 
cooperation activity between 18 Member States who 
worked together to prepare a report (not public) on a 
common EU model for exchanging data, gathered from 
platforms.  

The Group of Twenty  

General Data Protection Regulation 

Organisation for Economic Co-operation and 
Development  

Small and medium-sized enterprises 

Tax  Administration EU Summit 

Treaty on the Functioning of the European Union  

Tax Identification Number 

3 

 
 
 
 
 
1 INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

A  tax  system  where  everybody  pays  their  fair  share  is  essential  in  order  to  ensure  an 
economy that works for  people, as stressed by President von der  Leyen in the political 
guidelines  for  the  European  Commission.1  Fair  and  efficient  taxation  promotes  social 
justice and a business level playing field in the European Union (EU). Fair taxation is an 
important  priority  of  the  Commission  and  "one  of  the  key  foundations  of  our  social 
market economy".2 The COVID-19 pandemic adds urgency to the need to protect public 
finances and ensure fair-burden sharing.  

Fair taxation requires on the one hand to step up the fight against fraud, and on the other 
hand  to  simplify  tax  rules  in  order  to  facilitate  compliance.  To  translate  this  high-level 
political  commitment  into  action,  the  Commission  has  put  forward  a  set  of  actions  to 
fight tax evasion, not only within the EU but on a global scale, and make taxation simple 
and  easy.3  This  initiative  is  part  of  it.  It  is  linked  to  the  objective  to  fight  against  tax 
avoidance and evasion4  and to  ensure everyone pays their fair share and fits  within the 
overarching EU strategy for recovery5 

Fair taxation is not only a Commission priority, it is also shared by the Council and the 
European Parliament. In 2014, the European Council affirmed the urgency of fighting tax 
avoidance,  stressing  the  importance  of  transparency.6  The  European  Parliament  has  in 
several  occasions  stressed  the  political  importance  of  fair  taxation  and  of  fighting  tax 
fraud, evasion and avoidance. In 2019, the Parliament pointed out that “existing tax rules 
are  often  unable  to  keep  up  with  the  increasing  speed  of  the  economy”  and  that  it  is 
urgent to act to make sure tax systems are fit for the technological challenges of the 21st 
century to “ensure that all market participants pay their fair share of taxes”.7 Previously, 
the Parliament overall had supported the Commission’s taxation agenda, putting forward 
several recommendations to stimulate further progress and action.8 Furthermore, also the 
European  Economic  and  Social  Committee  has  actively  contributed  to  the  debate  on 
policy solutions for fair taxation, including in the area of digital platforms.9  

Thanks  to  the  support  of  the  European  Parliament  and  the  unanimous  adoption  of 
Commission proposals in Council, in the past ten years major progress has already been 
made  in  the  fight  against  tax  avoidance  and  evasion,  especially  to  expand  tax 
transparency and cooperation. Better cooperation and a greater exchange of information 
between tax administrations are essential in the fight against tax avoidance and evasion. 

1 Political guidelines for the next European Commission 2019-2024  
2 European Commission. (2019). Political guidelines for the next European Commission 2019-2024, p. 12.  
3  European  Commission.  (2020).  Commission  Work  Programme  2020:  A  Union  that  strives  for  more. 
(COM(2020) 37 final) 
4 European Commission (2020). Communication on an action plan for fair and simple taxation supporting 
the recovery strategy; and European Commission (2020). Communication on Tax Good Governance.  
5 European Commission (2020). ‘Europe's moment: Repair and Prepare for the Next Generation’.   
6 European Council (2014). Conclusions of the European Council of 18 December 2014. 
7 European Parliament (2019). European Parliament resolution of 26 March 2019 on financial crimes, tax 
evasion and tax avoidance (2018/2121(INI)). 
8  This  European  Parliament  factsheet  provides  a  comprehensive,  up  to  date  overview  of  the  European 
Parliament’s role and recent achievements in EU tax policy: 
https://www.europarl.europa.eu/factsheets/en/sheet/92/general-tax-policy  
9  European  Economic  and  Social  Committee.  (2020). Taxation  of  the  collaborative  economy  –  reporting 
requirements (additional opinion). ECO/500-EESC-2019.   

4 

 
                                                 
The Directive on Administrative Cooperation10 (DAC) frames this cooperation within the 
EU for the purposes of direct taxation and has been amended several times over the last 
years to meet new challenges.11  

It  is  important  to  ensure  that  it  remains  fit  for  purpose,  in  an  economy  where  new 
business models emerge and challenge the existing rules on administrative cooperation. 
This  impact  assessment  presents  policy  actions  to  expand  the  exchange  of  information 
within the EU to cover income or revenue12 generated through digital platforms; and to 
further strengthen administrative cooperation between tax authorities.  

First, we will focus on the exchange of information in relation to money earned by users 
of digital platforms, either private individuals or entities. Digital platforms can be defined 
as  providers  of  multi-sided  digital  interfaces  that  allow  users  to  find  other  users  and 
interact with them. The platforms facilitate the provision of underlying supplies of goods 
or services against monetary consideration directly between the users.13 Digital platforms 
can play a positive role for our economies. They provide opportunities for better services 
for consumers and suppliers alike. They also represent a significant, and growing, share 
of our economies.14  

From  the  perspective  of  tax  administration,  digital  platforms  represent  also  an 
opportunity  for  reporting  data.  It  has  been  observed  that  there  is  underreporting  in  the 
new business models  and that there is space for more support from digital platforms in 
addressing non-compliance.  

Digital platform operators typically do not inform tax administrations about the income 
or  other  forms  of  revenues  that  individuals  and  entities  providing  services  or  selling 
goods  via  online  platforms  (hereinafter  designated  as  “platform  sellers”  or  simply  as 
“sellers”) earn.15  They also generally do not collect any tax on behalf of tax authorities, 
as  it  is  customary  in  other  sectors.  Often,  employers  provide  information  to  tax 
authorities  about  the  wages  they  pay  to  their  employees.  But  the  definition  of 
employment  status  is  more  blurred  and  contentious  when  it  comes  to  platform  sellers. 
Therefore,  tax  administrations  currently  have  little  tools  available  in  order  to  verify 
whether the income earned by platform sellers is declared and, if so, whether the amount 
is  right. This  is  problematic. As pointed out  by the European Parliament, “defining tax 
bases requires being in possession of a full picture of a taxpayer’s situation”.16  

10 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation 
and repealing Directive 77/799/EEC, OJ L 64/1. 
11  Directive  2014/107/EU  (DAC2),  Directive  2015/2376/EU  (DAC3),  Directive  2016/881/EU  (DAC4), 
Directive 2016/2258/EU (DAC5), Directive 2018/822/EU (DAC6). 
12 The expression “income or revenues” intends to cater for both the situations where the taxpayer engages 
in a business activity (revenues) or receives other income (such as a wage/salary).  
13 We understand the issue of defining a platform may be sensitive, as definitions may differ depending the 
policy context. In the context of this initiative, we clarify the following: “The concept of a Platform does 
not include software exclusively allowing the (i) processing of payments, (ii) listing or advertising, or (iii) 
redirecting or transferring of users to a Platform”.  
14 More information on digital platforms can be found in Vaughan, R., & Daverio, R. (2016).  
15 The term is used for the purposes of this impact assessment and is meant here to cover also workers who 
do  their  job  via  the  intermediation  of  platforms,  or  platform  workers,  for  instance  delivery  workers  or 
drivers etc.  
16 European Parliament (2019). European Parliament resolution of 26 March 2019 on financial crimes, tax 
evasion and tax avoidance (2018/2121(INI)). 

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The  main  issue  policymakers  are  being  asked  is  whether  or  not  to  require  digital 
platforms to report – in a standardised manner throughout the EU – to tax administrations 
how  much  those  who  use  these  platforms  to  rent  an  apartment,  or  provide  transport  or 
other  services,  sell  goods  etc.  earn.  The  public  policy  objective  of  this  reporting  of 
information  from  platforms  to  tax  administrations,  and  the  subsequent  exchange  of 
information  across tax administrations to  the Member State  where the seller is  resident 
(or where his/her immovable property is located), is to check that those who earn money 
via platforms pay tax as they are supposed to or, to put it differently, do not evade tax.  

It  is  important  to  clarify  that  this  initiative  is  focused  on  the  reporting  of  income  and 
revenues earned by platform sellers and the transfer of that information to the use of the 
Member State where the platform seller is resident. It does not cover the actual taxation 
of  such  income  and  revenues,  which  will  be  based  on  each  Member  State’s  national 
rules. It does not cover either the taxation of the profit made by the platforms themselves. 
However,  the  question  of  fair  taxation  of  digital  platforms  is  not  forgotten:  the 
Commission  is  conducting  in  parallel  work  to  ensure  fair  taxation  of  the  platforms 
themselves, as part of the Business Taxation for the 21st century initiative.17  

For the purposes of this report, the main features of a digital platform business model are 
typically considered to be: 

  A  platform  brings  together  sellers  and  seekers  and  facilitates  all  processes 

between them, usually charging a fee for the facilitation of the transaction. 

  A  platform  usually  does  not  possess  any  of  the  assets  on  offer  and  does  not 

provide the services via its own staff. 

  For  services,  access  instead  of  ownership:  rather  than  buying  an  asset,  the 
customer rents it from someone else, or engages a service via the platform. Other 
platforms, usually designated “marketplaces”, facilitate the sale of goods. 

Tax  administrators  have,  for  some  time  already,  looked  into  this  challenging  question, 
trying to come up with effective and efficient solution. The aim is to reach a “win-win” 
solution,  on  the  one  hand  being  able  to  satisfy  the  information  needs  of  tax 
administrations  and  ultimately  to  ensure  fair  taxation;  on  the  other  hand,  keeping  any 
possible, additional administrative burden for platform operators as limited as possible.  

The intervention logic is similar to the one underpinning the reporting and the automatic 
exchange  of  financial  account  information.  To  address  underreporting  of  such  income, 
policymakers agreed first, within the EU, on the Savings Directive18 and secondly on a 
global  Common  Reporting  Standard  (CRS)19,  implemented  in  the  EU  by  the  first 
amendment to the Directive on Administrative Cooperation (the so-called DAC2).20 As 
the  evaluation  of  the  Directive  shows,21  initial  costs  to  put  in  place  this  automatic 

17  European  Commission.  (2020).  Commission  Work  Programme  2020:  A  Union  that  strives  for  more. 
(COM(2020) 37final), p. 6.  
18  Council  Directive  2003/48/EC  of  3  June  2003  on  taxation  of  savings  income  in  the  form  of  interest 
payments (OJ L 157, 26.6.2003, p. 38). 
19 http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/  
20  Council  Directive  2014/107/EU  of  9  December  2014  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation (OJ L 359, 16.12.2014, p. 1). 
21 European Commission. (2019). Commission staff working document Evaluation of the Council Directive 
(EU) no 2011/16/EU on administrative cooperation in the field of direct taxation and repealing Directive 

6 

 
                                                 
 
reporting by financial institutions  to  tax authorities and the subsequent  exchanges were 
significant.  Yet,  the  intervention  addressed  the  challenge  of  underreporting  of  financial 
accounts  and  put  in  place  one  single  standard  instead  of  several  different  national 
approaches. The introduction of new measures to strengthen the exchange of information 
framework,  by  extending  reporting  obligations  to  digital  platforms,  gathers  a  broad 
support  among  Member  States,  as  was  reflected  both  in  the  discussions  at  a  Working 
Party  IV  meeting,  which  met  in  February  2020,  and  at  the  High  Level  Working  Party 
meeting  of  March  2020.  It  was  also  supported  by  stakeholders,  as  expressed  during  a 
targeted consultation of platforms’ representatives.  

Tax  administrations  have  worked  on  this  challenge  already  both  at  the  EU  and  at  the 
OECD  level.  On  the  EU  side,  representatives  of  eighteen  Member  States’  tax 
administrations worked on a “Digital and data” project and delivered in 2019 a technical 
report  (the  “digital  and  data  report”),  which  provides  a  sound  basis  for  the  options  put 
forward in this impact assessment.22 The heads of the EU tax administrations welcomed 
this report at their meeting of September 2019 in Helsinki.23 On the OECD side, work is 
ongoing to  deliver by mid-2020 model rules  for  the reporting of information  by digital 
platforms.24  Commission  staff,  as  well  as  Member  States  representatives,  are  attending 
relevant  OECD  meetings  and  contributing  to  the  preparation  of  the  final  deliverable  of 
this project, a set of model rules for platform reporting. This initiative takes into account 
the discussions both  at EU and international  levels.  It  is  important to  bear in  mind that 
the key challenge at stake in this impact assessment is one of tax administration and of 
proper reporting of income and revenue generated through digital platforms.  

This  impact  assessment  does  not  address  the  issue  of  whether  platforms,  as  companies 
themselves pay their fair share, in relation to the profits they make. The Commission is 
however actively contributing to international discussions, led by the OECD and G20, on 
the reform of the international corporate tax system to make it fit for today’s increasingly 
digitalised  and  globalised  economy.  This  initiative  aims  at  tackling  the  problem  of 
having  a significant  amount  of money  earned by people and businesses selling through 
platforms which has the potential of not being reported and remains un-taxed, therefore 
fostering the shadow economy. The issues at stake are also separate from broader policy 
initiatives aimed at upgrading the EU legal framework of the digital sector, in particular 
the  forthcoming  Digital  Services  Act,  or  an  initiative  aimed  at  improving  the  labour 
conditions of platform workers.25  

Secondly,  the  aim  is  to  touch  upon  the  question  of  improving  tax  administrative 
cooperation  more  generally.  In  2019,  the  Commission  services  concluded  the  first 
evaluation of the effectiveness, efficiency, relevance, coherence and EU added value of 

77/799/EEC (SWD(2019)328 final). Annex 8 provides additional information on how to access this staff 
working document, its executive summary as well as the supporting study. 
22  “The  ‘Digital  and  data’  project  –on  reporting  requirements  for  the  sharing  and  gig  economy  -led  by 
Finland provides a sound technical basis for possible future policy and technical initiatives.”, quoted from 
TADEUS 2019 Outcomes statement. The final project report is not public.  
23 TADEUS 2019 Outcomes Statement:  
https://ec.europa.eu/taxation_customs/sites/taxation/files/tadeus_2019_outcomes_statement_-
_1st_plenary_meeting_helsinki_finland.pdf  
24  At  the  time  of  writing,  OECD  discussions  are  ongoing.  They  are  expected  to  close  by  mid-2020  but 
delays  cannot  be  excluded,  in  particular  taking  into  account  the  effect  of  the  COVID-19  crisis  on  the 
operations of tax administrations.  
25 For more information on these initiatives, please refer to the EU Commission Work Programme 2020,  
2.2.A Europe fit for the digital age and Commission Communication on "Shaping Europe's digital future".  

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administrative  cooperation  in  the  field  of  direct  taxation.  26  The  evaluation  pointed  out 
that  cooperation  brings  about  important  benefits,  yet  there  remains  scope  for 
improvement.  For  example,  differences  remain  in  the  way  Member  States  exploit  the 
available  tools.  The  information  could  be  used  more  efficiently  and  the  benefits  of 
cooperation  could  be  analysed  in  a  more  comprehensive  manner.  Building  upon  the 
evaluation, this impact assessment presents ideas for a limited set of precise interventions 
to improve the functioning of administrative cooperation.  

At  the  time  of  writing  this  impact  assessment,  the  European  Union  and  the  world  are 
facing the COVID-19 pandemic, an “unprecedented situation” and crisis  putting strains 
on citizens’ way of life, on society and economy.27 It matters to underline first, that the 
objectives of this intervention and in particular fair taxation will remain fully valid in a 
post-COVID  world  and  second,  that  its  estimates  costs  and  efforts  would  not  be 
unreasonable to impose in a world focused primarily on recovery.  

Finally,  a  remark  on  the  approach  taken  by  this  impact  assessment:  this  document 
attempts  to  quantify  the  economic  impacts  as  much  as  possible.  When  it  comes  to  the 
estimation  of  benefits  -  in  particular  the  additional  tax  revenues  -  the  method  relies  on 
four key variables: the estimated total value of transactions facilitated by platforms, the 
percentage of those transactions that represents taxable revenue, the average tax rate and 
the percentage of revenue that is currently not reported, but would be as a result of the 
implementation  of  the  option.  Concerning  costs,  the  method  is  based  on  the  Standard 
Cost Model, whereby cost estimates depend on how often a certain activity is undertaken 
and the price of such activity.28 The key results of the analysis are presented in chapter 6, 
while annex 4 gives more information on the methodology and assumptions used.  

This document is divided into the following chapters: after the introduction in chapter 1, 
chapter 2 defines the problems at stake. Chapter 3 looks at the case for EU intervention; 
chapter  4  spells  out  the  objectives  of  the  intervention.  Chapter  5  describes  the  policy 
options, while chapter 6 analyses their impacts and chapter 7 briefly compares them. As a 
result  of  the  comparative  analysis  of  impacts,  one  option  is  chosen  as  “preferred”  one, 
described  in  chapter  8.  Chapter  9  answers  the  question  of  how  the  impact  of  the 
intervention  will  be  monitored  and  evaluated.  Several  annexes  provide  additional 
procedural  and  contextual  information,  as  well  as,  a  summary  of  the  stakeholders’ 
consultation.  

26 European Commission. (2019). Commission staff working document Evaluation of the Council Directive 
(EU) no 2011/16/EU on administrative cooperation in the field of direct taxation and repealing Directive 
77/799/EEC (SWD(2019)328 final).  
27  Speech  by  President  von  der  Leyen  at  the  European  Parliament  Plenary  on  the  European  coordinated 
response to the COVID-19 outbreak, 26 March 2019: 
https://ec.europa.eu/commission/presscorner/detail/en/speech_20_532  
28 https://ec.europa.eu/info/sites/info/files/file_import/better-regulation-toolbox-60_en_0.pdf  

8 

 
 
                                                 
2 PROBLEM DEFINITION 

The definition of the problem at hand is complex and its analysis made more challenging 
due to the fact that available data is scarce. An attempt has been made at estimating how 
significant the problems are. The problem drivers are also examined and the evolution of 
the problem - in the absence of EU policy intervention – is assessed. A problem tree chart 
presents visually the problems, their drivers and consequences.  

Figure 1 Problem Tree 

2.1. What are the problems? 

This impact assessment focuses on two key problems:  

1.  Limited reporting of income and revenues gained via digital platforms;  
2.  Inefficiencies  in  the  current  EU  framework  for  cooperation  between  tax 

administrations.  

The first problem which needs to be addressed is under-reporting (or lack of reporting 
overall)  by  platform  sellers.  At  present,  a  sizeable  amount  of  earnings  obtained  via 
digital platforms remain unknown to tax administrations and untaxed. It is important to 

9 

 
 
clarify  that  digital  platforms  do  not  play  a  direct  role  in  underreporting.  However, 
because of their digitalised and global business model, accompanied by a fragmentation 
of  a  sellers’  activities  across  various  platforms,  it  is  difficult  for  tax  administrations  to 
trace how much income is earned through these platforms. 

The targeted consultation of Member States that was run in the context of this initiative 
confirmed  that  platform  sellers  often  do  not  report  as  they  should.  Nineteen  out  of 
twenty-two respondents (EU Member States) consider that there is  a significant lack of 
reporting  of  revenues  obtained  through  digital  platforms.  In  addition,  eighteen  out  of 
twenty-two  Member  States  perceive  activities  carried  out  through  a  digital  platform  as 
high  risk  in  terms  of  tax  avoidance,  evasion  or  fraud  (especially  accommodation  and 
transportation  activities).  Regarding  the  rate  of  compliance  by  platform  sellers,  it  was 
estimated  by  most  Member  States  as  low  or  very  low,  both  when  it  comes  to  sales  of 
goods  and  provision  of  services.  However,  no  Member  State  could  provide  an  overall 
estimation of the non-compliance rate or was able to estimate the size of such a gap.  

The  outcome  of  the  public  consultation,  which  includes  the  feedback  from  some 
platforms,  also  reflects  such  perception  of  under-reporting  in  the  platform  sector.  The 
majority of the respondents to the public consultation agree with the statement that there 
is  a  significant  lack  of  reporting,  for  taxation  purposes,  of  revenues  obtained  through 
digital platforms. Similarly, they consider that there is a risk of tax avoidance, evasion or 
fraud  as  regards  activities  carried  out  through  a  digital  platform.  Finally,  most  of  them 
believe  that  individual  EU  countries  are  not  sufficiently  equipped  to  track  revenues 
generated  through  digital  platforms.  As  part  of  the  TADEUS  project  on  ‘Digital  and 
Data’,29  which  gathers  the  Heads  of  tax  administrations  from  across  the  EU,  some 
Member States  provided information  on their national  experience with  given sectors.  It 
suggests significant amounts of unreported income for tax purposes: 

 

 

 

 

In one Member State, an audit on transportation service drivers showed that only 
3 out of 1 195 (less than 1%) drivers had reported correct information to the tax 
authorities (audit done in 2018). 
In  another  Member  State,  a  study  showed  that  2  400  out  of  8  400  (~29%) 
individuals who received income from short-term rentals did not completely fulfil 
reporting obligations (study done in 2018). 
In  another  Member  State,  the  tax  administration  issued  letters  reminding 
taxpayers  of  the  duty  to  report  income  gained  through  platforms.  This  action 
resulted  in  a  35%  increase  in  reported  income  from  property  rental  (campaign 
done in 2016). 
In another Member State, audits of users of a specific platform have resulted in an 
adjustment  of  their  income  taxes  and/or  value  added  taxes  in  40%  of  the  cases 
(audits done in 2017). 

29 FPG/097 “Digital and data” was a Fiscalis project group that brought together 18 Member States, from 
February until September 2019. Participants mapped their respective legislation in the area of reporting by 
digital platform operators, and found considerable difficulties especially for extending the national rules to 
actors  abroad. Therefore  the  project  group  suggested  the  Commission  to  look  into  a  common  format  for 
reporting  nationally  and  thereafter  applying  administrative  cooperation  via  a  swift  and  safe  automatic 
exchange of the reported tax information towards the relevant Member State.  

10 

 
                                                 
Overall,  the  survey  launched  among  Member  States  showed  that  twenty-one  Member 
States  have  conducted  compliance  activities  targeting  transactions  facilitated  by 
platforms, such as audits, letters or information campaigns. 

 

In  another Member State, tax authorities have observed a significant  correlation 
between growth in the use of digital platforms and the tax gap.30  

Digital  platforms  have  become  important  players  in  various  sectors  of  the  economy. 
While  it  is  difficult  to  give  a  precise  estimation  of  the  size  of  the  digital  platform 
economy (i.e. the total size of transactions occurring on digital platforms), it is significant 
and  likely  to  grow.  As  further  detailed  in  chapter  6  (and  based  on  own  computations),  
the  total  value  of  services  transacted  on  digital  platforms  in  2018  in  the  EU-27  can  be 
estimated at EUR 34.3 billion, while the total value of goods transacted on online peer-
to-peer platforms is estimated at EUR20.7 billion. The largest service sectors are short-
term accommodation, transportation and collaborative finance, and they are expected to 
continue growing in the next years.  

On  the  basis  of  these  pieces  of  evidence,  it  is  possible  to  estimate  the  tax  gap  (i.e.  the 
difference between the taxes that should have been collected based on existing tax rules 
and the taxes actually collected) in the digital platform economy for the whole EU. This 
document estimates the tax gap in all sectors (goods and services) in 2018 to be between 
EUR2.7  billion  (lower  bound)  and  EUR7.1  billion  (upper  bound).  These  values  are 
expected to  triple by 2025. The calculations rely on several assumptions, among which 
the  most  important  are:  the  applicable  tax  rate  (20%  in  the  low  case,  40%  in  the  high 
case), the fraction of income that is taxable (65% for most sectors), the fraction of taxes 
not currently paid (50%) and the total value of observable transactions.  

Similarly,  within  the  “Digital  and  Data”  project,  the  tax  gap  for  services  performed  on 
digital platforms was  estimated in a range from EUR1.1 to EUR2.7 billion for tax year 
2015. Taking a 2016 study as starting point,31 the group reached an estimate of the tax 
gap by making the following four key assumptions:  

1.  EUR28  billion  worth  of  transactions  (services  only)  via  digital  platforms  (for 

2015);  

2.  Between  50  and  up  to  80%  of  these  transactions  are  deemed  taxable  income, 
resulting in a total amount of taxable income between EUR 14.0 and 22.4 billion.  
3.  Between 40 and 60% of that income is  assumed not  to  be reported, resulting in 

unreported income between EUR5.6 and up to EUR13.4 billion. 

4.  Assumption  of a flat  income tax rate of 20% on  this basis, leading to  a tax gap 

between EUR1.1 - 2.7 billion (for 2015).   

The chart below illustrates these estimates.  

30  Remarks  by  Latvian  participant  at  European  Economic  and  Social  Committee  hearing  on  “The 
collaborative economy - data exchange with tax authorities”, 13 February 2020, Tallinn.  
31  Assessing  the  size  and  presence  of  the  collaborative  economy  in  Europe,  written  by:  Robert  Vaughan 
and Raphael Daverio, PwC UK, April 2016.  

11 

 
                                                 
Figure 2. Estimates on taxable income, unreported income and tax gap for 2015 

Source: Figure based on the ‘Digital and data’ project – on reporting requirements for the sharing and gig economy 

The  reasons  for  the  lack  of  reporting  (or  under-reporting)  by  sellers  active  on  these 
platforms  are  diverse.  In  some  cases,  those  earning  income  or  revenues  via  platforms 
may  not  know  they  have  to  report  their  earnings.  In  other  cases,  platform  sellers  may 
deliberately choose not to report the revenues obtained. Acting to tackle this problem is 
in line with the objectives of the Commission.  

The lack of reporting indirectly affects all EU citizens and businesses. Tax avoidance and 
evasion  lead  to  fewer  resources  to  fund  social  services  of  public  utility,  such  as 
education, healthcare, pensions and infrastructure. More specifically, the problem affects 
compliant  taxpayers  "who  do  the  right  thing"  and  pay  their  fair  share  of  taxes.  Cost 
reduction  achieved  by  not  paying  taxes  is  not  an  acceptable  practice  in  the  EU  or 
elsewhere.  

Within the EU, for years, there has been a robust mechanism in place to ensure that tax 
administrations  cooperate  with  each  other  to  tackle,  underreporting  of  income  and  tax 
evasion:  the  Directive  on  Administrative  Cooperation  in  direct  taxation  (DAC).32  This 
mechanism  has  been  recently  evaluated.  One  of  the  findings  is  that  it  is  important  to 
adapt this framework to ensure it remains relevant in the context of a changing economy, 
including  the  growth  of  digitalisation  and  platforms  active  in  what  is  sometimes  called 
the "gig economy".33  

The  second  problem  that  this  initiative  aims  to  tackle  are  the  inefficiencies  with  the 
existing  framework  for  cooperation  and  exchange  of  information  between  EU  tax 
administrations. On the one hand, there is lack of clarity concerning some provisions of 
the legal text underpinning this framework, in particular when it comes to the concepts of 
foreseeable relevance, group requests and joint audits. On the other hand, there are issues 

32 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation 
and repealing Directive 77/799/EEC, OJ L 64/1.  
33 DAC evaluation, p. 75.  

12 

 
 
                                                 
of  lack  of  effective  monitoring  and  evaluation  by  tax  administrations  on  whether  the 
framework delivers and what its benefits are.  

To illustrate the need for clarification of some concepts: the Directive is built upon the 
concept of foreseeable relevance.34 However, such concept is not defined in the Directive 
and therefore its interpretation is left to each individual Member State, which gives rise 
to some differences in the application of the Directive. The evaluation also shows some 
uncertainty concerning whether the framework permits and if so how to conduct a joint 
audit  (i.e.  two  or  more  tax  administrations  auditing  together)  of  a  taxpayer.  As  said 
above,  another  issue  which  emerged  from  the  evaluation  is  the  need  to  improve  the 
reporting of cooperation activities, so that the effects of the rules can be monitored: this 
means systematically gathering information from the Member States on how they use the 
information they obtain via cooperation and what they use it for.  

In  relation  to  joint  audits,  the  public  consultation  clearly  reflects  the  call  from  the 
respondents to revise the EU legal  framework to  include some more specific details, in 
particular 27 out of 37 answers received in the consultation to the general public confirm 
this support. Furthermore, 21 out of 27 valid replies consider that each joint audit should 
finish  with  a  single  agreed  report  and  the  vast  majority  also  deem  that  the  tax 
administrations participating in the joint audits should be obliged to reach agreement on a 
report (i.e. facts and legal interpretation of facts). 

These  problems  directly  affect  tax  officials  involved  with  administrative  cooperation, 
making  the  latter  not  as  effective  and  efficient  as  it  should  be.  The  lack  of  clarity  and 
certainty  regarding  some  of  the  provisions  of  the  Directive  likely  increase  the 
administrative costs of making use of some of the provisions of the Directive. There are 
also possible opportunity costs. If tax officials, lacking clarity or being unsure concerning 
some  aspects  of  the  framework,  refrain  for  instance  from  asking  tax  information  to 
another  tax  administration,  it  may  be  that  they  miss  the  opportunity  of  gaining  some 
intelligence  relevant  and  useful  for  tax  controls.  Indirectly,  inefficiencies  in  EU  tax 
cooperation may have broader negative effects, putting at risk tax compliance within the 
EU Single Market.  

The  evaluation  of  the  existing  framework  for  cooperation  looked  into  this  problem. 
Foreseeable relevance and requests for information for a group of taxpayers emerged as 
among  the  most  problematic  elements  of  the  framework.  The  evaluation  showed  that 
there is a need to generate better quantitative evidence of the benefits of the intervention. 

2.2. What are the problem drivers? 

The  problems  have  various  drivers  or  causes.  Limited  reporting  of  income  or  other 
earnings gained by third party sellers via digital platforms is the problem. Taxpayers fail 
to "do the right thing" in part because they lack incentives to do so.35 In particular, there 

34  Art.  1  of  the  Council  Directive  2011/16/EU  of  15 February  2011  on  administrative  cooperation  in  the 
field  of  taxation  and  repealing  Directive  77/799/EEC  sets  out:  “This  Directive  lays  down  the  rules  and 
procedures  under  which  the  Member  States  shall  cooperate  with  each  other  with  a  view  to  exchanging 
information that is foreseeably relevant to the administration and enforcement of the domestic laws of the 
Member States concerning the taxes referred to in Article 2.” The concept of foreseeably relevance is not 
defined in the text of the Directive. 
35 Jonathan Shaw, Joel Slemrod, and John Whiting in the Mirrlees review, administration and compliance, 
chapter 12, p. 1126.  

13 

 
                                                 
is  evidence  that  the  probability  of  being  caught  has  a  positive  effect  on  reporting  of 
income36. In many cases, it can be assumed such probability is or is perceived to be very 
low. In other words, it seems that, as noted by the Member States’ experience described 
previously,  those  who  earn  income  via  platforms  perceive  as  unlikely  that  tax 
administrations will find out about such income and therefore do not necessarily report it.  

At the same time, in the digital platform economy, it is not uncommon for sellers to be 
active  on  various  platforms,  leading  to  income  fragmentation,  whereby  such  income 
and revenues remain unreported and undetected by tax administrations. 

The platform economy is by nature digital, and it connects sellers and consumers across 
borders  throughout  the  entire  Single  Market  and  worldwide.  A  platform  operator  can 
connect sellers and consumers located in different countries, even outside the EU. While 
this brings substantial benefits in the Single Market, it also makes it more challenging for 
tax administrations to access the relevant information and might negatively impact on the 
reporting of income. This is because tax administrations have data access powers mainly 
in their own Member State. The word “mainly” is used because, at the EU level, there are 
in place procedures and tools for cooperation and exchange of information between tax 
administrations.37 Yet, these procedures and tools today do not allow for an effective and 
efficient access by a tax administration to information held by platforms located outside 
the Member State of the tax administration.  

Tax  administrations  have  in  several  cases  decided  to  act,  on  their  own,  to  try  to  tackle 
this  problem  by  introducing  national  requirements  for  platforms  to  report  to  tax 
administrations about the income made by sellers on these platforms. Fragmentation may 
result  in  unnecessary  burdens  on  digital  platforms.  The  business  environment  becomes 
more  complicated,  with  various  national  reporting  models,  higher  compliance  and 
administrative costs, without sufficiently tackling the issue.  

According to platforms’ opinion gathered during the 27 February meeting, it is advisable 
to  introduce a single EU framework regarding reporting requirements in  order to  avoid 
the  heavy  administrative  burden  and  compliance  costs  that  economic  agents  such  as 
platforms  have  to  bear  due  to  this  fragmentation  across  Member  States.  Both  targeted 
consultation with Member States and public consultation confirm that such fragmentation 
of the reporting obligations would lead to an undue burden. 

Examples of third party reporting obligations related to platform operators  

Italy: The intermediaries that facilitate accommodation for less than 30 days are obliged 
to report information on sales lessors have gained. In addition to that, the intermediaries 
that intervene in the payment shall withhold a tax of 21 % from rent payments. 

Denmark:  Companies  that  facilitate  rentals  of  housing,  cars  and  boats  are  required  to 
report information on sellers' income to the tax authorities. In return the customers of a 
compliant platform gain a higher deductible amount in their income taxation. The foreign 
platforms are allowed to report as well and thus earn a higher deductible amount for their 
customers.  

36 O’Reilley, P and al., OECD PAPERS 46  – “EOI and bank deposits in international financial  centres”, 
OECD, 2019. 
37  In  particular  in  the  context  of  this  impact  assessment:  Council  Directive  2011/16/EU  of  15  February 
2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, OJ L 64/1.  

14 

 
 
 
                                                 
Spain:  A  reporting  obligation  is  in  force  since  2018  regarding  tourist  rentals.  It  affects 
persons,  whether  resident  or  not,  including  collaborative  platforms,  that  provide  the 
service  of  intermediation  between  landlords  and  tenants  of  properties  located  in  Spain. 
Since  January  2019,  data  are  being  received  on  the  identity  of  the  participants  and  the 
income obtained. Some non-resident entities are filing the return. 

France: Platform operators are obliged to send information on the income generated and 
transactions  carried  out  by  their  users  to  the  tax  authorities.    The  obligation  applies  to 
income  recorded  as  from  1  January  2019  with  the  platforms  having  to  send  this 
information to the tax authorities in 2020. 

In  addition  to  legislative  initiatives,  some  Member  States  have  entered  into  one-to-one 
agreements with digital platform operators. This is the case for example of Estonia. In the 
current  Estonian  model,  the  income  receiver  has  to  grant  approval  to  the  platform  to 
transmit information on their income to the tax administration, which may impact on the 
extent of the reporting.  

Based on the results of the targeted consultation of Member States, twelve of them have 
legislation and/or administrative guidance in place, differing in scope, whereby platform 
operators  would  have  to  report  information  to  tax  administrations  on  sellers  active  on 
their  platform.  Four  more  are  planning  to  introduce  such  legislation  or  administrative 
guidance38. 

38 Further information on an overview of national platforms reporting systems is detailed in Annex 6. 

15 

 
 
 
 
 
 
                                                 
Inefficiencies in the current EU framework for cooperation between tax administrations 
are fostered by different implementation by Member States of what ideally should be 
one  single  EU-wide  rulebook  and  by  different  use  and  treatment  of  information 
exchanged. Any Directive leaves some flexibility to Member States. Yet, this flexibility 
should not lead to ambiguity or lack of clarity. For instance, tax administrations have to 
cooperate  to  exchange  information  that  is  “foreseeably  relevant”  to  the  administration 
and enforcement of taxes.39 Different tax administrations may understand the concept of 
foreseeable relevance differently. The concept is not included in the definitions listed by 
the  Directive.40  Lack  of  clarify  on 
important  concept  poses  a  risk  of 
this 
misunderstanding,  of  delays  in  exchanges  of  information  and,  more  generally,  of 
inefficiencies  in  cooperation.  Similarly,  group  requests,  although  allowed  by  the 
framework  and  carried  out  by  Member  States,  are  not  explicitly  mentioned  in  the 
Directive. To ensure legal certainty, an explicit mention should be included in the text of 
the Directive.  

It may even be the case that due to lack of clarity some tax officers refrain from making 
use of some of the tools of the Directive. In addition to that, today not all Member States 
make  full  use  of  the  information  they  gain  via  administrative  cooperation.  The  recent 
evaluation of the functioning of the Directive showed that only a few Member States are 
capable  of  assessing  the  benefits  of  the  cooperation  under  the  Directive.  Yet,  most 
Member States are not.  

2.2. How will the problem evolve? 

In  the  absence  of  EU  intervention,  the  underreporting  of  income  and  revenues  will 
continue  to  exist,  especially  in  those  Member  States  not  introducing  reporting 
requirements for income and revenue earned via platforms. This leads to tax evasion and 
loss of tax revenues for the national treasuries. As discussed above, it is estimated that 
several  billions  are  lost  every  year  due  to  tax  evasion  by  sellers  in  the  digital  platform 
economy.  Sellers’  income  and  revenues  generated  through  platforms  are  expected  to 
increase  over  time,  due  to  more  digitalisation  of economic  activity.  The  size  of  the tax 
gap will therefore further increase.  

Tax evasion also provides an unfair financial advantage compared to those who play by 
the rules and pay their fair share of tax. This issue was highlighted in the consultation of 
Member States, where more than 80% (18 answers out of 22) confirmed that the lack of 
a  level  playing  field  was  an  issue.  The  public  consultation  confirmed  this  point,  with 
three quarters of the valid respondents41 who consider that the underreporting of revenues 
obtained  through  digital  platforms  negatively  impacts  fair  competition  between  the 
traditional economy and the digital platform economy.  At the meeting held in February, 
platform  operators,  as  key  stakeholders  of  this  initiative,  stressed  the  importance  of 
avoiding distortions of competition by including all platforms, regardless of where they 
are based.  

39 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation 
and repealing Directive 77/799/EEC, OJ L 64/1, article 1(1).  
40 Ibid., article 3.  
41 Note that for each question is computed as valid all replies except from “no answer” ones. 

 
 
 
                                                 
Several Member States have already introduced some form of reporting requirements or 
they  are  considering  doing  so.  In  case  of  several  divergent  reporting  requirements, 
however, the scale of the problem will develop and result in a  more complex business 
environment: for a hypothetical platform operating across 27 Member States, the costs 
of  compliance  with  27  diverse  requirements  would  be  higher  than  having  to  face  one 
standard for reporting. Eventually, this will also create distortions in the Single Market. 
If  a  platform  is  based  in  a  Member  State  without  any  requirement  for  reporting  yet  it 
operates in several other Member States, it may have a competitive advantage vis-à-vis a 
platform  which  provides  the  same  services,  but  based  in  a  Member  State  with  a 
requirement  for  reporting.  More  subtly,  distortions  may  exist  when  the  regulatory 
frameworks differ among them, leading to a different compliance burden, depending on 
the Member State.  

The  public  consultation  reflects  this  concern,  with  more  than  70  %  of  the  respondents 
stating that different national approaches bring undue administrative burden to platforms 
and/or  sellers  due  to  such  differences  between  countries.  The  platforms  have  also 
highlighted this point during the meeting held with them. 

Inefficiencies in the current EU framework for cooperation between tax administrations 
will persist without EU intervention. This can result in a risk of missed opportunities for 
effective administrative cooperation and exchange of information, with a negative effect 
on tax administration and ultimately on tax compliance in the EU.  

17 

 
 
 
 
 
 
3 WHY SHOULD THE EU ACT? 

3.1 Legal basis 

The legal basis of DAC relies on Articles 113 and 115 of the Treaty on the Functioning 
of  the  European  Union  (TFEU),  which  aim  at  ensuring  the  proper  functioning  of  the 
Internal  Market.  Article  113  TFEU  provides  a  legal  basis  for  the  harmonisation  of 
indirect tax systems of Member States, as far as it is needed to ensure the functioning of 
the internal market and to avoid distortion of competition. Article 115 TFEU provides for 
the approximation of such laws, regulations or administrative provisions of the Member 
States which directly affect  the establishment  or  functioning  of the internal  market and 
make the approximation of laws necessary.  

The  aim  is  to  ensure  a  legal  instrument  of  high  quality  for  enhancing  administrative 
cooperation in the field of taxation, in order to allow a smooth functioning of the internal 
market by circumventing the negative effects of tax avoidance and evasion. Applying the 
same conditions, the same methods and the same practices for administrative cooperation 
facilitates the work and efficiency of the authorities in the fight against tax avoidance and 
evasion. 

3.2 Subsidiarity: Necessity of EU action 

As  shown  through  the  consultation  of  Member  States  and  in  the  “Digital  and  Data 
report”,  some  Member  States  have  introduced  provisions  that  create  an  obligation  for 
platforms to report periodically information on the income generated by sellers through 
their  platforms.  Such  reporting  obligations  often  cover  a  selected  set  of  activities,  e.g. 
platforms  that  facilitate  short-term  accommodation  or  transportation  services,  etc.42  
Other Member States have introduced provisions that allow tax authority to issue a notice 
for information  to  a specific platform to  have access  to  information  on the income that 
sellers  have  earned  through  the  platform.  In  some  of  the  countries,  this  request  can  be 
made without performing an audit while in some of the countries such request can only 
be made during an audit. The exact details of information gathering rights vary. 

Based  on  their  current  national  legislations,  some  Member  States  may  not  be  in  a 
position  to  collect  information  about  sellers  that  are  not  resident  in  the  said  Member 
State.  This  is  typically  relevant  for  the  taxation  of  the  accommodation  industry,  where 
taxation rights are usually based on the location of the property (while the owner may be 
resident of different jurisdiction).  

Furthermore, there are uncertainties as to whether domestic legislation applies to, and can 
be  enforced  upon,  businesses  resident  outside  the  jurisdiction,  and  whether  reporting 
obligations  based  on  domestic  legislation  can  be  enforced  to  platforms  that  are  not 
registered nor have a permanent establishment in the regulating jurisdiction.  

The “Digital and Data report” concluded that the legal basis is insufficient for effective 
collection of third party information from platforms within the Member States. In some 

42 Chapter 6 analyses the impact of the intervention and provides more specific information on the sectors 
covered. 

18 

 
 
                                                 
countries,  there  is  no  legislation  for  self-initiated  third  party  reporting  while  in  other 
countries the current state of legislation does not cover all the platforms from where their 
residents  gain  their  income.  A  platform  resident  in  a  country  can  facilitate  the 
transactions that  are relevant  in  another country,  and there is  a risk of non-reporting to 
that country. This is  also one of the main concerns expressed by platform operators, as 
this makes the level playing field in the digital platform sector uneven. 

3.3 Proportionality: Added value of EU action 

Given that there is a necessity to act in response to the problems set out in chapter 2, it 
appears  preferable  to  avoid  a  patchwork  of  reporting  requirements,  unilaterally 
implemented by some or all Member States and across different taxes. The information 
needs  to  reach  the  country  where  the  income  and  revenues  are  due  to  be  taxed.  It  is 
questionable  if  this  could  be  achieved  by  reviewing  27  different  national  reporting 
obligations and possible subsequent alignments. Moreover, as there is a need for a similar 
scope  at  least  concerning  (i)  resident  and  non-resident  digital  platform  operators,  (ii) 
resident  and  non-resident  sellers,  (iii)  content  of  the  information,  and  (iv)  timing  of 
collection  of  the  data,  a  coherent  and  comprehensive  solution  at  EU  level  is  likely  to 
imply  a  relatively  lower  administrative  burden  for  both  tax  administrations  and 
companies. The preferred option has to respect the principle of proportionality, achieving 
the objectives yet minimizing negative consequences on platform operators and sellers on 
these platforms. 

The added value of EU action is broadly confirmed in the public consultation where the 
vast majority of respondents stated that digital platforms should have the same reporting 
obligations  for tax purposes throughout  the EU in  terms  of laying down  a single set  of 
rules. 

19 

 
 
 
 
4 OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1 General objectives 

The initiative aims at ensuring a fair and consistent functioning of the internal market, 
where  everyone  pays  his  or  her  fair  share  of  tax.  In  recent  years,  obtaining  income  or 
revenue through platforms that facilitate the buying and selling of goods and services – 
from  online  marketplaces  to  rental  platforms  –  has  become  commonplace.  However, 
most platforms operate cross-border without physical presence in the market they serve, 
while tax administrations remain confined by their territorial borders. This new business 
model  brings  with  it  benefits  but  also  some  challenges,  in  particular  when  it  comes  to 
taxation. Non-compliance with tax obligations by platform sellers may be deliberate or 
simply result from a lack of knowledge on the applicable tax rules.  

To address  this  challenge, several  Member States have implemented or are planning to 
implement domestic legislation requiring digital platforms to report on income obtained 
by their users. Lack of a level playing field and different reporting requirements imposed 
by  Member  States  at  national  level  may  distort  the  market  allocation  of  services  and 
goods provided via digital platforms and generate substantial costs for tax enforcement.  

Enforcing  legislative  requirements  in  a  highly  digitalised  context  without  international 
cooperation is close to impossible. In the absence of cooperation, any tax administration 
would  have  difficulties  learning  about  the  income  earned  by  local  taxpayers  through 
foreign platforms. In the digital platform economy, the platform operators, the seller and 
the consumer can all be located in different countries. Absent an exchange of information 
across tax authorities, tax administrations will have an incomplete access to information, 
as  shown  by  the  experience  of  some  Member  States  who  have  introduced  domestic 
reporting  requirements.  It  may  also  have  the  perverse  effect  of  encouraging  domestic 
sellers to provide services or sell goods through platforms established in another country.  

Most  platforms  operate  cross-border  with  possibly  no  physical  presence  in  the  market 
they  serve,  and  it  is  costly  and  time-consuming  for  tax  administrations  to  request 
information  on  the  large  and  growing  number  of  transactions  facilitated  by  platforms. 
This impact assessment aims to assess the need to develop a common solution that would 
ensure  all  tax  administrations  in  the  EU  receive  the  information  they  need  to  enforce 
their  tax  laws  and  address  tax  evasion  and  fraud  at  lower  costs  than  in  a  baseline 
scenario.  This  would  simplify  compliance  as  businesses  would  only  need  to  comply 
with one set of reporting obligations across different taxations fields within the EU while 
the relevant taxpayers would be alerted to the existence of tax obligations. 

Secondly,  this  initiative  aims  to  contribute  to  make  EU  tax  systems  fairer, 
safeguarding  Member  States’  tax  revenues.  Fighting  tax  fraud  and  evasion  to  help 
secure national and EU revenues is one of the priorities of the Commission. The political 

20 

 
 
 
 
guidelines of the current Commission calls for stepping up the fight against tax evasion 
to  make  taxation  fairer.43  As  it  emerges  from  the  mission  letter  to  Commissioner 
Gentiloni,  improving  cooperation  between  national  tax  authorities  is  considered  a  key 
way  to  do  so.44  Cooperation  is  particularly  relevant  in  the  context  of  this  initiative,  as 
sellers, users and digital platforms can all be located in different countries.  

Tax fairness lies at the core of this initiative, which is also meant to strengthen citizens’ 
trust  that  everyone  pays  their  fair  share,  as  it  would  address  the  public  concern  that 
income obtained or revenue generated through goods and services offered through digital 
platforms would not be subject to taxation.   

4.2 Specific objectives 

This intervention would aim at ensuring tax administrations have access to the relevant 
information  that  would  allow  them  to  tax  their  tax  residents  and/or,  where  applicable, 
relevant  sources  of  income  and/or  turnover  (e.g.  property  income  “sourced”  from  a 
certain  Member  State),  in  accordance  with  the  applicable  national  rules.  This  would 
enable them to reduce the risk of non-compliance linked with the provision of services or 
sales  of  goods  through  digital  platforms  and  combat  the  perception  that  the  inherent 
income is out of scope of tax rules. 

More  specifically,  the  initiative  is  meant  to  improve  the  ability  of  Member  States  to 
detect and counter cross-border tax avoidance and evasion. As the evaluation of the 
current framework shows, cooperation should be revised, clarified and/or strengthened to 
enhance such ability. The ability is  dependent  on the extent of quality, relevant,  timely 
information Member State have at their disposal. If tax officers have the information they 
need,  at  the  right  time,  to  check  that  platform  sellers  declare  what  they  earn,  it  will  be 
possible for them to control that tax due is actually paid. Not all EU tax officers today do 
have access to such information. Platforms have this information. The intervention would 
require  platforms  to  provide  this  information  to  tax  administrations.  Hence,  it  would 
serve the goal of having a correct administration and enforcement of tax rules across the 
Union.   

In  addition  to  the ability of detecting and  countering  cross-border tax evasion  or fraud, 
this initiative aims also at specifically having a deterrent effect. There is evidence that 
taxpayers  respond  to  the  probability  of  being  caught  cheating  on  their  taxes,45  and  that 
automatic  exchange  is  the  most  effective  tool  to  foster  voluntary  compliance46.  The 
initiative is meant to deter EU taxpayers from not paying the taxes due, and preventing 
the test and trial approach  – not  declaring  and see what  will happen. By  increasing the 
probability of detecting non-compliance, the initiative is meant to provide an incentive to 
“do the right thing” and declare and pay taxes owed.  

43 See: A Union that strives for more, - Political guidelines for the next European Commission 2019-2024 
44 See:  Mission letter to the Commissioner-designate for Economy, 10 September 2019  
45 Jonathan Shaw, Joel Slemrod, and John Whiting in the Mirrless review, administration and compliance, 
chapter 12, p. 1126.  
46 Beer, S, Coelho, M. and Leduc, S., “Hidden Treasures: the impact of automatic exchange of information 
on cross-border tax evasion”, IMF working paper, WP/19/286  
O’Reilly,  P,  Parra  Ramirez,  K,  Stemmer,  Michael,  “Exchange  of  information  and  bank  deposits  in 
international financial centres”, OECD working papers no.46, 2019 

21 

 
 
 
                                                 
5 WHAT ARE THE AVAILABLE POLICY OPTIONS?   

Designing  an  effective  and  efficient  solution  to  the  problem  is  challenging.  There  are 
different options. At the highest level of analysis, a choice is due between the status quo 
or baseline and a scenario where the Commission would act, either in a non-regulatory or 
a  legislative  manner.  The  legislative  option  in  itself  opens  up  several  sub-options, 
depending on the design choices, not mutually exclusive, for the instrument. This chapter 
describes the options identified, one by one.  

5.1 - Baseline  

Under this option, the EU would not act. However, other actors, namely Member States 
as  well  as  the  OECD,  would  still  act.  As  discussed  in  chapter  2  above,  some  Member 
States  have  already  acted  to  address  the  problem,  by  implementing  national  measures, 
which vary in scope and administrative requirements.  

The OECD is working on the development of model rules intended to impose reporting 
obligations  on  digital  platforms.  At  a  first  stage,  this  framework  will  only  encompass 
certain services intermediated by platforms, but there is a strong commitment to expand 
the scope of the model rules to  encompass other services and the sales of goods. More 
precisely,  the  services  currently  in  scope  are:  rental  of  immovable  income;  personal 
services,  which  are  meant  to  include  services  involving  personally-performed  time  or 
task  based  activities  for  the  benefit  of  a  user,  including  transportation  and  delivery 
services.  The  model  rules  include  an  obligation  for  platform  operators  to  collect  and 
verify certain information, with a view to correctly identify the seller, the jurisdiction of 
tax  residence  and  ensure  that  tax  administrations  are  able  to  match  the  seller  to  a 
taxpayer.  

The decision on the implementation of such rules will however be left to each individual 
country, as they will not be considered as a minimum standard, i.e. their implementation 
will not be deemed as mandatory. 

5.2  -  EU  non  legislative  intervention  to  recommend  the  implementation  of  a 

global standard  

Under this option, the Commission could propose a Recommendation to Member States 
to  implement  consistent  rules  addressing  the  challenge  presented  by  the  taxation  of 
income  or  revenue  generated  by  third  party  sellers  through  digital  platforms.  Such 
Recommendation  would  call  on  Member  States  to  implement  the  international  rules  as 
developed  by  the  OECD  and  –  to  the  extent  needed  –  be  complemented  by  guidance 
adapting such rules for the internal market.  

5.3 – EU legislative intervention  

A  legislative  option  implies  a  legally-binding  framework  to  encompass  reporting  by 
digital  platform  operators  and  the  exchange  of  such  information.  This  would  be  made 
possible  through  a  legislative  modification  of  the  existing  administrative  cooperation 
framework.  This  option  would  make  digital  platform  operators  subject  to  reporting 
obligations under the DAC, requesting them to  collect information on registered sellers 
and report such information to the tax authority.  

22 

 
 
In practice, the obligations that would fall on digital platforms under the DAC would, in 
general,  be  similar,  albeit  simplified,  to  the  ones  imposed  on  EU  financial  institutions 
under the same directive. Those would mainly consist in identifying the relevant taxpayer 
and  respective  Member  State  of  tax  residence,  on  the  basis  of  relevant  pre-established 
information  as  prescribed  in  the  legal  text47,  and  collect  and  report  information  on  the 
income obtained by each taxpayer through the platform.  

Figure 3 Overview of Reporting Mechanism 

Platform 
operator in MS A 

•collects information 

on sellers 

•sends it to domestic 

(MS A) tax 
administration  

MS A 

• sorts information per 
MS of residence and 
sends it to MS where 
seller is tax resident 

MS of residence 
of seller 

•compliance activities 

Under this option, the EU would intervene to  regulate the adoption of the international 
approach  to  exchange  of  information  on  income  and  revenue  generated  through  digital 
platforms, building on the work of the OECD. The analysis will focus on the following 
building blocks when determining the possible approach:  

Figure 4 Building Blocks  

what is in 
scope 

who should 
report 

reportable 
taxpayers 

practical 
aspects 

5.3.1 - Relevant activities   

The  activities  facilitated  by  digital  platforms  vary  significantly.  They  include  a  whole 
range of activities from rental of immovable property, professional and other on-demand 
services, to transportation services and online marketplaces. To ensure that any reporting 
requirements are efficient and applied consistently throughout the EU, a clear definition 
of the activities in scope is needed.  

47  The  identification  and  tax  residence  of  each  seller  is  established  based  on  standardised  processes  for 
gathering  and  reporting  information,  set  forth  in  the  legislation,  with  a  view  to  ensure  that  all  platforms 
follow  broadly  the  same  procedures.  In  particular,  the  legislation  would  signal  the  pieces  of  information 
that  would be relevant e.g.  for the establishment of the tax residence of the  seller. In case the legislative 
approach is taken, this procedure would build on the procedure adopted at international level, to minimise 
the administrative burden for both economic operators and administrations. 

23 

 
 
 
 
 
 
                                                 
Options under consideration: 

 Table 1  Options under Consideration: Scope 

Limited scope - Selected services  

•The following services would be in scope: 
•Rental of immovable property 
•Transportation 
•Other personal services, which are meant to include services involving personally-performed 
time or task based activities for the benefit of a user, including delivery services. 
•If such an approach is taken, the set of services in scope would correspond to the 
international approach as currently being discussed at OECD level 

Intermediate scope - All services provided via platforms 

•Besides the services listed in a), there are other types of services being provided which may 
prove relevant for tax authorities, such as crowdfunding (e.g. peer-to-peer lending services 
delivered digitally)  
•Including all services prevents reclassification of one service into another, given the blurred 
lines between some types of services and their definition. 

Full scope - All services and sale of goods 

•The final option would be to include also sales of goods in the scope of the exchange 
framework.  
•Different considerations may impact the information to be reported by the "goods" sector. 
Nevertheless, it is a sector which has presented a rapid growth in the last few years, which 
requires its analysis for the purposes of this cooperation framework.  
•It should be clarified that, within this option, only digital platforms facilitating the connection 
between sellers of goods and services and users looking to purchase such goods and services 
(digital marketplaces) are included. It does not include platforms which sell such goods and 
services in their own name. 

At the OECD level, various options have been considered for the scope of activities that 
the international standard would need to cover. It is expected that the activities in scope 
will in a first stage be limited to some categories of services provided via platforms (see 
“limited scope” option above) but might be expanded in a second stage.  

5.3.2 - Who should report: Reporting Platforms  

This section aims at determining upon whom shall befall the obligation to report to EU 
tax  authorities.  The  determination  of  the  platforms  in  scope  is  intrinsically  linked  with 
the  scope  of  reporting,  discussed  in  5.3.1.  Beyond  such  considerations,  two  other 
questions arise in connection to the obligation to report to the tax authorities.  The first 

24 

 
 
 
 
 
 
sub-options  allow  to  take  into  account  the  fact  that  reporting  requirements  may  have  a 
different impact (in terms of administrative burden), depending on the size and the years 
of  operations  of  the  platforms.  The  second  set  of  sub-options  focus  on  the  extra-
territoriality,  i.e.  the  fact  that  platforms  do  not  need  to  be  based  in  the  EU  to  connect 
sellers and users in the EU.  

Table 2 Considerations on Platforms 

Inclusion of 
possible 
exemptions 
from reporting 
obligations for 
platforms 

Territorial scope 
of the 
obligation. 

No exemption  - all platforms which facilitate the transactions within the scope should 
report  

Exemption based on threshold – platforms with revenues and years of existence below a 
certain threshold would be exempted from reporting. This is the option put forward for 
public consultation by the OECD for the model rules – reporting exemption for platforms 
the revenue of which does not exceed € 100.000, for a period of 3 years. 

Only platforms established in the EU should be subject to reporting obligations 

All platforms active in the EU should report, regardless of whether they are EU-based or 
operating from outside the EU. 

OECD  countries  are  expected  to  reach  an  agreement  on  a  relatively  broad  scope  of 
reporting  platforms,  for  the  activities  covered.  The  public  consultation  raised  questions 
about some possible exclusions, but discussions are ongoing at the time of writing.   

5.3.3 - Platform sellers (reportable taxpayers) 

As for the platforms in scope, the determination of the sellers in scope (i.e. taxpayers on 
whom  information  will  be  collected  and  reported  by  the  relevant  platforms)  will  be 
intrinsically linked with the scope of reporting. 

Similarly,  beyond  these  consideration,  the  extent  of  the  reporting  requirements  is  also 
influenced by the number of sellers upon which platform operators need to report. In that 
respect, the first option deals with possible exclusions based on the limited tax revenue 
impact, while the second set of options looks at the territorial dimension of the reporting. 
The  following  options  therefore  need  to  be  considered  when  designing  reporting 
obligations: 

25 

 
 
 
 
 
 
 
 
Table 3 Possible Exemptions for sellers 

Possible 
exemptions 
for sellers 

No exemption – digital platforms should report on all sellers regardless of the 
number and value of the transactions 

Exemption linked to a monetary threshold for each of the sellers, so that platforms 
would not have to report on those registered sellers falling below that threshold 

Exemption linked to a combined monetary and transaction threshold 

Transactions 
to be reported 

Only cross-border transactions would fall in scope of the rules, i.e. transactions 
involving 2 or more Member States. 

All transactions taking place within the EU, which would imply that platform 
operators would report on all transactions linked to a reportable seller, regardless 
of whether they involve different Member States or were purely domestic.  

At the OECD level, discussions are ongoing at the time of writing on possible exclusions 
for certain sellers, on the basis of certain criteria. While the content of these discussions 
is confidential and a conclusion still to be reached, it should be noted that the version of 
the  OECD  standard  published  on  19  February  2020  envisaged  exclusions  for  large 
lessors, sellers the stock of which is traded in securities market as well as for government 
entities.48   

5.3.4 - Practical aspects – how the exchanges should take place  

Three considerations are in order when designing an exchange framework: 

i.  How the exchanges should take place 

a.  Spontaneous exchanges. 
b.  Automatic exchange of information (once a year).49 

ii.  Dataset  

iii.  Data checks  

Within  the  framework  of  the  ‘Digital  and  Data’  group  led  by  Member  States,  later 
complemented by the discussions at Working Party IV, consensus has been reached that 
the following set of data would be indispensable to ensure the effectiveness of the system 
and that the information could reliably be used for taxation purposes: 

48 OECD. (2020). Public Consultation document on the “Model Reporting Rules For Sellers In The Sharing 
And  Gig  Economy”, 
from:  http://www.oecd.org/tax/exchange-of-tax-information/public-
consultation-document-model-rules-reporting-platform-operators-with-respect-sellers-sharing-gig-
economy.pdf , p. 15.  
49 Automatic exchange means the systematic communication of predefined information to another Member 
State, without prior request, at pre-established regular intervals. Reference: Council Directive 2011/16/EU.  

retrieved 

26 

 
 
 
 
                                                 
Table 4 Dataset 

Platform data 

• name,  
• registered office address 
• TIN 
• business name 

seller information 

• individual 

• the first and last name;  
•  the Primary Address;  
•  any TIN issued to the Seller, including each jurisdiction of issuance; 
• the VAT identification number of the Seller, when available;  
• place of birth 
•  the date of birth.  

• entity 

• the legal name;  
• the Primary Address;  
• the VAT identification number of the Seller, when available;  
• any TIN issued to the Seller, including each jurisdiction of issuance; and 
• in absence of the TIN, the business registration number.  

• jurisdiction of tax residence 
• account number or equivalent to which the amount was paid 
•  the name of the holder of the financial account to which payments are made, if available  

transaction information 

• total amount paid (aggregated - note: the reason for aggregation lies in the fact that direct tax operates typically on the basis 

of annul income, hence transaction-level reporting of amount is not needed)  

•  fees, commissions or taxes withheld or charged (aggregated)  
• number of transactions 
• for rental income: 

•  address and land registration number of each Property Listing 
•  number of days each property was rented and the type of property (availability) 

In practice, under this option, the EU would expand the scope of automatic exchange of 
information to cover income or revenues earned through digital platforms.  

The effectiveness of any system for exchange of information is dependent on the quality 
of the information which is passed through it.  Data supplied by platforms should be of 
high  quality:  accurate,  valid  and  reliable.  However,  it  is  important  to  apply  the  basic 
principle of proportionality in designing the rules that platforms would have to follow for 
checking  data,  to  avoid  imposing  an  excessive,  unreasonable  burden  on  economic 
operators.  The  option  of  the  EU  legislative  intervention  will  include  a  due  diligence 
procedure.  

5.4  –  Follow  up  to  the  DAC  evaluation:  Strengthening  administrative 

cooperation   

To contribute to the achievement of the objectives, and building upon the findings of the 
DAC  evaluation,  the  legislative  option  would  also  cover  minor  fixes  to  the  current 
administrative  cooperation  framework  to  ensure  it  becomes  more  effective.  These 
changes to  the framework mainly  concern:  a  clarification of the  concept  of foreseeable 
relevance;  explicitly mentioning that group requests for information  are in  scope of the 
directive and joint tax audits are possible under the directive.  

Foreseeable  relevance  is  an  overarching  concept  in  administrative  cooperation  for  tax 
purposes,  which  imposes  that  any  information  requested  under  this  directive  must  be 

27 

 
 
 
 
directly  or  indirectly  linked  with  the  tax  affairs  of  a  given  taxpayer.  Although  the 
reference is made explicitly in article 1 of the Directive, there is no explanation of further 
clarification of the concept at this stage. 

Group  requests  are  requests  for  information  concerning  more  than  one  taxpayer.  This 
means that tax authorities are able to ask for information on a group of taxpayers, without 
naming them individually. A detailed description of the group of affected taxpayers with 
a clear and fact based justification on the grounds that the taxpayers falling in the group 
are generally deemed not tax compliant is required.   

5.5 - Options discarded at an early stage 

Some  of  the  options  highlighted  above  were  considered  as  not  a  viable  way  forward, 
either  because  there  was  no  deemed  added  value  or  because  experience  with  similar 
approaches has proven ineffective in the past: 

Table 5 Options Discarded 

Section   Explanation 

5.2 

Option 
discarded 
Non-
legislative 
approach 

This option would bring no added value as the OECD 
framework would be developed and Member States that 
would wish to do so would implement the framework. A 
Commission Recommendation would bring no added value as 
it would not be legally binding, hence it would not address the 
issue of fragmentation of reporting requirements across the 
EU. In particular, it would still be for each Member State to 
decide on the introduction of such requirements and on their 
precise scope. In addition, the difficulty of enforcing domestic 
legislation vis-à-vis platforms resident in another jurisdiction 
would not be addressed. 
Excluding sellers from the scope of the initiative based solely 
on a monetary threshold would lead to an easy circumvention 
of the rules. There exist different platforms that allow sellers 
to provide a given service or sell goods. Sellers who do not 
want to see their revenues and income reported could easily 
split transactions and activities across several platforms to 
remain under the threshold. This would clearly defeat the 
objective of such reporting requirements. 
Past experience shows that spontaneous exchanges (i.e., 
situations where each Member State sends without prior 

28 

5.2 

Monetary-
based 
exemption for 
sellers 

Method and 
timing for the 

5.3.4 

 
 
exchanges – 
Spontaneous 
exchanges 

request information to another Member State which could be 
of relevance to the latter) are not effective.50 The lack of 
enforcement of such an approach led to the development of 
the automatic exchange of tax rulings. More recently, 
automatic exchange was also chosen as the preferred option 
for the exchange of country-by-country reports and exchange 
of potentially aggressive tax schemes.  

50  As  put  by  one  Member  State  replying  to  the  targeted  consultation:  “(…)  Spontaneous  exchange  of 
information and/or exchange of information on request are not suitable for mass-scale annual exchange of 
information.”  

29 

 
 
                                                 
6 WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

6.1 Overview of options  

As a result of the analysis above, the following two options have been shortlisted:  

A.  Baseline  scenario.  In  a  baseline  scenario,  the  EU  would  not  intervene.  The 
Member States which have already introduced measures to have an exchange of 
data  from  platforms  to  tax  administrations  will  keep  those  measures.  It  is 
unlikely, however, that the regulatory landscape would remain fixed as it is today. 
It is expected that the OECD would adopt model rules for data exchange by mid-
2020.  The  scope  of  the  OECD  work  is  limited  to  rental  of  immovable  property 
and  “personal  services”.  These  rules  are  not  expected  to  become  a  minimum 
standard  and  therefore  implementation  by  jurisdictions  is  not  mandatory.  Based 
on  the  forthcoming  OECD  model  rules,51  some  Member  States  would  probably 
adapt  their  national  measures  to  align  with  the  OECD  model  or  introduce 
measures.  However, they are likely to differ in terms of scope and requirements.  

B.  EU legislative intervention. Choosing this option, the EU would introduce a legal 
instrument to implement in a common manner across the Member States a system 
to  set  up:  first,  reporting  from  platforms  to  tax  administrations  and,  secondly, 
communication  /  exchange  of  these  reports  between  tax  administrations.  The 
design  of  the  intervention  may  differ  mainly  in  terms  of  relevant  activities,  as 
well  as  reportable  platforms  and  reportable  sellers.  The  figure  below  recalls  the 
various relevant activities considered.  

Figure 5 Scope of Options 

Limited scope:  

Platforms facilitating services 
of accomodation, transport 
and other on-demand 
services 

Intermediate scope: 

Services included in the 
limited scope as well as 
finance services 

Full scope: 

Intermediate scope as well as 
platforms facilitating sales os 
goods 

51 OECD, 2019, Model Rules  for Reporting by Platform  Operators  with respect to Sellers in the Sharing 
and Gig Economy. The draft standard (model rules) is online at :  
http://www.oecd.org/tax/exchange-of-tax-information/public-consultation-document-model-rules-
reporting-platform-operators-with-respect-sellers-sharing-gig-economy.pdf   

 
 
 
 
                                                 
Any intervention would, at a minimum, take into account the framework being discussed 
at international level, as developed by the OECD. The other options under analysis build 
on the international approach but extend the scope of activities (and as a consequence of 
platforms  and  sellers)  covered.  In  addition,  with  this  option  there  would  also  be  a 
strengthening of administrative cooperation more broadly.  

6.2 Economic impacts 

There is a lack of official statistics on platforms and on transactions facilitated through 
these  platforms.  This  prevents  us  to  reliably  estimate  the  economic  impacts  of  the 
intervention. However, we try to estimate as much as possible both the benefits and the 
costs of the measure on the basis of sound assumptions and extrapolations from available 
data. These estimates should be taken as a best effort by Commission services to try to 
assess the most significant impacts of the initiative.  

6.2.1 Benefits 

Reduced costs of enforcing tax laws  

The initiative addresses the high cost of gathering information useful to enforce tax laws 
in  a  baseline  scenario.  The  latter  is  characterised  by  limited  cooperation  and  lack  of  a 
common  EU  standard  for  information  gathering  and  exchange.  The  assumption  is  that, 
for a tax administration, there is a cost involved in obtaining information. Following the 
Standard  Cost  Model,  such  cost  can  be  thought  as  being  dependent  on  two  main 
variables: the cost of performing a certain activity (price, or P), and the frequency of such 
activity (quantity, or Q), dependent on the number of sellers (s) for which information is 
needed. The costs for gathering information in a baseline scenario can be defined as:  

𝐶𝑜𝑠𝑡𝑠 (𝑏𝑎𝑠𝑒𝑙𝑖𝑛𝑒) = 𝑄𝑠 ∗ 𝑃(𝑏𝑎𝑠𝑒𝑙𝑖𝑛𝑒) 

The  costs  in  a  baseline  scenario  are  assumed  to  be  higher  than  the  recurrent  costs  of 
gathering information for tax enforcement, once the intervention is implemented. As will 
be shown in section 6.2.2, estimating the costs of the intervention is feasible, on the basis 
of  extrapolations  of  cost  estimates  for  automatic  exchange  of  information  of  financial 
accounts. Taking the estimates of recurrent costs of the intervention as starting point, it is 
possible to illustrate the fundamental point that the initiative aims to achieve a situation 
where:  

𝐶𝑜𝑠𝑡𝑠(𝑖𝑛𝑡𝑒𝑟𝑣𝑒𝑛𝑡𝑖𝑜𝑛) < 𝐶𝑜𝑠𝑡𝑠 (𝑏𝑎𝑠𝑒𝑙𝑖𝑛𝑒)  

This  is  due  to  a  lower  cost  of  gathering  information  per  seller  (P),  due  to:  first,  the 
introduction of a requirement for platforms to report certain tax-related information about 
sellers’  transactions.  Second,  a  mechanism  for  cooperation  between  national  tax 
authorities so that information can reach the tax administration where the seller(s) have to 
pay taxes.  

Taking into account  uncertainty on the actual  size of the benefits  due to  lower costs of 
obtaining  information  under  the  intervention,  no  quantification  of  these  benefits  is 
provided.  The key message is that one benefit of the initiative will be lowering the high 
cost  of  enforcing  tax  law  compared  to  a  baseline  scenario,  thanks  to  standardisation, 

31 

 
 
reporting by platforms and cooperation (automatic exchange of information) between tax 
administrations. Reducing the costs of gathering information is a clear expected benefit 
which should be taken into consideration by decision-makers.   

Impact on tax revenues  

A  key  aim  of  the  initiative  is  preventing  tax  evasion  on  transactions  through  digital 
platforms.  Income  and  revenues  earned  through  the  digital  platform  economy  are 
currently  under-reported,  as  discussed  in  chapter  2.  Better  reporting  and  exchange  of 
information  should  therefore  have  a  positive  impact  on  the  revenues  collected  by  tax 
administrations.  

Methodology to estimate the impact of the intervention on tax revenues 
Currently, there is no publicly available administrative data on the size and distribution 
of the revenues and transactions occurring on digital platforms. There are several reasons 
for this lack of data. First, there are different reporting requirements across jurisdictions, 
with several jurisdictions imposing little to no such requirements. Second, many digital 
platforms  are  privately  held,  so  they  do  not  have  to  make  public  their  annual  financial 
reports.  Even  among  listed  companies,  there  is  no  requirement  to  make  the  amount  of 
transactions and revenues publicly available on a country-by-country basis, which further 
limits the ability to estimate the size of the platform economy and the size of the tax base 
currently escaping taxation.  

With these caveats in mind, we can calculate bounds of the effect of the initiative on tax 
revenues. 

Under the regulatory option, the additional tax revenues can be estimated by multiplying 
the following terms: the total value of the European transactions facilitated in each sector 
(V), the percentage of those transactions that represents taxable revenue (y), the average 
tax rate (t) and the percentage of revenue that is currently not reported, but would be as a 
result of the implementation of the option (p): 

𝐴𝑑𝑑𝑖𝑡𝑖𝑜𝑛𝑎𝑙 𝑡𝑎𝑥 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 = 𝑉 ∗ 𝑦 ∗ 𝑡 ∗ 𝑝 

Five  main  sectors  are  considered  in  the  calculation  of  tax  revenues  arising  from  each 
option  under  study.  Four  are  service  sectors  -  accommodation,  transport,  (peer-to-peer) 
finance, other on-demand services (professional and household services) - and one is the 
goods  sector52.  This  scope  is  also  in  line  with  other  studies  commissioned  by 
international  organisations,  such  as  European  Commission  (2017)53,  European 
Commission (2018)54, Vaughan and Daverio (2016) and OECD (2019). 

Table  6  offers  an  overview  of  the  policy  options  included  in  the  calculation  of  tax 
revenues and the sectors covered by each option. The last column of Table 7 includes the 

52 For goods, the computations cover platforms which enable peer-to-peer transactions. 
53 European Commission (2017).  Exploratory Study of Consumer Issues in Online Peer-to-Peer Platform 
Markets. Retrieved from: https://ec.europa.eu/info/sites/info/files/annex1_task1_reportmay2017.pdf 
54  European  Commission  (2018).  Study  to  Monitor  the  Economic  Development  of  the  Collaborative 
Economy  at  Sector  Level  in  the  28  Member  States.  Retrieved  from:  https://op.europa.eu/en/publication-
detail/-/publication/0cc9aab6-7501-11e8-9483-01aa75ed71a1/language-en/format-PDF 

32 

 
 
                                                 
methodology  used  to  estimate  the  value  of  transactions  in  each  sector.  These 
computations  assume  that  there  is  no  exclusion  in  terms  of  reportable  sellers  and 
reportable platforms. 

Table 6 Overview of options covered, in terms of scope of reporting 

Sector 

Included in which option? 

1. Accommodation 
2. Transport 
3. Other  
on-demand services 

Limited 
scope 
+ 
+ 
+ 

4. Finance 

5. Goods 

Intermediate 
scope 

+ 
+ 
+ 

+ 

Full 
scope 
+ 
+ 
+ 

+ 

+ 

to 
Method 
additional tax revenues  
(V, own estimate) 

estimate 

Extrapolate V from largest 
platform on the market 
Midpoint of updated 
Vaughan and 
Daverio (2016) and 
European Commission 
(2018) 
Updated Zhang et. al. 
(2016)55 
Updated European 
Commission (2017) 

Total transaction value (V) 
The table below compares the estimates of V, the total value of platform transactions in 
each sector, using various methodologies. Column 1 shows the estimates obtained using 
the own methodology (explained in more detail in Annex 4), while columns 3-4 show the 
updated values in previous studies from the European Commission.56 

for 

55 Zhang, Bryan, Ziegler, Tania, Burton, John, Garvey, Kieran, Wardrop, Lui, Alexis, and James Alexander 
(2016). Sustaining Momentum – The 2nd European Alternative Market Finance Industry Report. Cambridge 
from: 
Centre 
https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2016-
european-alternative-finance-report-sustaining-momentum.pdf  
56  Note  that  for  accommodation,  the  upper  bound  is  set  to  €  15.3  billion,  the  estimate  using  the 
methodology  in  this  report,  rather  than  €23.2  billion  as  in  our  updated  calculations  using  Vaughan  and 
Daverio (2016). The latter value was considered implausibly high, as it is almost 150% of the lower bound 
and the report does not include a detailed description of the methodology. 

Alternative 

Retrieved 

Finance. 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Table 7 Estimated total value of transactions facilitated by platforms in the EU-27 in 2018, by sector (€ million) 

Estimates of transaction values (V), by sector57 

Sector 

Own 
estimate 

Vaughan and 
Daverio (2016)* 

Accommodation 
Transport 
Other on-
demand 
services 
Finance 
Total services 
Goods 
Total goods and 
services 

15 272 
6 303 

6 137 
6 638 
34 351 
20 713 

55 064 

23 223 
5 124 

4 499 
7 301 
40 146 
. 

European 
Commission 
(2018)* 
9 356 
3 600 

European 
Commission 
(2017)** 
. 
. 

7 776 
11 232 
31 964 
. 

. 
. 
. 
17 155 

. 

Note: * = values have been updated to reflect 2018 values, assuming an annual growth rate of 20%. Also, 
original values were updated to calculate EU-27 aggregates rather than EU-28. ** = The estimate includes 
only goods transacted in a peer-to-peer regime and it has been updated assuming a growth rate of 12%. 

It is estimated that the total value of services transacted on digital platforms in 2018 
in  the  EU-27  was  EUR34.4  billion,  while  the  total  value  of  goods  transacted  on 
online peer to peer platforms was EUR 20.7 billion. The value for transactions in the 
service  sector  is  the  sum  of  four  components:  accommodation,  transport,  finance  and 
other on-demand services. For the first two, the total size of transactions was estimated 
using  the  methodology  described  in  Annex  IV.  For  the  last  two  sectors,  an  assumed 
yearly growth rate58 of 20% was used to update the values found in Vaughan and Daverio 
(2016)  and  European  Commission  (2018)  to  represent  the  year  2018.  Then,  the  two 
estimates  were  averaged  to  obtain  the  value  shown  in  column  1  of  Table  7.  The  total 
value  of  goods  transacted  on  peer-to-peer  digital  platforms  was  found  by  updating  the 
value found in European Commission (2017) with a 12% yearly growth rate59.  

57 Each column in Table 8 uses a different methodology and relies on unofficial data. Second, the studies 
from Vaughan and Daverio (2016) and European Commission (2018) refer to data  from 2015 and 2016. 
Given  the  rapid  growth  of  these  sectors,  the  growth  rate  of  20%  could  underestimate  the  total  value  of 
transactions  that  occurred  in  2018,  explaining  some  of  the  discrepancies  between  our  estimate  and 
European  Commission  (2018).  Third,  these  studies  cover  different  service  sectors,  so  the  total  service 
market  will  vary  accordingly.  Fourth,  the  estimates  of  European  Commission  (2018)  use  very  low 
estimates of the average daily rate in peer-to-peer accommodation. 
58  The  20%  growth  rate  could  be  a  significant  under-estimation,  as  the  compound  average  growth  rate 
implied by Vaughan and Daverio (2016) for 2013-2015 is 62%.  However, such growth rates usually occur 
only  in  very  young  industries:  as  the  industry  matures,  the  growth  rates  decrease.  For  instance,  Statista 
(2019b) expects the European ride hailing market is expected to increase by 13.5% per year in 2018-2023 
in Europe, compared to global year-on-year gross bookings growth rate of 30.5% for Uber in 2018-2019. 
For this reason, we assumed a conservative rate of 20% before 2015 and a smaller rate after 2015.  
59  This  is  the  medium-growth  scenario  used  in  European  Commission  (2015).  Source:  European 
Commission  (2015).  VAT  Aspects  of  Cross-border  E-commerce  -  Options  for  Modernisation.  Retrieved 
from:  
https://ec.europa.eu/taxation_customs/sites/taxation/files/vat_aspects_cross-border_e-
commerce_final_report_lot1.pdf 

34 

 
 
 
 
 
 
 
  
  
                                                 
Accommodation, transport and finance are the largest service sectors of the digital 
platform  economy,  within  the  limitations  considered  in  the  estimates  made  here, 
with  total  EU-27  transactions  in  2018  amounting  to  EUR  15.3  billion,  EUR  6.3 
billion  and  EUR  6.6  billion,  respectively.  There  are  however  large  differences  in  the 
estimates for the value of transactions, especially for accommodation, which stem from 
different methodologies.  

While  not  being  directly  related  to  this  impact  assessment,  the  discrepancies  in 
estimating the size of the platform economy confirms the importance of improving 
statistical analysis of the platform economy.60 Given the double-digit growth rates in 
some of the sectors, goods and services provided by sectors are expected to become an 
increasingly  important  source  of  value-creation  and  employment.  This  could  warrant 
monitoring by national governments for administrative reasons other than taxation, such 
as  assessing  participants’  labour  market  status,  or  for  assessing  social  security 
requirements. 

Effects on tax revenues: Summary of Analysis 
In order to calculate the total tax revenues resulting from the application of the regulatory 
option  to  various  scopes  of  activities,  we  need  to  estimate  y,  the  total  percentage  of 
transactions that represents taxable income, the average tax rate  t and p, the fraction of 
income currently not reported to tax authorities.  

Table 8 Estimate of unreported tax revenues in EU-27, per sector 

Sector 

Value of tax revenues resulting from AEOI 
High transaction 
estimate V 

Low transaction estimate 
V 

t = 20% 

t = 40% 

t = 20% 

t = 40% 

y 
(taxable 
income,  
percent) 

1  Accommodation 
2  Transport 
3  Other on-demand 

services 
4  Finance 
5  Sale of goods 

608 
234 

292 
166 
1 346 

12 16 
468 

585 
332 
26 93 

993 
410 

505 
281 
1 346 

1 985 
819 

1 011 
562 
2 693 

65% 
65% 

65% 
25% 
65% 

By  its  very  nature,  it  is  difficult  to  estimate  the  level  of  underreporting.  It  is  therefore 
assumed that the percentage of income not reported (p), is 50% for all sectors. This is in 
line with  the insights  from  the “Digital  and Data” report61 and Kleven, Khan and  Kaul 
(2016)62,  who  estimate  that  as  the  fraction  of  self-employed  individuals  “approaches  1 

agreement  with 

60  To  improve  statistical  analysis  of  platforms,  in  March  2020  the  European  Commission  reached  a 
sharing: 
four 
landmark 
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/CN-20200305-1  
61 Tax Administration EU Summit - TADEUS   
https://ec.europa.eu/taxation_customs/business/vat/tax-administration-eu-summit-tadeus_en  
62 Kleven, Henrik, Khan, Adnan and Kaul, Upaasna (2016). Taxing to Develop: When Third-Best is Best. 
International  Growth  Centre,  retrieved  from:  https://www.theigc.org/reader/taxing-to-develop-when-third-
best-is-best/overcoming-barriers-to-tax-policy-enforcement-requires-greater-access-to-information/ 

collaborative 

economy 

platform 

data 

on 

35 

 
 
 
 
 
 
 
 
                                                 
(…)  evasion  rates  could  be  as  high  as  50%”.  In  these  sectors,  the  percentage  of  self-
employed is very high, so non-reporting could also be very significant.  

The fraction of transactions that represent taxable income, y, is taken to be 65% for the 
following  sectors:  accommodation,  transport,  on-demand  household  and  professional 
services  and  goods.  This  is  the  mid-point  of  the  range  considered  by  the  “Digital  and 
Data” project. The rest of the income could be fees paid to the platform itself, or other 
deductible  operating  costs.  For  (collaborative)  finance,  y  is  taken  to  be  25%,  as  the 
income in this sector is represented by interest payments, rather than the principal63. 

The  tax  rate,  t,  is  calculated  using  a  lower  bound  of  20%,  which  is  in  line  with  the 
average EU effective average corporate income tax rate in 2018 (European Commission, 
2019f)64 and an upper bound of 40%, which is closer to the EU implicit tax rate on labour 
in 2017 (European Commission, 2019b).  

Implementing  the  limited  scope  would  logically  yield  the  smallest  tax  revenues 
(between  EUR  1.1  and  3.8  billion),  as  it  would  be  applied  to  a  subset  of  activities, 
whereas  the  full  scope  option  (goods  +  all  services)  would  yield  the  largest  tax 
revenues (between EUR 2.7 billion and EUR 7.1 billion). By comparison, the total tax 
revenue  arising  from  direct  taxes  was  EUR  1.7  trillion  in  2017  in  the  EU-27,  which 
means that the additional tax benefits would vary between 0.07% (limited scope, lowest 
estimate) and 0.41% (full scope, highest estimate) of total direct taxes. The table below 
offers  an  estimate  of  the  lower  and  upper  bounds  of  the  effects  that  each  option  could 
have on tax revenues in the EU. 

Table 9 Estimate of EU-27 tax revenue effects of each option, 2018 vs 2025 (yearly, million €) 

Scope 

Sector Covered 

Yearly tax revenues - bounds (€ million) 

Limited 

Intermediate  

Full 

1+2+3 

1+2+3+4 

1+2+3+4+5 

2018 

2025 

Low 

1 135 

1 300 

2 647 

High 

3 816 

4 377 

7 070 

Low 

3 018 

8 543 

10 973 

High 

10 150 

28 849 

33 708 

The  estimation  suggests  that  by  2025,  the  effects  of  the  various  options  on  tax 
revenue  would  be  significantly  higher,  as  the  platform  economy  grows  in 
importance  across  the  EU.  Peer  to  peer  lending  is  expected  to  grow  at  68%  per  year 
between 2015 and 2025 (Nunatak Group, 2015)65, while Mastercard (2019) predicts that 
the  gig  economy  will  grow  17.4%  per  year  between  2018  and  2023.  The  current 

63 Some crowdfunding platforms, such as Seedrs (2018), report platform-wide internal rates of return (IRR) 
of  12  to  15%,  and  tax-adjusted  IRR  between  22%  and  28%.  Source:  https://learn-cdn.seedrs.com/wp-
content/uploads/2018/09/21134223/Seedrs_-PortfolioUpdate_Autumn2018.pdf 
64 European Commission (2019f). Taxation Trends in the European Union.  
65 Nunatak Group (2015). Update Financial Technology. Issue 5. Retrieved from: 
https://www.nunatak.com/app/uploads/2018/11/Nunatak-FinTech.pdf   

36 

 
 
 
                                                 
estimates  took  a  conservative  approach,  assuming  a  compound  average  growth  rate  of 
15% per year for services in the EU and 8.8% for goods66. 

Automatic and standardized reporting of incomes gained through platforms would 
allow  Member  States  to  properly  collect  taxes  due  (with  a  clear  positive  effect  on 
public  finance),  while  limiting  compliance  costs  incurred  by  economic  agents.  A 
single  reporting  standard  at  the  EU  level  would  limit  the  compliance  costs  of  cross-
border platforms, which  would avoid  having to  report using different  standards in  each 
jurisdiction. This could also improve the functioning of the Single Market and encourage 
cross-border trade, as the cost of platforms expanding to a different Member State would 
be lower than the case with different reporting standards. Furthermore, a single reporting 
standard could decrease the Member States’ tax administrations costs of cooperation, as 
discussed above.  

Regardless of methodology, the benefits derived from implementing automatic EU-
wide reporting seem to be in the order of billions of euros per year. This is the case 
even  in  for  a  limited  scope  (accommodation,  transport,  professional  and  household 
services). The estimation of tax revenues involves significant uncertainty regarding each 
parameter  (value  of  transactions  V,  rate  of  unreported  tax  revenues  p,  proportion  of 
transactions which represent taxable income y), but overall, it would seem that the fiscal 
benefits  of  the  options  are  significant  and  positive.  The  fiscal  benefits  of  an  EU 
intervention are much larger in case of reporting obligation applying to all services 
and sale of goods. In 2025, additional tax revenues are estimated to range approximately 
between EUR 11 and 33 billion while they would range between EUR 3 and 10 billion if 
only a subset of services were covered by the initiative.   

Since  the  digital  platform  economy  is  highly  concentrated,  limiting  the  scope  to 
medium/large  platforms  (i.e.,  those  with  turnovers  above  EUR  100,000)  would  in 
principle  not  affect  the  estimations  of  the  tax  revenues  significantly.  Data  on  the 
distribution of transactions by platform size is not available, but, as shown in the study 
by European Commission (2017), the majority of transactions occur on medium-to large 
platforms.  

Limiting the scope solely to EU-based platforms could significantly decrease the tax 
revenues of each option.  In order to  preserve a level  playing field,  all sellers based in 
the  EU  and  operating  on  digital  platforms  should  be  covered  by  the  taxation 
requirements,  regardless  of  where  the  platform  is  based.  Studies  such  as  European 
Commission (2017) have shown that the largest  players in most sectors of the platform 
economy  originate  from  outside  Europe67.  Given  the  highly  mobile  nature  of  their 
businesses, digital platforms could easily relocate outside Europe, while offering services 
and  goods  to  European  consumers  through  European  sellers.  This  concern  was  voiced 
both by businesses and by Member States’ representatives during the meetings held with 
them  (see  Annex  2  for  a  summary  of  the  consultation).  Furthermore,  platforms  which 

66  This  assumes  that  the  compound  average  growth  rate  of  8.8%  for  e-commerce  will  be  maintained 
between  2018  and  2025.  Source:  Statista  (2019).  E-commerce  Report  2019.  Retrieved  from: 
https://www.statista.com/study/42335/ecommerce-report/ 
67 See Table 13, page 92 in European Commission (2017). 

37 

 
 
                                                 
originated abroad have significant market shares in the EU, so it is likely that the revenue 
estimates could therefore be significantly smaller in case of relocation.  

Limiting the scope to exclude domestic sellers would negatively impact the revenues 
benefits  and  the  level  playing  field.  Excluding  domestic  sellers  from  the  scope  could 
have a large effect on the revenues benefits of the EU intervention. Although experience 
with  DAC2  shows  that  many  Member  States  would  introduce  national  provisions  to 
expand  the  reporting  requirements  to  domestic  taxpayers,  this  would  create  clear 
concerns in terms of level playing field, as it would no longer be ensured that all sellers 
are  subject  to  the  same  reporting.  This  could  translate  in  underreporting  and  undue 
reduction of the tax liability for some sellers. In that context, it is noted that the initiative 
will not  impact  on the level  of taxes due by the sellers and on whether  or not  a sellers 
should pay tax, but simply ensure that tax administrations are better equipped to enforce 
the collection of taxes. 

A  wide  scope  in  terms  of  sellers  would  limit  the  risks  of  circumvention,  while  not 
creating extensive additional costs for sellers. An exemption for some sellers is likely 
to  trigger  attempts  at  circumventing  the  rules  to  “meet”  the  exemption  criteria,  in 
particular criteria defining transaction and monetary values. At the same time, it is useful 
to recall that the initiative does not create any costs for sellers, beyond the time needed to 
provide  a  limited  set  of  data.  As  most  of  these  data  are  requested  from  sellers  when 
signing up to sell services or goods via a platform, it is expected that any negative impact 
on sellers’ willingness to use the platform economy would be limited. Improved income 
information would also allow tax authorities to better target possible tax incentives, such 
as  exemptions  or  credits,  as  all  income  gained  on  platforms  would  be  observable.  The 
wide scope in terms of reportable sellers is also supported by the consultation: more than 
60% of Member States’ replies to the targeted consultation supported that all providers of 
services or sellers of goods through digital platforms should be reported to the relevant 
tax administrations, without exemption. 

Furthermore,  other  benefits  will  derive  from  the  use  of  the  information  exchanged.  
The  DAC  allows  for  exchange  of  information  regarding  “all  taxes  of  any  kind”,  but 
specifically  excludes  VAT,  customs  duties,  and  excise  duties  covered  by  other  EU 
legislation. However, although these limitations limit the purpose for the exchanges, the 
directive broadens the use of the information to other purposes. In practice, despite these 
limitations when considering a request or otherwise making an initial exchange under the 
Directive,  once  held,  the  information  exchanged  can  be  used  in  the  administration  or 
enforcement of “taxes and duties of any kind”, including VAT.68   

6.2.2 Costs  

Requirements for platforms to report data and for tax administrations to exchange them 
will entail costs for both. These costs fall under two main categories:   

68 For the use of information for other purposes and to the benefit of other authorities, for instance customs 
authorities, refer to: Council Directive 2011/16/EU, article 16 ‘Disclosure of information and documents’ 
and in particular article 16(2). 

38 

 
 
                                                 
  one-off,  substantive  compliance  costs,  incurred    when  the  new    system    is  

introduced, mainly for development; 

 

recurrent  administrative  and,  for  tax  administrations,  enforcement  costs,  to 
operate the systems once it has been set up and to ensure it works as expected.  

The  assessment  of  costs  is  based  on  assumptions  and  extrapolations  derived  from  the 
costs  of  setting  up  and  operating  DAC2.  These  estimates  are  therefore  indirect  and  as 
such,  fragile.  Annex  4  provides  additional  information  on  the  categories  of  costs  and 
benefits and on the assumptions made.  

In  the  case  of  a  legislative  option,  a  certain  number  of  platforms  will  have  to  gather  a 
certain amount of data about a certain number of sellers, and then provide these data to 
tax  administrations.  The  latter  would  then  have  to  exchange  these  data  with  each  other 
and exploit in some manner these data.  

It is important to underline that sellers are not assumed to bear any particular burden or 
cost. One-off and recurrent compliance costs fall on digital platforms, which will have to 
report  seller  information,  and  on  tax  administrations,  which  will  have  to  gather,  store 
safely  and  use  the  information  collected  from  platforms  about  sellers.  Sellers  (either 
individuals or businesses) would need to fill in their details once and update them when 
their details change. As it can be seen in Table 4, most of the required information (with 
the exception of the TIN) is already routinely asked when signing-up to  most websites, 
so the additional reporting costs for sellers would be negligible. 

The  following  needs  to  be  estimated  in  order  to  quantify  costs  for  platforms  and  tax 
administrations:  

1.  The estimated number of sellers about which information is reported (“reportable 
sellers”). The number of reportable sellers is expected to vary depending on the 
scope of reporting: if the scope is broad (i.e., covering both services and goods), 
the  number  of  reportable  sellers  will  be  higher  than  if  the  scope  were  more 
limited. The number of sellers is also going to vary depending on whether there 
are exemptions and thresholds. If the overall scope is broad, yet some exemptions 
are  introduced,  the  number  of  reportable  sellers  will  be  lower  than  if  the  scope 
were broad and without exemptions.  

2.  The cost of complying with the intervention, ideally per seller. The hypothesis is 
that, the more sellers use a certain platform, the higher the costs will be for that 
platform.  Therefore,  small(er)  platforms,  used  by  a  relatively  low  number  of 
sellers, will bear lower costs than larger, widely used platforms. For instance, if a 
platform has 1000 sellers to report, we expect its costs both upfront and then once 
the system is operational to be higher than a platform which would have to report 
100. At the same time, we would expect the costs, one-off and recurrent, for one 
tax administration running controls on 1000 reported sellers to be higher than for 
an administration running controls on only 100 of them.   

39 

 
 
Methodology to estimate costs  

The  total  costs  of  each option  can  be  estimated and  monetised  by  multiplying  the  total 
quantity  (estimate)  of  reportable  sellers  (Qs)  under  each  option  by  a  cost  (P),  which 
varies depending on whether costs are one-off or recurrent.69  

𝐶𝑜𝑠𝑡𝑠 = 𝑄𝑠 ∗ 𝑃  

The average costs per platform are obtained by dividing the total estimated costs by an 
estimate of the number  of platforms  that would  have to  comply. The  average costs per 
tax  administrations  are  obtained  by  dividing  the  total  costs  for  tax  administration  by 
twenty-seven. These are simplifying assumptions give that the costs will vary given the 
size of the platform and of the tax administration, but we lack data for a more granular 
estimation.  Annex  4  gives  more  information  on  the  methodology,  assumptions  and 
references.  

The number of platforms matters for estimating the costs per platform, on average, of the 
intervention, as follows:  

𝐶𝑜𝑠𝑡𝑠
𝑃𝑙𝑎𝑡𝑓𝑜𝑟𝑚𝑠

Trying  to  quantify  the  number  of  platforms  is  challenging  in  the  absence  of  official 
statistics.  At  the  targeted  consultation  of  Member  States,  four  respondents  provided 
estimates  of  platforms  active  in  their  country.  On  this  basis,  and  generalising  from  the 
findings  of  Vaughan  and  Daverio  (2016),  we  estimate  that  there  are  hundreds  of 
platforms in the scope of the intervention, both EU-based as well as platforms established 
in  third  countries  but  operating  in  the  EU.  Our  estimates  put  the  number  of  platforms 
affected by the intervention in a range between 500-600 hundreds in a limited scope to 
almost  2000,  if  both  services  and  goods  are  covered,  without  exemptions.  A  table  in 
annex 4 provide more information on these estimates.  

One-off substantive compliance costs  

According to our estimates, the one-off, substantive compliance costs for platforms EU-
wide  vary  between  circa  EUR250  million  in  the  case  of  a  limited  scope  to  EUR875 
million  in  case  of  a  full  scope.  These  costs  are  estimated  for  the  whole  estimated 
population of sellers. The cost estimates per platform, on average, are circa EUR400 000. 
It should be stressed that these are average estimates, based on several assumptions. They 
do  not  necessarily  reflect  the  actual  costs  incurred  by  platforms,  especially  of  those 
having  to  report  a  relatively  low  number  of  sellers.  There  are  also  likely  economies  of 
scale involved in the definition of costs.70  

69  This  formula  is  coherent  with  the  basic  equation  of  the  Standard  Cost  Model,  according  to  which: 
“Administrative    costs    should    be    assessed    on    the    basis    of    the  average    cost    of    the    required 
administrative activity (Price) multiplied by the total number of activities performed per year (Quantity).”  
70  Decreasing  marginal  costs,  so  that  as  more  sellers  are  covered,  the  price  per  seller  for  setting  up  the 
system decreases.  

40 

 
 
 
                                                 
One-off  costs  for  all  tax  administrations  are  estimated  at  between  EUR54  million  to 
EUR189  million,  depending  on  the  scope  of  reporting.  That  means  EUR2  million  to 
EUR7  million  per  tax  administration,  on  average.  Annex  4  provides  additional 
information on these estimates.  

The Commission would also bear costs. In any legislative option, on the basis of current 
and past experience, it is likely that the Commission would incur also development costs, 
for defining the common, EU specifications of the new system of data collection and for 
setting up /  adapting the existing EU systems  to  enable the  exchange of information  to 
take place. More specifically, the Commission would invest mainly for the development 
and  operation  of  the  Common  Communication  Network  (CCN),  the  central  IT 
infrastructure for the safe exchange of information among tax and customs authorities in 
the EU.71 Having one single network is much less burdensome that if tax administrations 
had to exchange on a bilateral basis with each other and more secure than if exchanges 
took place solely via the internet. It is important to clarify that the Commission would not 
be  actively  part  of  the  exchanges:  it  would  not  gather  data,  nor  exchange  them,  nor 
use/exploit them. With this disclaimer in mind, on the basis of costs incurred in the past 
for DAC2, the one-off costs for the Commission are estimated at EUR 0.8 million for the 
development  and  first  five  years  of  operations  of  the  system.  As  said,  the  Commission 
would  not  play  an  active  part  in  gathering  or  exploiting  data  but  rather  it  would  only 
facilitate them.  

Recurrent administrative and enforcement costs  

Looking at recurrent administrative costs for platforms, it should be borne in mind that, 
in a baseline scenario, tax administrations would ask them for data in different ways and 
formats,  leading  to  substantial  work  to  comply  with  these  requests,  especially  for 
platforms operating in several Member States. This is arguably the main reason why the 
targeted  consultation  of  platforms  indicates  a  clear  preference  for  a  common  EU 
solution,72 expected to be less expensive than the current baseline patchwork of loosely 
coordinated  or  not-coordinated  reporting  obligations.  Overall,  an  EU  standardised 
reporting  model  for  platforms  would  result  in  lower  costs  than  a  continuation  of  the 
baseline scenario.  

According to our estimates, the recurrent  administrative costs for platforms would vary 
between EUR30 million in the case of a limited scope to about EUR100 million in case 
of  a  full  scope.  These  costs  are  estimated  for  the  whole  population  of  sellers.  The 
administrative costs per platform, on average, would range at 50 000 per year.  

For  tax  administrations,  the  recurrent  costs  of  the  system  are  estimated  approximately 
between EUR6 million (limited scope) and EUR21 million (full scope) per year, or circa 
EUR200 000 to EUR800 000 per Member State. These estimates are extrapolated from 

71 CCN is the secure intranet used by EU tax and customs administrations. It includes telecommunications 
network infrastructure, security equipment (e.g. encryption   devices, firewalls), communications gateways 
in the Member States, the software linking them together as well as the central management services (e.g. 
central help desk and support). 
72 See Annex 2 on stakeholders’ consultation.   

41 

 
 
                                                 
the costs incurred by Member States for operating the system for automatic exchange of 
information of financial accounts (DAC2).  

In addition to the costs of running the system and keeping it operational (i.e. ensuring the 
actual exchange of data), tax administrations would incur (labour) costs for sorting and 
exploiting the data, which can be referred to as enforcement costs.  

Sorting  sellers'  information  has  a  cost.  Some  sellers  may  indeed  be  active  only 
occasionally,  and  obtain  low  incomes.  In  this  case,  information  is  less  relevant  for  tax 
administration  than  information  concerning  large(r),  high-revenue,  taxable  sellers.  To 
keep the administrative burden for platforms as limited as possible, a choice is made to 
pass these costs onto tax administrations, asking platforms to send information about all 
the  sellers,  without  exemption  or  threshold.  Tax  administrations  will  have  to  sort  the 
information  received,  as  they  already  do  in  other  areas  of  administrative  cooperation 
(e.g., financial accounts). As all data will be in a standardized electronic format, the costs 
for  tax  administrations  to  sort  and  filter  relevant  information  are  not  expected  to  be 
substantial.  

Enforcement  costs  depend  on:  the  number  of  controls  or  other  uses  done  by  tax 
administrations of the data they receive; the time each control takes; a monetary value of 
time, which depends on the average wage of a tax officer in charge of controls or other 
forms of data exploitations. On the basis of assumptions, overall, recurrent enforcement 
costs would vary between EUR3 million to more than EUR10 million, or about EUR100 
000 to EUR400 000 per tax administration.  

For  the  Commission,  the  recurrent,  administrative  costs  are  estimated  at  about  EUR0.1 
million per year. Annex 4 provides additional information on the estimates of recurrent 
costs.  

Costs: Summary of Analysis 

Table 10 Overview of estimated costs (in € million) for the legislative option, with different scopes envisaged in terms 
of activities. 

Platforms  
(for all platforms) 
One-off 
SSC 

Recurrent 
AC 
(yearly) 

EU27 tax administrations 

Commission 

One-off 
SSC 

Recurrent 
AC 
(yearly) 

Recurrent 
EC 
(yearly) 

One-off 
SSC  

Recurr
ent AC 

250 

500 

30 

60 

54 

6 

108 

12 

3 

6 

0.8 

0.1 

0.8 

0.1 

875 

105 

189 

21 

10.5 

0.8 

0.1 

Limited scope 
(Services other 
than finance)  
Intermediate 
scope 
(Services 
including 
finance)  
Full scope  
(All services + 
Goods)  

42 

 
 
 
 
 
 
Legend: SSC stands for substantive compliance costs, AC for administrative costs and EC for enforcement 
costs. Annex 4 on analytical methods gives information on the assumptions, formulas and values used for 
reaching these estimates.  

One-off costs are in the order of hundreds  of millions of euros. Irrespective of the 
scope  chosen,  the  recurrent  costs  derived  from  implementing  automatic  EU-wide 
reporting  seem  to  be  in  the  order  of  millions  or  tens  of  million  euro  of  euros  per 
year for the totality of the platform operators and of tax administrations. Even with 
the  widest  scope  (all  services  as  well  as  goods),  the  costs  remain  in  order  of  tens  of 
million euro per year.  

The  estimation  of  costs  involves  significant  uncertainty  regarding  each  parameter 
(number of reportable sellers, costs of compliance per seller), yet recurrent costs overall 
would  seem  to  be  in  the  order  of  tens  of  millions  of  euro.    Considering  the  number  of 
reporting platforms, on average, this would result in estimated average recurrent costs for 
businesses  of  tens  of  thousands  of  euro.  This  is  an  average  value.  For  a  platform 
reporting relatively few sellers, however, costs could be lower. 

The  estimations  capture  costs  for  the  three  different  scope  of  reporting,  without 
considering  possible  exemptions  or  thresholds  in  terms  of  reportable  sellers  and 
platforms. If exemptions were introduced, how would the impact change? The answer to 
this  question  depends  on  the  design  of  the  exemption.  Chapter  5  identifies  two  main 
types  of  possible  exemptions:  for  platforms,  based  on  the  number  of  years  that  the 
enterprise has been in operation and turnover, or based on location; and for sellers, based 
on the amount and value of transaction, or based on location.   

From  a  cost  perspective,  exemptions  from  reporting,  be  it  for  platforms  not  having  to 
report in the first place or for certain sellers not to be reported, mean essentially lower (if 
any)  one-off  and  recurrent  costs.  If  a  platform  does  not  have  to  report,  it  will  not  bear 
one-off costs for setting up a system to collect and transmit information to tax authorities. 
If a platform does not have to report for certain sellers, part of its one-off and recurrent 
costs  will  be  lower.  However,  excluding  certain  sellers  would  also  be  costly,  at  least 
upfront,  as  a  platform  would  have  to  sort  /  filter  its  database  of  sellers  to  identify 
precisely which sellers to report about and which not. If not all platforms were subject to 
the same reporting obligations, for example if non-EU based platforms were not subject 
to  the  reporting  obligations,  this  would  also  create  an  uneven  playing  field  across 
platforms  interacting  with  EU  sellers.  The  scenario  with  no  exemption  either  for 
platforms  or  for  sellers  has  been  widely  supported  by  the  targeted  consultation  of 
Member States and by about half of the respondents to the public consultation. Namely, 
in  the  public  consultation,  18  and  19  out  of  37  respondents  deem  that  all  platforms 
(18/37) and all providers of services or seller of goods (19/37) should be subject to the 
same  reporting  obligations  in  order  to  avoid  potential  loopholes.  The  results  of  the 
targeted  consultation  of  Member  States  indicate  instead  a  clear  preference  for  no 
exemptions.73 

The one-off costs for tax administrations are likely to be lower for tax administration in 
case exemptions are introduced in terms of reportable sellers and/or platforms. However, 

73 Annex 2 provides additional information on the consultation results.  

43 

 
 
                                                 
such  exemptions  mean  that  tax  administration  would  only  access  information  on  those 
through  an  exchange  of  information  on  request,  thereby  increasing  their  recurrent 
administrative and enforcement costs. Exemption from reporting for platforms and/or for 
sellers  would  lead  to  lower  benefits:  as  said  above  in  section  6.2.1,  exempting  for 
instance  non-EU  based  platforms  would  result  in  a  significant  reduction  of  expected 
benefits (in terms of tax revenues). In addition, it would maintain an uneven playing field 
as some platforms or sellers would not be subject to the reporting. 

Avoiding  exemptions  maximises  expected  benefits,  while  ensuring  the  broadest 
possible level playing field and avoiding the risk that platforms and/or sellers put in 
place  avoidance  strategies  which  unduly  benefit  from  exemptions.  This  also  takes 
into account the preference expressed by the majority of the respondents to the targeted 
consultation.  

6.2.3 Impact on sector’s competitiveness  

The growth of the digital platform economy suggests that the economic role of platforms 
as  facilitators  of  transactions  in  services  and  goods  is  likely  to  become  increasingly 
relevant.  In  other  words,  the  sector  targeted  by  the  intervention  is  a  digital  area  of 
business that is growing and expanding. Consumers appreciate the convenience of having  
a  wide  range  of services  and goods at their immediate disposal. On a major platform 
facilitating goods’ transactions, once users have set up a profile and chosen what to buy, 
it can take less than ten seconds to pass the order.  

The  digital  platforms  sector  is  characterised  by  traditional  features  required  by  most 
market  places:  price  competitiveness  and  trust.  It  cannot  be  excluded  that  a  legislative 
intervention  may  affect  the  price  competitiveness  of  certain  sellers,  who  in  a  baseline 
scenario  do  not  follow  the  rules  and  are  able  to  provide  services/sell  goods  for  less 
because they do not pay taxes. Yet, having a level playing field requires all sellers to pay 
their  fair  share  of  tax,  so  competition  should  be  fair  and  not  based  on  “cheating”. 
Moreover, a wide intervention would prevent competitive disadvantages that could arise 
from the passing on of compliance costs. As far as platform operators are concerned, they 
would  have  to  deal  with  the  same  regulatory  setting,  avoiding  possible  issues  of 
differentiated  requirements  across  Member  States  and  thus  contributing  to  establishing 
fair  competition  and  a  level  playing  field  for  all  businesses  active  in  the  EU.  An 
intervention that would cover all platforms operating in the Single Market (for example, 
not excluding platforms based outside the EU but active in the EU) would best ensure a 
level  playing  field  across  platform  operators,  avoiding  a  situation  whereby  only  some 
platforms  have  to  face  compliance  costs  and  others  do  not.  Platforms’  representatives 
made such point clearly during the stakeholder consultation. 

Moreover, the intervention could increase trust in the system, as consumers prefer buying 
from sellers of good reputation, on trusted platforms. As in the case of e-commerce in a 
larger sense, consumers value trust: some platforms’ business models actually are based 
on  trust  towards  strangers.74  Trust  matters  for  sellers  and  platforms  too:  a  reliable 
platform or seller is likely to be more successful than one which is not trusted. The effect 

74  This  is  the  case  for  accommodation  platforms  for  instance.  Yet,  trust  matter  for  markets  in  a  general 
sense.  

44 

 
 
                                                 
of the EU intervention, especially in case of a broad scope, is expected to increase trust 
and possibly attract even more users and sellers towards platforms. The key mechanism 
through  which  trust  will  increase  is  a  reduction  of  compliance  risks  for  platforms  and 
sellers.  For  instance,  ensuring  “fair  play”  will  reduce  the  risks  of  damages  to  the 
reputation of platforms as well as promote a more positive, less conflictual (and costly) 
relationship  between  sellers  and  tax  administrations,  which  will  have  the  information 
they need to ensure that the former comply as expected.    

6.2.4 Impact on SMEs 

The impact of the intervention on SMEs can be analysed from two perspectives: on the 
one  hand,  it  can  be  asked  whether  the  intervention  will  impact  SMEs  as  reporting 
platforms.  On  the  other  hand,  there  is  the  issue  of  SMEs  affected  as  sellers.  Both 
questions can be approached in a qualitative and/or in a quantitative manner, asking for 
instance  how  many  platforms  having  to  report  are  SMEs  or  how  many  sellers  will  be 
SMEs.  

Firstly, we consider the impact on small and medium-sized platforms as reporting 
platforms. It is argued that, irrespective of how large the actual cost of compliance will 
be, SMEs having to report will be particularly affected. 

There is evidence that due to their relatively small size and limited resources available, 
SMEs  face  a  disproportionate  compliance  burden  as  tax  compliance  costs  are 
regressive.75 The introduction of a specific threshold dependent on the size of a platform, 
for  instance  excluding  platforms  with  relatively  low  turnover,  could  therefore  be 
considered  as  a  way  of  addressing  the  issue  of  compliance  costs.  However,  such 
thresholds are likely to act as a disincentive to the scaling-up of small and medium sized 
platforms and is not recommended. Tax incentives targeted at SMEs, be they in the form 
of  a  different  tax  rate  or  a  special  administrative  or  compliance  treatment  may  prevent 
SMEs  from  growing  by  creating  a  so-called  bunching  effect.76  This  ultimately  has  a 
negative impact on economic growth. 

Even  if  the  incentive  to  stay  below  the  threshold  may  be  somehow  mitigated  by 
platforms’ incentives to grow (in particular due to network effects), going back to users 
to ask for information could prove more difficult than asking it upfront. SME platforms 
that cross the reporting threshold could face difficulties when asking their users for more 
information later rather than during the on boarding process, when users are more likely 
to cooperate. As noted before, many of the fields in Table 4 (such as identification and 

75 On SMEs tax compliance costs please see:  
https://op.europa.eu/en/publication-detail/-/publication/0ed32649-fe8e-11e8-a96d-01aa75ed71a1/language-
en  
On the regressivity of compliance costs for SMEs, please see:  
https://www.ifs.org.uk/uploads/mirrleesreview/dimensions/ch11.pdf  
76  This  is  evidenced  in  e.g.  Almunia,  Miguel  and  Lopez  Rodriguez,  David,  Heterogeneous  Responses  to 
Effective  Tax  Enforcement:  Evidence  from  Spanish  Firms  (July  18,  2014).  Retrieved  from  SSRN: 
https://ssrn.com/abstract=2469288 or http://dx.doi.org/10.2139/ssrn.2469288, or Brockmeyer, Anne.  “The 
Investment Effect of Taxation: Evidence from a Corporate Tax Kink.” Fiscal Studies, vol. 35, no. 4, 2014, 
pp.  477–509.  JSTOR,  www.jstor.org/stable/24440325.  Additional  evidence  of  bunching  behaviour:  Onji, 
K.  (2009).  The  response  of  firms  to  eligibility  thresholds:  Evidence  from  the  Japanese  value-added  tax. 
Journal of Public Economics, 93(5-6), 766-775. 

45 

 
 
                                                 
contact data) are already a part of the on boarding process of numerous websites, so the 
marginal  cost  of  asking  for  more  information  from  the  beginning  should  be  relatively 
small. 

Standardizing  reporting  requirements  across  the  Member  States  would  benefit  SMEs 
which intend to expand their activity across the border, compared to a case with multiple 
standards across the EU. Since compliance costs impact SMEs in particular, they would 
be  significant  beneficiaries  of  such  standardization.  Moreover,  as  presented  in  section 
6.2.3,  the  intervention  is  expected  to  improve  trust  in  the  sector  and  to  even  the  level 
playing  field.  This  is  a  positive  impact  of  the  intervention.  Overall,  the  intervention  is 
expected  to  have  a  mixed  effect  on  small  and  medium-sized  platforms.  However,  it  is 
preferable  to  a  baseline  scenario.  In  the  latter,  regulatory  divergence  between  Member 
States leads to both higher compliance costs, disproportionate for SMEs active across the 
EU, and limits the EU expansion of a SME active in one Member State, as this company 
would  have,  potentially  for  each  new  market,  to  face  a  new,  different  reporting 
requirement.  Moreover,  the  baseline  scenario  does  not  ensure  a  level  playing  field, 
resulting in a purely negative effect for SMEs. 

Secondly,  the  intervention  would  also  impact  SMEs  as  sellers.  Platforms  play  a 
positive role for small businesses as they serve as marketplaces through which SMEs can 
sell  their  products  and  services.  There  is  evidence  that  platforms  enable  digital  trade 
within  the  EU  Single  Market  and  beyond.  77  In  a  baseline  scenario,  however,  there  is 
unfair competition and a lack of level playing field between a majority of SMEs playing 
by the rules  and fulfilling their tax compliance obligations and those not doing so. The 
intervention aims at addressing this challenge, and restoring a level playing field among 
sellers, irrespective of their size. As discussed in section 6.2.2, sellers, be they individuals 
or  businesses,  including  SMEs,    not  have  to  bear  any  significant  compliance  cost  or 
administrative burden.  

The direct impact of the intervention on SME sellers should be relatively small. As 
previously mentioned, the initiative brings little costs to the sellers as they only have to 
share data, which they would most likely have shared to register on the website. This is 
even more true for SMEs that already need to register with the tax authorities and have a 
TIN. While their effective tax burden could change due to improved reporting to the tax 
authorities, it should be noted that this would already be a part of their tax obligation and 
not an additional obligation directly imposed by the intervention. Any threshold could be 
also in this case possibly a barrier to scale up, in an ecosystem already characterized by a 
relative ease, for a business, of starting up but not of growing.78 

In sum, the impact on small and medium-sized entities selling their products or services 
via platforms is expected to be positive, promoting fair competition and a level playing 
field. 

How  to  assess  the  impact  of  the  intervention  on  SMEs  in  a  quantitative  manner?  The 
share of SMEs having to report out of the totality of reporting platforms is probably high. 

https://ec.europa.eu/digital-single-market/en/news/surveys-online-platforms-show-their-key-role-

77 
consumers-and-small-businesses-internet-activities  
78 https://publications.jrc.ec.europa.eu/repository/bitstream/JRC115240/jrc115240_digital_platforms.pdf  

46 

 
 
                                                 
Overall,  in  the  EU,  the  greatest  majority  of  businesses  are  SMEs.  There  are  several 
relatively small start-up platforms in the EU. Yet, a relatively large number of small and 
medium sized platforms will report on a relatively small number of sellers. Platforms are 
characterized by network effects, whereby the more incumbent users a platform has, and 
the  more  added  value  it  brings  to  new  users.  The  largest  platforms  account  for  a  very 
large share of the market and arguably of transactions and sellers as well.  79 As said, it is 
expected that small and medium sized platforms will have to report on a relatively small 
number  of  sellers,  compared  with  what  large  and  especially  the  largest  platforms  will 
have  to  report.  This  means  the  impact  in  terms  of  compliance  costs,  both  one-off  and 
recurrent, for small and medium sized platforms should be only a fraction of the overall 
compliance costs generated by the intervention. 

Many SMEs use platforms to sell their services and goods and this means that a share of 
reportable  sellers  will  qualify  as  SMEs.  However,  data  from  one  Member  State  having 
introduced  reporting  for  platforms  already,  indicates  that  two  thirds  of  sellers  are 
individuals, and one third enterprises. Out of the latter, the share of SMEs is not known; 
yet is likely to be high. In other words, it can be tentatively estimated that about one third 
of reportable sellers may qualify as small and medium sized businesses. 

To  conclude,  in  a  baseline  scenario,  compliance  costs  for  small  and  medium  sized 
platforms  are  high,  especially  for  those  platforms  operating  cross-border.  Different 
requirements may act as barrier to expansion of business across the EU. They may also 
lead  to  a  different  regulatory  framework  for  two  platform  operators  competing  for  the 
same market. Small and medium sized enterprises selling their services and products are 
in some cases subject to reporting, in others they are not. The level playing field is not 
even.  It  is  expected  that  the  EU  intervention  would  lead  to  fairer  competition,  a  level 
playing field among both platforms and sellers, and to fewer costs for cross-border small 
and medium sized platforms, compared with a baseline scenario. The intervention would 
also  generate  costs  for  small  and  medium  sized  platforms.  Yet,  due  to  the  fact  that 
reporting  small  and  medium  sized  platforms  will  report  most  likely  only  a  relatively 
small number of sellers, the costs should be limited and expected to be lower than in  a 
baseline scenario for platforms operating cross-border. However, the benefits of a level 
playing,  fairer  competition  and  of  standardisation,  removing  regulatory  barriers  to 
expansion  across  markets,  are  expected  to  offset  the  costs  and  to  contribute  to  a  better 
business environment for SMEs overall. 

6.2.5 Impact of strengthening administrative cooperation   

The  initiative  also  includes  minor  fixes  to  the  current  administrative  cooperation 
framework to ensure it becomes more effective. As emerged from the DAC evaluation, 
there are certain aspects of cooperation which would benefit from clarifications, namely: 
definition  of  the  concept  of  foreseeable  relevance,  explicit  reference  to  requests  for 
information  concerning  a  group  of  taxpayers  having  characteristics  in  common  and 
explicit  reference  to  the  possibility  for  tax  administrations  to  organise  joint  audits  of 

79 
businesses-brochure  

https://ec.europa.eu/digital-single-market/en/news/how-do-online-platforms-shape-our-lives-and-

47 

 
 
                                                 
taxpayers.80  Clarifications  of  these  concepts  will  improve  the  effectiveness,  efficiency 
and  coherence  of  administrative  cooperation.  Another  aspect  will  be  to  ask  Member 
States  to  provide  for  more  information  on  the  benefits  of  the  Directive,  which  would 
allow  to  better  monitor  its  effectiveness.  Coupled  with  the  introduction  of  exchange  of 
information  on  income  earned  through  platforms,  the  “tidying  up”  will  contribute  to 
tackling  the  problems  of  inefficiencies  in  administrative  cooperation  and  data 
exploitation.  

Defining foreseeable relevance  

Today, tax administrations have to cooperate with each other with a view to exchanging 
information that is foreseeably relevant for tax administration and enforcement.81 Yet, the 
Directive  does  not  include  a  definition  of  foreseeable  relevance.  In  practice,  there  are 
cases  when  a  tax  administration  may  request  to  another  tax  administration  information 
which  the  former  considers  foreseeably  relevant,  but  not  the  latter.  This  results  in  a 
longer time to obtain a reply to a request for information or even in partial or no replies. 
For  instance,  in  the  past  a  Member  State  asked  five  follow-up  questions  on  a  request 
coming  from  another  Member  State  to  ascertain  whether  such  request  was  foreseeably 
relevant  or  not.  There  has  been  at  least  one  case  when  one  Member  State  provided  a 
partial reply to a request for information, due to issue with foreseeable relevance.  

Group requests  

Delays with the exchange of information on request happen also when a Member State 
puts  forward  a  “group  request”  (i.e.  a  request  for  information  concerning  a  group  of 
taxpayers sharing certain characteristics), but  the  receiving Member State  considers the 
request inappropriate, invalid or unclear. There has been a case of a group request sent by 
one Member State to a second Member State which was still unanswered 2.5 years after 
the  initial  request,  despite  two  follow-up  questions  from  the  receiving  Member  State. 
There  is  evidence  of  other  cases  when  group  request  led  to  extended  dialogue  for 
clarifications  between  Member  States.82  Group  requests  may  admittedly  be  more 
complex  than  request  concerning  only  one  taxpayer,  yet  making  it  explicit  that  the 
Directive enables them and providing more clarity can make exchange of information on 
request more efficient and effective.  

In light of the above, we expect that the main benefits of the tidying up will result in a 
quicker  exchange  of  information  on  request.  Today,  out  of  circa  9  000  requests  for 
information made every year, circa 45% are answered later than six months, the deadline 
for replying to requests for information according to the Directive.83 It is also likely the 

80  Commission  staff  working  document  Evaluation  of  the  Council  Directive  (EU)  no  2011/16/EU  on 
administrative  cooperation  in  the  field  of  direct  taxation  and  repealing  Directive  77/799/EEC 
SWD(2019)328  final,  in  particular  page  62,  as  well  as  Report  from  the  Commission  to  the  European 
Parliament  and  Council  on  the  application  of  Council  Directive  (EU)  2011/16/EU  on  administrative 
cooperation in the field of direct taxation COM/2017/0781 final, page 6.  
81 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation 
(OJ L 64, 11.3.2011, p. 1), article 1(1).  
82 Examples taken from Member States’ replies to the questionnaire on the functioning of the Directive.  
83 On statistics concerning the number of exchanges on request and their timeliness, see Commission staff 
working document Evaluation of the Council Directive (EU) no 2011/16/EU on administrative cooperation 

48 

 
 
                                                 
 
volume  of  exchanges  on  request,  and  especially  of  group  requests,  will  grow  thanks  to 
the tidying up. It would be important to keep track of these two indicators (share of late 
replies to requests for information and number of group requests) to be able to monitor 
and evaluate the effect of the tidying up. While the effect is expected to be positive, it is 
not  possible  to  monetise  it,  also  bearing  in  mind  that  evaluation  of  the  Directive  on 
administrative  cooperation  shows  that  forms  of  administrative  cooperation  other  than 
automatic  exchange  of 
tax 
administrations.84  

involve  significant  costs  for 

information  do  not 

Joint audits  

Administrative  cooperation  would  also  be  strengthened  by  adding  explicitly  joint  tax 
audits  to  the  toolbox.  This  has  been  requested  by  several  Member  States85  and  by 
stakeholders  via  public  consultation.    Joint  audits  are  expected  to  be  beneficial  for  tax 
administrations and taxpayers, saving time (and money) for both. For tax administrations, 
joint audits can lead to quicker and better audit results. Taxpayers can benefit chiefly by 
sharing the same information  with  more than one tax administration, resulting in  lower 
costs of compliance.86 Depending on what the audit finds, increase in the efficiency and 
effectiveness of a tax audit may result in lower double taxation (a benefit for taxpayers) 
or in additional tax assessed, in case avoidance or evasion is detected. It is not possible to 
monetise the effect of joint audits but it is likely it will be in order of millions of euro per 
year:  during  the  period  2014  to  2017  (4  years),  on  average  a  Member  State  benefited 
circa  5  million  every  year  thanks  to  administrative  cooperation  other  than  automatic 
exchange of information.87 It is important that the benefits of joint audits are monitored 
(also  benefits  for  taxpayers)  to  ensure  a  comprehensive  evaluation  of  administrative 
cooperation.  

Summary 

To sum  up, strengthening administrative  cooperation, mainly by  streamlining  exchange 
of information on request, is expected to make cooperation more effective and efficient. 
It should lead to a quicker exchange of information on request and to quicker and better 
tax  audits.  The  costs  for  tax  administrations  are  expected  to  be  minimal.  Benefits  are 
expected  to  be  higher  than  costs.  While  it  is  not  possible  to  quantify  them,  they  will 
likely be in the order of millions of euro per year, per Member State, on average.  

in the field of direct taxation and repealing Directive 77/799/EEC SWD(2019)328 final, page 23. On the 
deadline  of  six  months,  the  reference  is  Council  Directive  (EU)  no  2011/16/EU  on  administrative 
cooperation in the field of direct taxation, article 7(1).  
84  Commission  staff  working  document  Evaluation  of  the  Council  Directive  (EU)  no  2011/16/EU  on 
administrative  cooperation  in  the  field  of  direct  taxation  and  repealing  Directive  77/799/EEC 
SWD(2019)328 final, pp. 37-38.  
85 Targeted consultation and Member States’ replies to the yearly questionnaire on the functioning of the 
directive.  
86 For the benefits of joint audits, see OECD, 2010, Joint Audit Report, pp. 23-24.  
87 For statistics on the benefits of administrative cooperation other than automatic exchange of information, 
see  Commission  staff  working  document  Evaluation  of  the  Council  Directive  (EU)  no  2011/16/EU  on 
administrative  cooperation  in  the  field  of  direct  taxation  and  repealing  Directive  77/799/EEC 
SWD(2019)328 final, page 46.  

49 

 
 
                                                                                                                                                 
In  addition,  substantial  benefits  of  these  clarification  measures  are  to  achieve  a  greater 
internal  coherence  within  the  DAC  provisions  and  to  achieve  a  higher  level  of  legal 
certainty. Introducing a clear definition of foreseeable relevance makes clear the rules of 
engagement for a secure and swift exchange of information while keeping the protection 
against ‘fishing expeditions’. The proposed clarifications on the “group request” concept 
in a Directive provision brings legal certainty to tax authorities and taxpayers alike whilst 
encouraging  its  use,  which  have  been  proved  especially  useful  for  large  scale 
investigations.  

6.2.6 Coherence with the VAT E-commerce package  

The VAT E-commerce package that will enter into force on 1 January 2021 lays down 
the obligation for platforms to keep records of business to consumers’ supplies of goods 
and  services  that  they  have  facilitated.  Those  records  shall  be  sufficiently  detailed  to 
enable the tax authorities of the Member State where those supplies are taxable to verify 
that  VAT  has  been  accounted  for  correctly.  These  records  must  be  made  available 
electronically on request to the Member States concerned. 

The proposed intervention and the VAT E-commerce package differ but present several 
synergies,  complementing  each  other.  The  VAT  E-commerce  provisions  put  an 
obligation  on  the  platforms  to  keep  records  and  to  make  them  available  to  the  tax 
authorities  on  request.  They  target  entities  that  are  subject  to  VAT  and  data  concern 
mainly  information  about  transactions.  The  proposed  intervention  provides  for  the 
reporting  of  the  information  to  tax  authorities  and  then,  as  a  second  step,  to  exchange 
information  automatically  between  tax  administrations.  It  has  a  more  comprehensive 
coverage, including reporting about individuals and information about income.  

In sum, the intervention presented in this impact assessment and the VAT E-commerce 
package  mutually  reinforce  each  other  and  provide  a  comprehensive  step  forward 
towards more transparency of digital platforms for the benefit of fair taxation.  

6.3 Social and environmental impacts  

6.3.1 Social impacts and impact on fundamental rights  

Having  a  single  EU  mandatory  instrument  to  introduce  a  common  system  for  data 
reporting  from  platforms  would  have  positive  social  impacts.  As  discussed  above,  the 
intervention is expected to lead to an increase in tax revenues, which can be used to fund 
the economic and social policies of Member states. Furthermore, the intervention would 
contribute  to  a  positive  perception  of  tax  fairness  and  to  a  fair-burden  sharing  across 
taxpayers, while at the same time it would result in more trust and transparency from the 
side of platforms.  

The  EU  would  be  acting  to  tackle  the  challenge  that  unreported  income  earned  via 
platforms poses to tax systems of all its Member States. The issue of tax evasion matters 

50 

 
 
 
to a vast majority of EU citizen.88  It is assumed that perception of tax fairness, and of the 
EU role in shaping it, would be the strongest, the broadest the scope of the intervention, 
given  that  there  are  issues  of  underreporting  across  all  types  of  activities.  The  same 
reasoning applies to benefits in terms of fair-burden sharing: the wider the scope of the 
intervention, the better Member States can ensure that taxes due are effectively collected.  

The intervention may also affect two fundamental rights: the protection of personal data89 
and the freedom to conduct a business.  

Personal  data  are  protected  under  the  General  Data  Protection  Regulation  (GDPR). 
Under  the  baseline  scenario,  some  tax  authorities  already  collect  personal  data  for  
the  purpose    of    monitoring  tax  compliance  of  platforms’  sellers.    Taxation  can  be 
regarded as a general objective of public interest that is capable to justify the processing 
of  personal  data.  Such  processing  must  comply  with  the  applicable  data  protection 
legislation  (including  with  principles  such  as  legality,  data  minimisation  and  purpose 
limitation, security etc.) 

In line with the GDPR, the existing DAC includes specific provisions and safeguards on 
data  protection.  Any  legal  intervention  based  on  further  amendments  to  this  Directive 
will then continue to follow and respect these safeguards and will have to comply with 
GDPR from the start. 

Admittedly, any collection of personal data poses a risk that these data may be illegally 
disclosed or of a data leak. Yet, there are means to reduce such risk, striking a balance 
between the public policy objective of fair taxation and the imperative to protect personal 
data. One such means is to reduce as much as possible the personal data to be collected. 
As shown in the data set presented in chapter 5, personal data requested are the only ones 
necessary  for  identifying  sellers  and  their  income  and  revenues.  They  account  for  less 
than ten data fields, for both individual and entity sellers. They are proportionate to what 
is strictly necessary for the purpose(s) of ensuring the administration and enforcement of 
the relevant tax laws of Member States. This means being able to link a certain amount 
with  a  specific,  clearly  identified  taxpayer.  Data  which  would  go  beyond  such  basic 
function, for instance data on who consumes services and goods, are excluded, as are all 
data regarding sellers which would not have a taxation purpose.  

On the other hand, taxpayers’ identification numbers (TIN) will be collected and passed 
to tax administrations. There is evidence that TIN are, together with personal names and 
surnames, the most important data item to ensure that data exchanged can be used for the 
purpose  of  tax  control.90  Tax  administrations  consider  TIN  as  the  most  useful 
identification  elements  for  automatically  matching  data  received  from  abroad  with 

88 “Tax fraud: 75% of Europeans want EU to do more to fight it”, European Parliament News, 29-07-2016.  
https://www.europarl.europa.eu/news/en/headlines/economy/20160707STO36204/tax-fraud-75-of-
europeans-want-eu-to-do-more-to-fight-it  
89 Charter of Fundamental Rights of the European Union, OJ C 326, 26.10.2012, p. 391–407, article 8.  
90  European  Commission.  (2018).  Report  from  the  Commission  to  the  European  Parliament  and  the 
Council  on  overview  and  assessment  of  the  statistics  and  information  on  the  automatic  exchanges  in  the 
field of direct taxation COM/2018/844 final. 

51 

 
 
                                                 
national taxpayers’ registries.91 The systematic inclusion of TIN of the taxpayer allows to 
avoid  several  issues  with  identification,  the  most  recurrent  ones  being  misspelling  or 
problems caused by translation/transliterations, as well as homonymies.  

It is also important to stress however that reporting does not equal having to pay tax. Not 
every transaction is subject to direct tax, as this may depend on how much a seller earns 
over  a  tax  year  and/or  the  frequency  of  transactions.  In  some  cases,  occasional  sellers 
will  have  their  income  reported  but  still  will  not  have  to  pay  any  tax  on  it.  On  a  more 
technical  level,  any possible negative impact  on  personal  data  will be minimised by  IT 
and  procedural  measures.  The  exchange    of    the  data    will  pass    through    a  secured  
electronic  system    that    encrypts    and    decrypts    the    data  and,  in  every  tax 
administrations, only authorised officials should access the information. Member States 
will have to apply the GDPR for the process of data, in their national systems. As data 
controllers, they will have to ensure secure and proportionate data storage.  

To  sum  up,  irrespective  of  the  precise  scope  and  possible  exemptions,  any  EU 
intervention on the basis of which personal data will be processed will be compliant with 
GDPR and any possible impact justified.  

According to the Charter of Fundamental Rights of the European Union, the freedom to 
conduct a business is recognised, as long as business is conducted in accordance with EU 
and national laws.92 The intervention does not impact negatively such freedom, rather it 
will contribute to ensure that such freedom is exercised in respect of the law, in particular 
applicable tax laws of the Member States.  

6.3.2 Environmental impacts  

By  clarifying  their  taxation  requirements,  platforms  would  start  competing  on  a  more 
level playing field with  more traditional businesses, which could decrease their relative 
appeal to consumers. The total environmental effects are unclear but likely to be minor. 
On  the  one  hand,  some  platforms  encourage  the  more  efficient  use  of  resources,  so 
substitution  towards  less  sustainable  alternatives,  if  any,  could  have  some  negative 
environmental effects.  On the other hand, other  platform providers currently encourage 
the  use  of  common  resources  such  as  public  spaces,  roads  etc.,  without  contributing  to 
the public finances through taxation.  

91 Ibid.  
92 Charter of Fundamental Rights of the European Union, OJ C 326, 26.10.2012, p. 391–407, article 16.  

52 

 
 
 
 
                                                 
7 HOW DO THE OPTIONS COMPARE? 

This  section  compares  the  impacts  of  the  options.  The  options  are  assessed  against  the 
criteria of effectiveness in reaching the policy objectives, efficiency, costs and benefits as 
well as coherence with other EU policies, namely GDPR. For each category, the options 
are marked with “minuses or plusses”.93   

For  the  sake  of  clarity,  a  colour  scheme  is  also  applied,  with  yellow/green  indicating 
positive  and  orange/red  negative  impact.  The  baseline  is  used  as  point  of  comparison 
against which the other options are assessed, and scored as zero in the table.  

Table 11 How to Options Compare 

 All  retained  options  would  increase  tax  transparency  and  be  effective  in  achieving  the 
objectives  of  the  intervention  (presented  in  chapter  4).  The  key  difference  in  terms  of 
effectiveness  lies  in  the  breadth  of  the  scope  of  application  of  the  option.  The  option 
having  the  broadest  scope  scores  highest  in  terms  of  effectiveness.  When  it  comes  to 
efficiency,  the  impacts  of  the  retained  options  differ.  Taking  the  baseline  as  point  of 
comparison, the most efficient options overall, for the different actors involved, are those 
having  an  intermediate  and  a  full  scope,  the  latter  being  considered  the  one  having  the 
best  cost-benefit  ratio  as  a  whole.  It  is  acknowledged  that  the  introduction  of  a 
requirement to collect information and to report it to tax administrations has an impact on 
digital  platforms  (the  costs  of  the  options  are  presented  in  section  6.2.2).  However, 
compliance costs for businesses are expected to be lower in any of the retained options 
than in a baseline scenario. Also the impact on enforcement costs of tax administrations 
is deemed positive, under any of the retained options (more information on the impact on 
costs for tax enforcement  is  presented in  section 6.2.1).  It  should be noted that the key 
difference in terms of efficiency lies in the impact on tax revenues, with the assumption 
of  a  positive  correlation  between  breadth  of  the  scope  and  impact  on  tax  revenues 

93  -3  indicates  a  strong  negative  impact,  -2:  sizeable  negative  impact,  -1:  limited  negative  impact,  0: 
baseline scenario, 0.5: very limited positive impact, 1: limited positive impact, 2: sizeable positive impact, 
3: strong positive impact.  

53 

Effectiveness, efficiency and coherenceBaseline Limited scopeIntermediate scopeFull scope - with exemptions for certain platforms/sellersFull scopeEffectiveness of the optionConsistent functioning of the internal market01213Contribute to safeguard Member States’ tax revenues and make tax systems fairer01213Improve the ability of Member States to detect and counter cross-border  tax evasion01213Deterrent effect01213Efficiency of the optionsImpact on tax compliance costs for business  (a positive sign indicates a reduction of costs) 010,510,5Impact on enforcement costs for administrations01111Impact on tax collection 01213Impact on SMEs 01111Coherence with other EU policiesCoherence with the General  Data  Protection regulation02222Legend: 0: negligible impact; 0.5 very limited positive impact; 1/-1: limited positive (negative) impact; 2/-2: sizeable positive (negative) impact; 3/-3 strong positive (negative) impact 
 
 
 
                                                 
(section  6.2.2  gives  estimates  of  the  impacts  in  terms  of  tax  revenues).  Concerning 
coherence  with  other  EU  policies,  the  focus  is  put  on  data  protection.  As  indicated  in 
section 6.3.1, compared with a baseline, having a standardised and secure system for data 
collection and exchange is considered a better option, from a data protection perspective.  

To sum  up, while all options share some similarities, the comparison  of  the options on 
the  basis  of  their  effects  against  the  baseline  is  mainly  influenced  by  the  extent  of  the 
scope of the transparency obligation under each option and its overall effectiveness and 
impact on tax revenues.  

Figure 6 A visual comparison of options (the limited scope overlaps with the full scope with exemptions)  

54 

 
 
8 PREFERRED OPTION 

The  above  analysis  indicates  that  the  legislative  option  is  the  most  appropriate  to  meet 
the objectives of the intervention. The status quo baseline scenario is the least effective, 
efficient and coherent option. When compared with the baseline scenario, having an EU 
mandatory common standard would ensure that all EU tax administrations have access to 
the  same  type  of  data.  In  other  words,  an  EU  legislative  intervention  would  put  all  tax 
authorities on an equal footing. A legal intervention is also the only one which allows for 
automatic  exchange  of  information  at  the  EU  level,  on  the  basis  of  common  standards 
and  specifications.  The  EU  legislative  intervention,  once  implemented,  is  the  only 
scenario in which the tax authorities where a seller is tax resident can verify that sellers 
have accurately reported their income earned via platforms, without the need for ad hoc, 
time consuming requests and inquiries.  

In  particular,  the  legislative  option  should  be  designed  as  to  have  the  widest 
reporting  scope  and  include  all  platforms  operators  and  sellers  active  in  the  EU. 
Introducing  reporting  for  all  platforms  active  in  both  services  and  goods  leads  to  the 
highest  expected  benefits  in  terms  of  additional  tax  revenues.  As  expected,  this  sub-
option also has a better impact on sector competitiveness and the best social impact: the 
high  degree  of  tax  fairness  generated  by  the  intervention  would  increase  trust  in  the 
sector and lead to a situation where sellers and platforms can be confident that their other 
peers and competitors are “doing the right thing” too.  

Overall, compliance costs for platforms are considered the highest in a baseline scenario. 
One  EU  standard  for  the  collection,  transmission  and  exchange  of  data  reduce  the 
compliance  costs  of  platforms,  compared  to  a  patchwork  of  national  measures.  This 
expected, positive effect on platforms’ compliance costs of an EU legislative intervention 
is confirmed by the outcome of the public and targeted consultation. 94 This is especially 
likely to be the case when platforms operating cross-border are SMEs, which, due to their 
relatively small size and limited resources, tend to face a disproportionate administrative 
burden when it comes to fulfilling tax requirements.95  

The best cost-benefit ratio is achieved by choosing the widest scope, with no exclusion 
either in terms of reportable sellers or platform operators. Excluding SME platforms from 
the reporting requirements could indeed ease their compliance costs at first, but is likely 
to  significantly  increase  the  compliance  costs  once  the  platform  crosses  the  reporting 
threshold. The reason  for the latter effect  is  that  the platform would have to  require its 
sellers  to  fill  in  information  after  on  boarding,  which,  according  to  the  public 
consultation,  is  burdensome  and  in  some  cases  impossible.  Platforms  could  also  be 
incentivised  to  stay  below  the  reporting  threshold,  but  this  effect  could  be  at  least 
partially mitigated by their incentives to grow in order to enjoy economies of scale and 
network effects. Sellers could also use exempt platforms in order to avoid reporting their 
income  to  tax  authorities,  switching  platforms  whenever  they  are  required  to  start 
reporting.  A  broad  application  to  all  platforms  removes  such  incentives,  levelling  the 
playing field between platforms.  

94  Opinions  expressed  by  certain  platform  operators  at  the  EESC  public  hearing  on  "The  collaborative 
economy - data exchange with tax authorities", Tallinn, 13 February 2020. Similar views were reiterated at 
the stakeholders’ meeting of 27 February 2020.  
95 Study on tax compliance costs for SMEs, Final report - Study (Published: 2018-12-12). 

 
 
                                                 
Reporting  requirements  that  would  include  small  or  occasional  sellers  would  also  limit 
the  possibilities  for  avoiding  reporting,  while  not  causing  significant  costs  to  sellers. 
Sellers only need to provide the identification information to the platforms, with no extra 
reporting requirements. If the small sellers are companies, they should already have tax 
requirements  and  TIN’s,  so  the  additional  burden  of  passing  the  information  to  the 
platforms should be minimal. Similarly, occasional individual sellers should have a low 
additional  burden,  as  they  would  only  need  to  update  their  information.  It  should  be 
noted, again, that the reporting requirement do not need to lead to an increase in the tax 
burden of those small sellers. Member States may have a threshold below which income 
earned  by  sellers  is  not  taxed.  Reporting  by  platform  operators  would  have  no  tax 
consequences for these sellers. Including all sellers would significantly ease the detection 
of sellers who evade taxes through non-reporting, while not hindering very small sellers.  

Furthermore,  the  broadest  reporting  scope  is  also  the  preferred  option  of  the  main 
stakeholders involved in the initiative, mainly Member States, platforms and users, as it 
has been reflected in the targeted and public consultation.  

Tax  administrations  as  well  bear  lower  development  and  running  costs  under  the 
preferred option than the baseline, where they would bear the full investment and running 
cost  of  any  new  IT  solution  and  continue  to  face  costs  for  handling  uncoordinated, 
divergent requests for information. According to one Member State’s tax administration, 
an EU legislative intervention would lead to 20 % cost savings due to less workload to 
deal with requests for information, when compared to the baseline.96  

The  legislative  option  satisfies  the  principle  of  proportionality.  The  data  requested  of 
sellers is, according to the experience with previous DAC, the minimum required in order 
to ensure that tax administrations can adequately match taxpayers with the data received 
from digital platforms.  

As  far  as  clarifications  of  the  Directive  are  concerned,  they  aim  precisely  at  clarifying 
concepts, which had been identified in the evaluation of the Directive as undermining its 
effectiveness and efficiency.    

In  terms  of  data  protection,  although  the  intervention  increases  the  amount  of  personal 
data  processed,  and  therefore  impacts  the  protection  of  taxpayers’  personal  data,  it  is 
justified to ensure fair taxation and limited to what is necessary to achieve this objective. 
EU  intervention  also  ensures  a  common  EU  approach  (instead  of  a  possible  piecemeal 
method in a baseline scenario) and explicit safeguards for data protection in EU law.  

This    respects  the  principle  of  subsidiarity,  as  the  main  problem  –  which  is  lack  of 
reporting by sellers of income and revenues earned through platforms and weaknesses in 
administrative cooperation – requires EU solutions, providing on the hand one new tools 
to tax administrations to do their job efficiently and on the other hand improving existing 
tools.  In  the  absence  of  cooperation,  a  Member  State  on  its  own  would  not  be  able  to 
ensure the correct compliance of its tax residents who earn income from other countries. 
The  preferred  option,  that  is  amending  the  Directive  on  Administrative  Cooperation  to 

96 Source: TAXUD call with a Member State’ tax administration on 6 March 2020. 

56 

 
 
                                                 
introduce  a  common  EU  reporting  standard  for  platforms  and  subsequent  automatic 
exchange among tax administrations, clearly offers EU added value, over and above what 
can be achieved at Member State level.  

It is also important to emphasize that the preferred option is proportionate and does not 
go  beyond  what  is  needed  to  achieve  the  goals.  The  cost-benefit  ratio  is  positive:  the 
expected return in terms of additional tax revenues are higher than estimated costs. The  
administrative  burdens  for businesses  and  tax  administrations  are  overall  reduced  
compared  to   the  baseline, the impact  on personal  data protection is  justified, and the 
expected  effect  on  sector’s  competitiveness  and  the  overall  social  impact  is  deemed 
positive. A further element of proportionality lies in the principle of data minimisation, 
whereby platforms will have to provide only the data which is considered necessary for 
tax collection purposes.  

Intervention logic of the preferred option 

The intervention logic presents in a simplified way how the EU intervention is expected 
to work. Building on the previous sections, the figure below starts from the drivers of the 
problems, which influence and cause the problems in the first place. The figure presents 
the  problems  which  are  considered  significant  enough  and  need  to  be  addressed  at  EU 
level, thus requiring an EU solution.  

Once the  problems  have been  clearly defined, it  is  time to  identify the main  objectives 
which will frame the possible solutions. The next step is to define the preferred solution 
and the activities and outputs/actions which are covered.  

The  final  step  shows  how  the  different  activities  and  outputs/actions  triggered    by    the  
EU  intervention  are  expected  to  interact  to deliver the  desired  changes  over  time  
and  to  achieve  the  objectives.  

57 

 
 
Figure 7. Intervention logic 

Drivers 

Problems 

General 
Objectives 

Activities 

Outputs 

Desired 
changes 

Digitalisation 

Global business models 

Income fragmentation 

Limited 
reporting of 
income 
generated 
through 
platforms 

Fair and 
consistent 
functioning of 
the internal 
market 

New 
reporting 
obligations for 
digital 
platforms 

Common IT tools 
for automatic 
exchange of info 
between EU states 

Common  EU 
standard  of 
reporting for 
platforms  

Simplify & encourage 
tax compliance 

Deter taxpayers from 
not declaring taxes 
due 

Level the playing field 

Various national reporting 
standards 

Different implementation 
of EU rules by EU states 

Different treatement of 
information exchanged by 
EU states 

Inefficiencies 
in 
cooperation & 
data 
exploitation 

Safeguard EU 
States’ tax 
revenues  

Clarifications 
to EU admin 
cooperation 
framework  

Harmonized 
interpretation & 
application of 
admin cooperation 
framework 

Increased tax 
collection 

Improve ability to 
detect & counter 
cross-border tax 
avoidance & evasion 

Enchanced admin 
cooperation between 
EU States 

 
 
9 HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

9.1 Indicators for monitoring and evaluation 

The  table  below  gives  an  overview  of  the  objectives,  the  indicators  to  measure  
whether  they  will  be  achieved,  the  tool  for  monitoring  them  and  the  operational 
objective. In  the  medium  term,  the  initiative  is  expected  to  generate  a  positive  
impact  with respect to the general objectives presented in chapter 4. 

Table 12 Indicators for Monitoring  

Specific objectives 
Improve  the  ability  of  Member 
States  to  detect  and  contrast 
cross-border tax evasion 

Deterrent effect  

Indicators  
Number of controls 
carried out based on 
data tax 
administrations gather 
via the intervention 
(either only or 
including these data)  
Additional tax 
revenues secured 
thanks to the 
intervention, measured 
either as increase in 
tax base and/or 
increase in tax 
assessed  
Number of replies 
received later than six 
months after the 
request; number of 
group requests sent; 
number of joint audits; 
benefits of joint audits  
Qualitative assessment 
of the rate of sellers’ 
compliance in the 
digital platforms’ 
sector  

Measurement tools  
of 
Yearly 
of 
automatic 
information (source: Member 
States’ tax administrations)  

assessment 
exchange 

assessment 
exchange 

of 
Yearly 
automatic 
of 
information (source: Member 
States’ tax administrations) 

Statistics on administrative 
cooperation other than AEOI 
and yearly questionnaire on 
the functioning of the 
directive 

assessment 
exchange 

of 
Yearly 
of 
automatic 
information (source: Member 
States’ tax administrations) 

9.2 Monitoring and reporting  

The results of the yearly assessment by Member States are presented and discussed in the 
Administrative  Cooperation  in  Direct  Taxation  Commission  expert  group.  The  yearly 
assessment  is  conducted  on  the  basis  of  the  relevant  provisions  of  the  Directive  on 
Administrative Cooperation and its implementing regulation.  

 
 
 
 
 
 
 
Assuming implementation of the intervention will have started by then, the Commission  
will  report  to the  European  Parliament  and  the  Council  on  the effectiveness and 
efficiency  of  this  intervention  as  part  of  the  second  report  on  the  application  of  the 
Directive  on  administrative  cooperation,  due  by  1  January  2023.97  As    such,    the  
evaluation    of    the    current    initiative    will    probably    be  after    the  evaluation    of    the  
VAT  E-commerce  Directive and will therefore take into account its findings. In case the 
implementation of the intervention started after 2022, the Commission will report about 
it as part of the third report on the application of the Directive, currently due by 1 January 
2028.  

97 The first report on the application of the Directive on administrative cooperation was due by 1 January 
2018.  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the  application  of 
Council  Directive  (EU)  2011/16/EU  on  administrative  cooperation  in  the  field  of  direct  taxation. 
COM/2017/0781 final  

60 

 
 
 
 
 
 
 
                                                 
ANNEX 1: PROCEDURAL INFORMATION 

Lead DG, Decide Planning/CWP references 

DG TAXUD, PLAN/2019/6239.  

The  initiative  is  part  of  the  -  Action  plan  for  fair  and  simple  taxation  supporting  the 
recovery  strategy  (PLAN/2019/6238)  and  listed  in  the  Commission  Work  Programme 
2020, Annex I, priority: “An economy that works for people”, initiative number 22.  

Organisation and timing 

An  interservice  steering  group  was  set  up  to  steer  and  provide  input  to  this  impact 
assessment report. The steering group met 4 times before the report was submitted to the 
Regulatory Scrutiny Report.   

Consultation of the Regulatory Scrutiny Board 

On  29  April  2020,  a  draft  version  of  the  impact  assessment  was  presented  to  the 
Regulatory  Scrutiny  Board.  On  5  May,  the  RSB  issued  a  positive  opinion  with 
reservations.  Afterwards, the draft report has been revised in order to take into account 
the recommendations for improvement, as explained in more detail in the table below. 

RSB recommendations 

What to improve:  

(1)  The  report  should  make  clear  that  the 
initiative  addresses 
the  high  cost  of 
enforcing  tax  law  and  of  preventing  tax 
evasion  on  transactions  through  digital 
platforms. The report should better explain 
that the initiative aims to reduce these costs 
by  requiring  digital  platforms  to  report 
certain  information  about  their  customers’ 
transactions.  Reducing  such  costs  and 
containing  tax  evasion  are  clear  benefits 
that  should  be  further  highlighted  in  the 
report. The report should argue clearly that 
this  cost 
the 
tax  authorities 
cooperation  of  national 
because  digital  platforms  can 
locate 
anywhere. 
(2)The  report  should  better  specify  the  
objectives    and    adjust    them    to    the  
problem  analysis.    It  could  clarify  that  it  
aims  to  improve  national    and  local  tax 
through  EU  wide  co-
administration 

reduction  depends  on 

How  have  the  recommendations  led  to 
changes to the report? 
To  make  clear  that  the  initiative  addresses 
the  high  cost  of  tax  enforcement  in  the 
of 
automatic 
absence 
information,  the  report  has  been  expanded 
with  a  new,  dedicated  section 
titled: 
‘Reduced  costs  of  enforcing  tax  law’, 
in  Chapter  6,  part  6.2.1. 
introduced 
(benefits).  

exchange 

of 

The new section puts forward the argument 
that the efficiency in gathering tax relevant 
information  would  be  higher  once  the 
initiative  was 
in  a 
baseline  scenario.  The  cost  reduction  is 
clearly linked with the extent of cooperation 
between national tax administrations.  

implemented 

than 

To  better  specify  the  objectives  and  adjust 
them to the problem analysis, changes have 
been  made  in  Chapter  4  ‘Objectives’,  to 
stress 
importance  of  EU  wide 
cooperation;  an  intervention  logic  diagram 

the 

61 

 
 
 
 
 
 
 
operation, 
transactions. 

rather 

than 

cross-border 

should 

(3)The report should deepen the analysis of 
the proportionality of the options. It should 
strengthen  the  assessment  of  impacts  on  
small    platforms    and    occasional    sellers.  
This 
administrative 
include 
reporting  requirements,  consistency  with 
the  GDPR  and  incentives  for  these  groups 
to  enter  this  market.  The  report  should 
expand its analysis of the  pros  and  cons  
of    exempting    small    platforms    or  
occasional    sellers    from    the    new 
obligations  and  better  justify  its  preferred 
option. 

has been added in Chapter 8, to clearly link 
and  show  visually  the  connection  between 
problems and objectives.  
Several  amendments  have  been  made  to 
deepen the analysis of proportionality of the 
options  and  in  particular  reinforce  the 
assessment  of  impacts  on  small  platforms 
and occasional sellers.  
Changes  have  been  made  to:  section  6.2.4 
‘Impact  on  SMEs’,  where  the  analysis  has 
been  expanded  on  the  impact  on  small 
platforms  of  the  intervention,  to  section 
impact  on 
6.3.1 
fundamental rights’, to clarify the impact on 
personal  data  in  particular  of  occasional 
sellers;  to  section  6.2.2.,  to  expand  the 
analysis of the costs for occasional sellers.   

impacts  and 

‘Social 

(4)The baseline should consistently be used 
as  point  of  comparison  against  which  the 
other 
assessed.  When 
comparing  the  options,  it  should  therefore 
score as zero. 

options 

are 

(5)The  report  should  better  justify  and 
examine 
of 
clarifications  to  the  Directive  resulting 
from the evaluation. 

any  material 

impacts 

in  particular 

Chapter 8 has been revised to better justify 
the  preferred  option, 
the 
rationale  for not introducing  exemptions  as 
well  as  to  clarify  the  consistency  with 
GDPR.  
The report has been extensively amended in 
Chapter  7  ‘Comparison  of  options’,  where 
the  baseline,  used  as  point  of  comparison 
for assessing other options, has been scored 
as zero. To clarify the comparison between 
options  and  between  the  baseline  and  the 
various  options,  new  paragraphs  have  been 
added to Chapter 7 as well as a new chart to 
visually illustrate the comparison.  
To better justify and examine the impact of 
the  clarifications  of  the  Directive  resulting 
from  the  evaluation,  section  6.2.5  ‘Impact 
administrative 
of 
cooperation’ 
and 
revised 
expanded.  In  addition,  to  better  link  the 
impact  assessment  with  the  evaluation,  a 
new  annex  (annex  8)  was  added  where 
precise 
the 
evaluation,  its  executive  summary  and  its 
supporting study is made available.  

information  on 

strengthening 

reference 

been 

has 

62 

 
 
 
 
 
 
Evidence, sources and quality 

The  evidence  for  the  impact  assessment  report  was  gathered  through  various  activities 
and from different sources:  

  Consultation  with  the  Working  Party  IV  Commission  Expert  group  on  direct 

taxation  

  The evaluation of Council Directive 2011/16/EU  
  Targeted consultation with representatives of the platforms’ sector  
  A targeted consultation  addressed to  tax authorities on  the problems covered by 

the initiative and possible solutions  

  A public consultation 
  Feedback on the inception impact assessment  
  Desk research 
  Project  group  led  by  Member  States  on  “digital  and  data”  and  endorsed  by 

TADEUS 

63 

 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION  

Introduction  

For  the  preparation  of  this  initiative,  the  Commission  designed  a  stakeholder´s 
consultation  strategy,  which  is  summarized  in  this  synopsis  report.  The  aim  of  the 
synopsis report is to present the outcome of the consultation activities and to show how 
the input has been taken into account. 

The  consultation  strategy  encompasses  both  public  and  targeted  consultations.  Further 
details are given in the chart below: 

Methods of consultation 

Inception Impact 
Assessment (feedback 
mechanism) 

Stakeholder group 

Academic/research 
institution 
Business 
association 
Company 
EU citizen 
Non-EU citizen 
Trade union 

Consultation 
period 

Objective/Scope of consultation 

7 Feb-6 March 
2020 

Collect feedback on the inception impact 
assessment outlining the initial structure 
of the project 

Member 
States 

Public authorities 

18 Feb-9 
March 2020 

TADEUS 
forum  

Public authorities 

Public authorities 

17/18 Sept 
2019 
20 February 
2020 

26 February 
2020 

Gather data about size of platform 
digital economy sector and tax gap due 
to underreporting 
Investigate the need of EU action  
Define possible scope of an EU 
initiative  
Analyze the issue and policy response in 
relation to platform sellers 
Seek head of tax administrations support 
for strengthening the administrative 
cooperation framework in direct taxation 
Gather views of experts from national 
authorities on the need for EU action 
and on possible policy design 

Public authorities 

3 March 2020 

Gather views of Member States and 
gather views to policy design 

Targeted 
Consultation 

Expert group 
for Member 
States  
High Level 
Working 
Party on 
Taxation 

Stakeholder´s 
meetings 

Businesses involved 
(platforms) 

27 February 
2020 

Gather experience from platform 
operators on their current reporting 
requirements  
Gather views on a possible EU initiative  

Public Consultation 

Academic/research 
institutions 
Business 
association 
Company 
EU citizen 
Non-EU citizen 
NGOs 
Trade union 

10 Feb-6 April 
2020 

Ascertain the views of a broad range of 
stakeholders mainly on the added value 
of a European action and the potential 
scope of the initiative 

64 

 
 
Annex table 1 Overview of consultation activities 

The main objectives of the different consultation streams are: 

-  Provide  stakeholders  and  the  wider  public  with  the  opportunity  to  express  their 

views on all relevant elements. 

-  Gather specialised input to support the analysis of the impact of the initiative. 
-  Contribute to design the technical aspects of the future initiative. 
-  Satisfy  transparency  principles  and  help  to  define  priorities  for  the  future 

initiative. 

As reflected above by the different methods of consultation used and stakeholders groups 
reached,  the  stakeholder  consultation  strategy  has  formed  an  integral  part  of  the  policy 
development  process.  The  consultation  began  with  the  launch  of  the  Inception  Impact 
Assessment  published  on  7  February  2020  and  continued  until  6  April  2020  when  the 
public consultation ended. 

Consultation participation 

1.  Feedback on the inception impact assessment feedback 

The consultation period through this feedback mechanism took place between 7 February 
and 6 March 2020 via the Commission website98. The period started when the inception 
impact assessment was published outlining the initial structure and options of the project. 
Eleven  comments  were  submitted  during  this  consultation  period  by  the  following 
categories of stakeholders: 

Annex  figure  1:  categories  of  stakeholders  commenting  on  the  inception  impact 
assessment  

98  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12157-Strengthen-the-exchange-
of-information-framework-in-the-field-of-taxation- 

65 

 
 
 
 
 
 
 
 
                                                 
Categories of stakeholders 

1 [CATEGORY 
NAME] 

1 [CATEGORY 
NAME] 

2 [CATEGORY 
NAME]s 

1 [CATEGORY 
NAME] 

6 [CATEGORY 
NAME]s 

2.  Targeted consultation 

a.  Targeted consultation of Member States via EU survey 

The  targeted  consultation  of  Member  States  focused  on  the  possibility  to  introduce 
reporting requirements  for platform operators.  Its  purpose was to  outline the context  of 
the problem, gather data about the size and compliance of the platform digital economy 
and  check  Member  States’  views  regarding  policy  options,  and  possible  evidence  to 
support  policy  options.  The  questionnaire  (made  of  34  questions)  was  published  on  10 
February  2020  and  it  covers  all  impact  assessment  elements  as  regards  to  the  problem 
identification, subsidiarity check, different options and impacts. Member States were able 
to provide feedback until 9 March 2020. However, the late answers have also been taken 
into account.  

22 contributions were received on this targeted consultation from: 

Austria  
Belgium 
Croatia  
Cyprus  
Czechia 
Denmark  
Estonia  
Finland 
France  
Germany 
Greece  

Ireland 
Italy  
Lithuania  
Luxembourg  
Malta  
Netherlands  
Poland  
Slovak Republic 
Slovenia  
Spain 
Sweden 

In addition to the answers provided in the questionnaire, respondents had the possibility 
to  upload  a  position  paper  or  document.  Position  papers  were  submitted  by  Austria, 

66 

 
 
 
 
 
 
 
 
 
Estonia,  Poland  and  Sweden.  These  documents  complemented  their  answers  and  gave 
more details on their submissions.  

b.  TADEUS forum 

The Tax Administration EU Summit (TADEUS)99, as a cooperation network for the EU 
Member  States’  heads  of  tax  administrations  and  the  Commission,  met  in  Helsinki,  on 
17-18 September 2019, for the first TADEUS Plenary meeting with the presence of the 
head of tax administrations of the 27 EU Member States.  

The Heads of tax administrations endorsed the findings of the ‘Digital and data’ project – 
on  reporting  requirements  for  the  sharing  and  gig  economy  -  led  by  Finland,  which 
provided a sound technical basis for possible future policy and technical initiatives. 

c.  Targeted consultation via an expert group (Working Party IV) 

On 26 February 2020, the Working Party  IV  expert  group met in  Brussels  to  discuss a 
possible  proposal  for  an  amendment  to  Directive  2011/16/EU  as  regards  measures  to 
strengthen  the  exchange  of  information  framework  in  the  field  of  direct  taxation.  The 
meeting  focused  on  the  reporting  and  exchange  of  information  on  income  and  made 
through digital platforms. The meeting benefitted from the participation of delegates of 
the 27 Member States. 

d.  High Level Working Party on Taxation  

The  High  Level  Working  Party  on  Taxation  met  on  3  March  2020  and  discussed  the 
future of the Directive on Administrative Cooperation, on the basis of a discussion paper 
prepared  by  the  Presidency.  19  Member  States  took  the  floor  and  all  expressed  their 
strong  support  to  an  expansion  of  the  existing  Directive  to  encompass  the  sharing  of 
information  reported  by  platform  operators.  They  also  emphasised  the  importance  of 
advancing  quickly  on  this  file.  While  Member  States  value  an  alignment  with  OECD 
work,  they  also  saw  scope  for  going  beyond  OECD  work,  for  example  in  terms  of 
activities  in  the  scope  of  the  proposal.  Several  Member  States  also  mentioned  the 
importance  of  clarifying/working  further  on  existing  aspects  of  the  Directive  (e.g. 
definition  of  foreseeable  relevance,  or  group  requests)  in  order  to  improve  its 
effectiveness.  

e.  Targeted consultation via a stakeholders’ meeting 

On  27  February  2020,  a  meeting  with  platforms  representatives  was  held  in  Brussels. 
Platforms  operators  active  in  different  sectors  were  represented:  accommodation, 

99 https://ec.europa.eu/taxation_customs/news/tadeus-%E2%80%93-tax-administration-eu-summit_en 

67 

 
 
 
 
 
 
 
                                                 
transportation, on-demand labour and sale of goods. Large but also small platforms were 
represented. 

The  objective  of  the  meeting  was  to  gather  views  from  stakeholders  on  their  current 
experience with reporting requirements based on national provisions, as well as to gather 
their views on a possible EU initiative to provide tax administrations with information on 
taxpayers who generate income and revenues through the digital platform economy. 

3.  Public Consultation 

The  public  consultation  was  launched  on  10  February  2020.  It  remained  open  until  6 
April 2020 for a total of 8 weeks. An exemption from the usual 12 week limit has been 
granted, due to the need to respect the overall political timeline of the initiative100. To this 
purpose, it is worth highlighting that OECD routinely relies on shorter deadlines for even 
more widespread tax reform proposals and, nevertheless, receives quality input.  

In  addition  to  the  general  identification  questions,  the  questionnaire  of  the  public 
consultation  consisted  of  22  questions  which  cover  all  impact  assessment  elements  in 
terms of problem, subsidiarity, options and impacts of the initiative. They were divided 
into two sections: one regarding digital platforms (16 questions) and one concerning joint 
tax audits (6 questions). Stakeholders could also upload additional contributions. In order 
to  increase  the  visibility  of  the  public  consultation,  the  Commission  promoted  this 
consultation  on  social  media.  Despite  the  diversity  of  channels  used,  the  number  of 
contributions received remained small. Such a limited response to the public consultation 
could be explained by the rather widespread support and non-contentious character of the 
initiative at stake. 

In  total,  37  responses  were  received  (16  of  them  chose  to  attach  position  papers  in 
addition  to  the  replies  to  the  standardized  questions),  coming  from  the  following 
respondents: 

100https://ec.europa.eu/info/sites/info/files/better-regulation-guidelines-stakeholder-consultation.pdf 

68 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Annex figure 2: categories of stakeholders commenting on the public consultation  

Categories of stakeholders 

Other

Trade Union

Public Authority

Academic/Research institution

NGO

Business Association

1 

1 

1 

1 

4 

4 

Company/Business organization

8 

EU citizen

17 

0

2

4

6

8

10

12

14

16

18

In terms of breakdown among origin countries of the respondents, the chart below shows 
a diverse representation: 

Annex figure 3: stakeholders’ origin country 

Stakeholder's country of origin 

8 

8 

4 

4 

3 

3 

2 

1 

1 

1 

1 

1 

AU

BE

DE

DK

FI

FR

IR

IT

LU

NL

PL

US

9

8

7

6

5

4

3

2

1

0

In terms of publication privacy settings, 18 respondents agreed to transparency regarding 
their personal details and 19 answered as anonymous participants. From the point of view 
of the size of the organizations involved, 5 are micro (1 to 9 employees), 4 small (10 to 
49 employees), 3 medium (50 to 249 employees) and 8 large (more than 250 employees). 

69 

 
 
 
 
 
 
 
 
 
 
From the replies received, at least 9 of them acknowledged being occasional or regular 
sellers on platforms (selling goods or offering services). 

Sixteen  position  papers  were  submitted  by  stakeholders  in  addition  to  the  answers 
provided  by  them  to  the  standardized  questionnaire.  Position  papers  were  submitted, 
mainly, by platforms and business associations.  

Methodology and tools for processing the data 

The  consultation  activities  allowed  for  the  collection  of  data  of  both  qualitative  and 
quantitative nature, which were processed and analysed systematically. Qualitative data 
was  structured  according  to  key  themes.  Quantitative  data  (including  survey  responses 
and  figures  provided  by  stakeholders)  was  processed  using  Excel  spreadsheet,  and 
analysed  using  statistical  methods,  ensuring  the  appropriate  protection  of  personal  data 
without publishing the information of the respondents that did not give their consent.  

Consultation results 

1.  Inception impact assessment feedback  

Overall,  the  initiative  to  create  a  unified  EU  framework  for  reporting  obligations  was 
welcomed by all the stakeholders involved. Several comments concerned the significant 
exposure of digital economy to fraud and the need of harmonizing the direct and indirect 
taxation reporting obligations for platforms.  

In more specific terms, two respondents supported the possibility of carving out from the 
scope of the initiative several  platforms for reason of low turnover or recently  creation 
(such  as  start-ups)  and  2  were  in  favour  of  including  non-EU  based  platforms  under 
scope.  One  feedback  was  received  regarding  the  need  of  reinforcing  the  joint  audit 
regulation in order for them to be concluded with a single fact finding report and to set 
out a harmonized framework for both direct and indirect taxation on joint audits field. 

2.  Targeted consultation 

a.  Targeted consultation of Member States via EU survey 

As  an  overview  of  all  the  feedbacks  received,  Member  States  considered  a  unified  EU 
framework for reporting obligations by platforms as an important simplification measure 
that would contribute to the well-functioning of the single market.  

Going through the specific questions, overall, 19 Member States perceived that there is a 
significant lack of reporting, for taxation purposes, of revenues obtained through digital 
platforms  which  negatively  impacts  fair  competition  between  the  traditional  economy 
and the digital platform economy. Therefore, the vast majority of respondents (19 out of 
22) agreed on the fact that there is a significant risk of tax avoidance, evasion or fraud as 
regards activities carried out through a digital platform.  

70 

 
 
 
 
 
 
 
 
 
 
 
Concerning the type of activities carried out through digital platforms, higher risk of tax 
avoidance  was  attributed  to  accommodation  services,  while  other  sectors  such  as 
transportation  and  delivery  were  also  perceived  as  high  risk  in  terms  of  tax  evasion. 
Member  States  also  considered  sales  of  good  as  a  type  of  activity  carried  out  through 
digital platforms that may carry a medium-high risk of tax misconduct. 

Most of Member States reported facing difficulties in providing factual data on the size 
of  the  problem  (extent  of  underreporting  of  income  and  revenues  generated  through 
platforms)  and  the  size  of  the  digital  platform  sector  itself.  The  reason  for  this  lack  of 
evidence is that there are no methodologies in place to make overall estimates in the field 
of platforms. 

12  Member  States  stated  having  a  legislation  and  or  administrative  guidance  in  place 
whereby platform  operators would have to  report information  to  tax administrations on 
sellers active on their platform, while other 4 are planning to introduce such legislation or 
administrative  guidance.  Besides  this,  most  Member  States  have  conducted  compliance 
activities  targeting  transactions  facilitated  by  platforms  such  as  audits,  letters  or 
information campaigns. 

14  Member  States  supported  that  both  providing  a  service  or  selling  goods  should  be 
subject  to  reporting by  the platform  operators to  the relevant  tax administration and all 
the  Member  States  considered  that  digital  platform  operators  should  have  the  same 
reporting obligations for tax purposes throughout the EU (i.e. single set of rules). There 
also  was  unanimity  in  recognizing  that  EU-wide  approach  will  be  more  effective  to 
tackle tax evasion (Member States generally agreed on the fact that, individually, they are 
not sufficiently equipped to track revenues generated through digital platforms). 

16 Member States considered that all platforms should be subject to the same reporting 
obligations  (to  avoid  potential  loopholes)  and  19  Members  States  remarked  that  if  EU 
rules were adopted, they should apply to all platform operators, including those resident 
outside the EU. 

As  far  as  sellers  are  concerned,  16  replies  supported  that  all  providers  of  services  or 
sellers  of  goods  through  digital  platforms  should  be  reported  to  the  relevant  tax 
administrations without exemption. A broad majority of Member States considered that 
digital platform operators should report information on cross-border transactions and also 
on  transactions  where  the  seller  is  resident  in  the  same  Member  State  as  the  platform 
operator. 

On how the information should be exchanged, 11 out of 22 responses considered bilateral 
exchanges across tax administrations (similar to DAC1 and DAC2) as the preferred way 
for a satisfactory outcome. 8 respondents out of the 22 expressed their preference for a 
central  repository  (for  example,  the  current  exchanges  under  article  8a  of  Directive 
2011/16,  as  is  currently  done  for  DAC3  exchanges).  3  respondents  said  that  it  was  too 
early at this stage to be able to say which technical solution would be most appropriate. 

71 

 
 
 
Annex figure 4: Results from selected questions from the targeted consultation for 
Member States

The  four  separate  contributions  (position  papers)  submitted  during  the  targeted 
consultation  focused  on  more  generic  comments.  One  of  them  stressed  the  link  that, 
according  to  its  view,  must  be  made  between  direct  and  indirect  taxation  platforms 
reporting obligations. This contribution asked for extending the scope of the indirect tax 
measures  to  cover  also  direct  taxation  purposes.  Another  Member  State  provided  some 
data  available  about  the  size  of  platforms  sector  and  the  tax  gap  existing  in  its  own 
territory.  

On a more specific basis, the other two countries expressly highlighted the importance of 
the compulsory requirement of sharing the Tax Identification Number and the preference 
of  other  Member  States  on  imposing  reporting  obligations  over  the  platforms  where 
underlying services are supplied and not where platforms have their residence.  

b.  Targeted consultation via expert group (Working Party IV)101  

101 Information on this Commission expert group is available at: 

https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail&groupID=953&NewS
earch=1&NewSearch=1  

72 

 
 
 
 
                                                 
 
Several  countries  mentioned  that  they  have  legislation/administrative  guidance  in  place 
whereby platform operators should report information on sellers (although with different 
scopes)  while  some  of  them  have  concluded  agreement  with  platforms  to  report 
information on voluntary basis.  

The Member States raised concerns about tax gaps and underreporting, however limited 
data  were  available  about  the  size/profile  or  tax  gap  estimation  of  digital  platform 
economy. 

Overall,  broad  support  was  laid  down  for  a  possible  EU  initiative  for  a  common  EU 
framework on reporting obligations for income earned by sellers via digital platforms and 
a general call for alignment with OECD model rules for reporting by platforms operators. 
Regarding activities in scope, a vast majority of Member States supported leveraging the 
new initiative to achieve a broad scope including provision of services and sale of goods 
(going beyond the OECD proposal). 

Regarding platforms in scope, some Member States were favourable to an exemption for 
start-ups.  The  majority  of  them  supported  that  platforms  based  outside  the  EU  should 
also be included in order not to distort competition. On the area of potential exemptions 
for sellers, a few countries supported the setting up of reasonable, minimum threshold of 
revenues for sellers to be reported.   

About  the  information  to  be  collected,  overall  support  was  set  out  to  include  the  same 
requirements  than  under  OECD  approach,  without  excluding  however  some  possible 
additional  data  fields.  There  was  general  support  for  including  account  numbers  to  the 
information to share for really identifying the beneficial owner of the operation and place 
of birth was also acknowledged as important to ensure a matching of the data. 

c.  Targeted consultation via stakeholder´s meeting  

There  was  general  consensus  on  the  benefits  of  having  a  standardised  EU  legal 
framework  for  gathering  information  from  platforms  compared  to  several,  different, 
national reporting rules. There was a preference for following a similar approach to the 
OECD model rules.  

On the other hand, no opposition was expressed about including platforms active in the 
sale  of  goods  in  the  activities  in  scope.  Regarding  platforms  in  scope,  participants 
claimed that the platforms based outside the EU should be in the scope to  avoid  unfair 
competition and a shift of platforms outside of Europe (uneven playing field).  

About the possibility of setting up an exemption for start-ups (e.g. for the first 3 years of 
existence),  it  was  remarked  that  this  may  trigger  difficulty  to  report  data  on  all  sellers 
after 3 years of exemption. Some participants supported a reasonable and clear threshold 
above which the requirement to report sellers would apply. Their main concern was the 
fact that reporting (thus, collecting data) from the beginning might discourage sellers to 

73 

 
 
 
 
 
 
 
 
 
 
use the platforms. Other participants stated that is easier for them report about all sellers 
without any exemption.  

Regarding the information to be collected and reported, commitment with proportionality 
principle was raised as important to all participants (no more data than strictly needed for 
tax purposes). Some platforms requested that the information that should be required by 
this potential new initiative should be adapted to each sector given the different nature of 
the activities carried out in each of them. 

The  participants  asked  for  more  alignment  between  direct  and  indirect  taxation 
information  gathering  obligations.  In  particular,  they  advocated  for  one  stop  shop 
solution  (to  report  the  information  just  to  the  tax  administration  where  the  platform  is 
resident  in  Europe).  Finally,  some  concerns  were  raised  about  being  compliant  with 
taxation obligations and GDPR to make them compatible. 

3.  Public Consultation  

A  concerted  effort  was  made  to  ensure  that  the  views  and  concerns  of  all  affected 
stakeholders  were  carefully  considered  throughout  the  impact  assessment  exercise.  In 
particular, it was the case in the analysis of the policy options.  

Overall, there has been a strong support to lay down a single set of rules across the EU 
for digital platforms to have the same reporting obligations for tax purposes throughout 
the  EU  (28  affirmative  responses  out  of  37).  The  reason  might  be  that  most  of  the 
respondents  consider  that  common  reporting  obligations  in  the  EU  would  reduce  the 
administrative  burden  for  platforms  and/or  sellers,  while,  at  the  same  time,  ensuring  a 
level  playing  field  with  traditional  service  providers  (25  out  of  37  confirm  this 
statement). 

In relation to the digital platforms and sellers in scope, 18 and 19 respondents out of 33 
and 23 valid answers respectively deem that all platforms and all providers of services or 
sellers  of  goods  should  be  subject  to  the  same  reporting  obligations  in  order  to  avoid 
potential  loopholes.  Although  still  representing  the  majority,  it  shows  a  slightly  lower 
support  for  a  broad  scope  both  in  relation  to  platforms  and  sellers  than  in  the  targeted 
consultation of Member States. 

In relation to the perception of the problem, the majority of the respondents (20 out of 33 
valid answers102 to this question) agree with the statement that there is a significant lack 
of reporting, for taxation purposes, of revenues obtained through digital platforms. 20 out 
of 32 valid replies consider that this underreporting of revenues obtained through digital 
platforms  negatively  impacts  fair  competition  between  the  traditional  economy  and  the 

102 Note that for each question, all replies are considered valid except for “no answer” ones. 

74 

 
 
 
 
 
 
 
 
 
                                                 
digital platform economy.  Similarly, most of them believe that individual EU countries 
are not sufficiently equipped to track revenues generated through digital platforms 

As result of the above perception, 25 out of 37 respondents consider that there is a risk of 
tax  avoidance,  evasion  or  fraud  as  regards  activities  carried  out  through  a  digital 
platform,  which  is  especially  high  in  the  provision  of  services.  Regarding  the  type  of 
services  offered  through  digital  platforms  that  are  considered  as  carrying  a  more 
significant  risk  of  tax  avoidance,  evasion  or  fraud:  accommodation  services  score  the 
highest, followed by household and transportation services. 

These graphics show the feedback of the respondents to the public consultation regarding 
the main policy options: 

Annex figure 5: Public consultation results – respondents’ opinions on main policy 
options 

20
18
16
14
12
10
8
6
4
2
0

20
18
16
14
12
10
8
6
4
2
0

Sellers under scope 

19 

12 

2 

4 

Don't know

No answer

All should report as
such exemption could
lead to potential
loopholes

Some providers of
services or sellers of
goods should benefit
from an exemption

Platforms under scope (size) 

18 

13 

2 

4 

Don't know

No answer

All platforms should
be subject to the
same reporting
obligations

Some platforms
should benefit from
an exemption (for
example start-ups)

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the field of joint audits, there is an agreement among the respondents on the need to 
revise the EU legal framework to include some more specific details, in particular 27 out 
of 37 answers confirm this support. 

Furthermore, 21 out of 27 valid replies consider that each joint audit should finish with a 
single  agreed  report  and  the  vast  majority  also  deem  that  the  tax  administrations 
participating  in  the  joint  audits  should  be  obliged  to  reach  agreement  on  a  report  (i.e. 
facts and legal interpretation of facts). 

Finally 23 participants in the public consultation stress that tax administrations should be 
obliged to participate in a joint audit when they receive a request to this end from one or 
more  other  tax  administrations,  while  27  of  them  affirm  that  the  taxpayer  should  be 
granted the right to request a joint audit. 

From  the  inputs  received  as  position  papers  by  stakeholders,  it  is  worth  to  stress  the 
general  support  to  both  parts  of  the  initiative  addressed  by  the  public  consultation: 
platforms sharing information requirements and a stronger joint audit legal framework.  

On  platforms  reporting  obligations,  the  most  recurrent  comments  from  stakeholders 
(mainly, platforms and business associations) are: the need of alignment between direct 
and  indirect  taxation  obligations  and  with  the  OECD  model  rules;  keeping  the 
information  requirements  as  easy  and  as  costless  as  possible;  setting  out  a  reasonable 
timeframe  that  make  it  possible  for  platforms  to  implement  the  new  rules;  and 
establishing a streamlined mechanism to  facilitate information  sharing within the home 
country instead of with each tax administration where platforms are based. 

Broad agreement  is  also achieved  regarding the  necessity of being  respectful of  GDPR 
rules.  Some  statements  are  supportive  of  the  idea  of  adapting  the  information 
requirements to the specific sector involved. One participant requests a fully automated 
system provided by tax authorities to verify information gathered from sellers; otherwise, 
the platforms should not be accountable for data accuracy. 

Overall, a broad scope approach is preferred by the respondents whereas some of them 
support  exemptions  on  small  platforms,  to  avoid  entry  barriers  in  the  digital  sector,  or 
exemptions on small sellers, to prevent tax administrations from being overloaded with 
big amount of data. 

When  it  comes  to  joint  audit,  general  consensus  is  reached  about  the  need  of 
strengthening the current EU framework.  It  is  suggested by one respondent  to  follow a 
two-step  approach  in  its  implementation  and  making  it  applicable  to  third  countries. 
Alleviating  duplication  of  work  should  be  one  of  the  main  goals  according  to  several 
stakeholders.  Furthermore,  the  more  limited  capacity  of  some  countries  to  deal  with 
compulsory joint audits is raised by one position paper. 

76 

 
 
 
 
 
 
 
 
 
 
The importance of monitoring the transposition of EU rules at national level was flagged 
as important in order to ensure consistency across Member States. 

Conclusions 

The results of the public and targeted consultations allowed the Commission to collect a 
significant number of views and opinions on the initiative. 

Both public and targeted consultations showed wide agreement about the existence of the 
problems  identified  in  the  impact  assessment:  underreporting  of  income  and  revenues 
earned  through  the  digital  platform  economy  and  inefficiencies  in  the  current  EU 
administrative cooperation framework, such as in the area of joint audits.  

Regarding the reporting and sharing of information gathered by digital platforms, a broad 
majority of stakeholders (Member States,private entities and citizens) agreed on the need 
for a European framework for reporting obligations in favour of achieving a sound level 
playing field and a true single market.  

Concerning joint audits, the public consultation stressed the need to step up their role on 
the administrative cooperation framework at European level.  

Finally,  it  is  worth  noting  that  the  feedback  received  throughout  the  public  and  the 
targeted  consultations  has  been  used  to  inform  the  choice  of  the  preferred  policy 
options/sub-options.  

77 

 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 3: WHO IS AFFECTED AND HOW? 

Practical implications of the initiative 

Under the preferred option, the initiative is meant to provide a EU legal basis for setting 
up an information system whereby: a) platforms will collect and transmit periodically to 
tax administrations tax relevant information about income and revenues earned by sellers 
through platforms; b) tax administrations will then exchange this information with each 
other to use it for the administration and enforcement of relevant tax laws in the Member 
States (e.g. personal income tax code).   

Summary of costs and benefits 

In the table below, the benefits of each option are calculated as the lower bound of the 
2018  estimate.  This  is  a  conservative  estimate,  but  should  be  informative  for  policy-
making purposes. 

I. Overview of Benefits (total for all provisions) – B1 Limited Scope (€ million) 

Description 

Amount 

Comments 

Direct benefits 

Tax Revenues 

1 135 

Lower bound, including 20% tax rate and all platforms. 

Tax fairness 

Strengthening  the  EU 
social market economy 

n/a 

n/a 

Improving 
playing field 

the 

level 

n/a 

Indirect benefits 

Improvement  in  tax  fairness  perception,  resulting  from 
taxpayers paying their fair share. 

European  businesses  would  benefit  from  having  lower 
overall  compliance  costs  through  having  homogeneous 
requirements, rather than having multiple standards across 
each Member States. This would make it easier to comply 
with existing tax rules and would improve tax morale. 

European providers of goods and services that are currently 
compliant  with  the  tax  rules  would  benefit  from  ensuring 
their competitors also pay their fair share.  

I. Overview of Benefits (total for all provisions) – Intermediate Scope (€ million) 

Description 

Amount 

Comments 

Direct benefits 

Tax Revenues 

1 300 

Lower bound, including 20% tax rate and all platforms. 

Tax fairness 

n/a 

Improvement  in  tax  fairness  perception,  resulting  from 
taxpayers paying their fair share. 

Indirect benefits 

78 

 
 
 
 
 
 
 
 
 
Strengthening  the  EU 
social market economy 

n/a 

Improving 
playing field 

the 

level 

n/a 

European  businesses  would  benefit  from  having  lower 
overall  compliance  costs  through  having  homogeneous 
requirements, rather than having multiple standards across 
each Member States. This would make it easier to comply 
with existing tax rules and would improve tax morale. 

European providers of goods and services that are currently 
compliant  with  the  tax  rules  would  benefit  from  ensuring 
their competitors also pay their fair share.  

I. Overview of Benefits (total for all provisions) – Full Scope (€ million) 

Description 

Amount 

Comments 

Direct benefits 

Tax Revenues 

2 647 

Lower bound, including 20% tax rate and all platforms. 

Tax fairness 

n/a 

Strengthening  the  EU 
social market economy 

n/a 

Improving 
playing field 

the 

level 

n/a 

Indirect benefits 

Improvement  in  tax  fairness  perception,  resulting  from 
taxpayers paying their fair share. 

European  businesses  would  benefit  from  having  lower 
overall  compliance  costs  through  having  homogeneous 
requirements, rather than having multiple standards across 
each Member States. This would make it easier to comply 
with existing tax rules and would improve tax morale. 

European providers of goods and services that are currently 
compliant  with  the  tax  rules  would  benefit  from  ensuring 
their competitors also pay their fair share.  

(1) Estimates are relative to the baseline for the preferred option as a whole (i.e. the impact of individual actions/obligations 
of  the  preferred  option  are  aggregated  together);  (2)  Please  indicate  which  stakeholder  group  is  the  main  recipient  of  the 
benefit in the comment section;(3) For reductions in regulatory costs, please describe details as to how the saving arises (e.g. 
reductions in compliance costs, administrative costs, regulatory charges, enforcement costs, etc.; see section 6 of the attached 
guidance). 

Overview of costs – B1 limited scope 

Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

250 

30 

56 

10 

Administrative 
costs  

Direct  

Indirect  

Overview of costs – B2 intermediate scope 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

500 

60 

110 

19 

Overview of costs – B3 full scope 

Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

875 

105 

110 

19 

Administrative 
costs  

Direct  

Indirect  

Administrative 
costs  

Direct  

Indirect  

II. Overview of costs – Preferred option 

Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

- 

- 

       875 

Direct costs 

Indirect costs  - 

Full 
scope 
(services 
and 
goods)  
(1) Estimates to be provided with respect to the baseline; (2) costs are provided for each identifiable action/obligation of  the 
preferred option otherwise for all retained options when no preferred option is specified; (3) If relevant and available, please 
present information on costs according to the standard typology of costs (compliance costs, regulatory charges, hassle costs, 
administrative costs, enforcement costs, indirect costs; see section 6 of the attached guidance). 

        105 

      189  

     31,5 

- 

In  addition  to  economic  costs  and  benefits,  there  are  social  benefits,  that  is  non-
monetisable  benefits,  in  particular  tax  fairness  perception  and  strengthening  of  the  EU 
way of life / social market economy. 

80 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 4: ANALYTICAL METHODS 

Calculating the total value of transactions on platforms in EU-27 

In this section, we elaborate on the choices and alternatives for each option in terms of 
scope of reporting. 

In order to estimate the total value of EU transactions occurring on all platforms in the 
accommodation-sharing sector and the transport sector, we divide the total value of 
EU transactions of the market leader (T) by their European market share (M): 

V = T/ M  

The  total  value  of  European  transactions  in  2018  of  the  market  leader  (T)  in  the 
accommodation sector was estimated at € 10.3 billion. This was obtained by multiplying 
the following terms: the total number of overnight stays in the United States and Europe 
in  2018  (156  million,  according  to  Zhang  et  al.,  2016,  assuming  a  17%  yearly  growth 
rate), the share of those stays that occurred in Europe (60%)103 and the average EU daily 
rate (which we take to be € 110)104. The European market share of the main player in the 
European P2P accommodation transacted on platforms (M) was taken to be 60%. While 
there  is  no  definitive  data  on  the  market  share  of  each  player,  our  approximation  is 
relatively conservative. The value represents the total market share of the main player, as 
a  share  of  the  market  share  of  all  players  in  the  online  short-term  accommodation 
sector.105,106  Dividing  10.3  by  0.6  gives  the  total  value  of  transactions  on  the  European 
market, estimated at EUR 17.2 billion. 

According to our estimates, the total value of transactions occurring on platforms in 
2018 in the EU-27 peer-to-peer transport sector was approximately € 6.3 billion. We 

103  This  value  was  estimated  as  the  fraction  of  the  direct  economic  impact  of  the  market  leader  (host 
earnings + guest spending) attributable to EU countries, which was estimated by Airbnb (2019) at almost 
50%.  Our  number  represents  an  approximation  of  the  economic  impact  coming  from  EU  countries  not 
included  in  the  original  data,  taking  into  account  that  a  large  share  of  listings  are  in  Western  Europe. 
Source: Airbnb (2019). Airbnb Estimated Economic Impact Exceeds $100 Billion in One Year. Retrieved 
from: https://news.airbnb.com/airbnb-estimated-direct-economic-impact-exceeds-100-billion-in-one-year/ .  
104  The  average  daily  rate  of  hotels  in  Europe  in  2018  was  €  118  (STR,  2020).  Following 
iPropertyManagement (2020),  we assumed  Airbnb  was 10% cheaper than hotels, thus approximating the 
average  daily  rate  to  be  110  €.  Source:  Source:  STR  (2020).  Global  Hotel  Review  –  Constant  Currency 
from: 
Retrieved 
Edition. 
http://www.hotelnewsnow.com/Media/Default/PDFs/GlobalHotelReviewMediaVersionConstantCurrencyE
dition_December_2019.pdf  ).  Source:  iPropertyManagement  (2020).  Airbnb  Statistics.  Available  from: 
https://ipropertymanagement.com/research/airbnb-statistics. 
105  The  market  shares  comes  from  DBS  Group  Research  (2019).  The  60%  market  share  is  the  result  of 
dividing  the  largest  share  of  the  largest  platform  by  the  sum  of  the  two  largest.  We  ignored  smaller 
platforms  from the calculation, as they  were  only present  in  Asia.  Source: DBS Group  Research (2019). 
The Rise of the Home Sharing Platforms. Friend, Foe, Frenemy? Sector Briefing 79, DBS Asian Insights. 
Available 
at: 
https://www.dbs.com/aics/templatedata/article/generic/data/en/GR/082019/190802_insights_HSP.xml 
106  The  60%  market  share  is  also  in  line  with  European  Commission  (2018).  Study  to  Monitor  the 
Economic Development of the Collaborative Economy at sector level in the 28 EU Member States.  

81 

 
 
 
                                                 
used information on gross bookings and revenues from the annual reports of the market 
leader to approximate T, then divided that value by the market share in Europe to obtain 
an estimate of the size of the peer-to-peer transactions occurring in the EU on platforms 
in the transport sector. The value of gross bookings in the EU was not directly reported 
by  the  market  leader,  so  we  used  the  global  value  of  gross  bookings  (42.4  billion  in 
2018107), multiplied by the share of the EMEA region (Europe, Middle East and Africa) 
in  the  total  revenue  of  the  company,  which  was  15%  in  2018.108  The  final  result  was 
multiplied by 58%, the share of transactions occurring outside the United Kingdom in the 
EU-28.  

We estimate the total  value of transactions occurring on  peer-to-peer platforms in 
the finance sector in the EU-27 to be € 6.6 billion. We updated the sectoral estimates 
for  the  EU-27  in  Zhang  et  al.  (2016)  to  2018,  by  assuming  the  sector  experienced  the 
same yearly growth rates between 2013 and 2015 and 2015 and 2018.  

We estimate the total  value of transactions occurring on peer-to-peer platforms in 
the on-demand services sector to be € 6.1 billion in 2018 in the EU-27. This value is 
the average of the estimates in Vaughan and Daverio (2016) and European Commission 
(2018), which have been updated to represent 2018.  For Vaughan and Daverio (2016), 
we  took  on-demand  services  to  be  the  sum  of  the  sectors  “other  professional  services” 
and  “other  household  services”  and  assumed  they  continued  growing  at  20%  per  year 
between 2015 and 2018. This resulted in a total value of transactions of  € 4.6 billion in 
this sector in 2018, which was corrected for the EU-27 share of 96%, resulting in the € 
4.5 billion value seen in the third column of Table 2 in the main text. For the estimates in 
European  Commission  (2018),  we  used  the  sector  “online  skills”,  also  updated  with  a 
20% growth rate and the EU-27 share, which resulted in a total of € 7.8 billion. We then 
averaged the two measures to obtain our own estimate, of € 6.1 billion. 

We estimate the total  value of transactions occurring on peer-to-peer platforms in 
the  goods  sector  to  be  €  25  billion.  This  is  the  estimate  of  European  Commission 
(2017),  updated  to  2018  by  assuming  a  12%  yearly  growth  rate,  the  average  scenario 
used in the report. The value for EU-28 was transformed to EU-27 by removing the 17% 
represented by the United Kingdom. The weight of the United Kingdom was obtained by 
taking the average of the other sectors, weighted by the size of the transactions.  

(2020). 

Source:  Uber 

Financial  Report 

107 
https://investor.uber.com/news-events/news/press-release-details/2020/Uber-Announces-Results-for-
Fourth-Quarter-and-Full-Year-2019/  
108  This  estimation  implies  assuming  that  the  distribution  of  the  leader’s  revenue  is  the  same  as  the 
distribution  of  the  gross  bookings.  We  believe  it  is  likely  that  the  gross  bookings  in  the  EU  represent  a 
larger  proportion  of  the  total  revenue,  which  we  approximated  by  taking  the  entire  value  for  gross 
bookings, uncorrected for the fact that the share quoted represented the EMEA region.  

Press  Release.  Available 

from: 

2019 

82 

 
 
 
                                                 
Estimating the number of platforms potentially impacted  

Annex table 2 Estimates of the number of reporting platforms  

Estimates of the number of reporting platforms   

Own estimate 

Vaughan and 
Daverio (2016) 

187109 collaborative 
economy platforms 
founded in 8 MS (FR, BE, 
DE, PL, ES, IT, SE and 
NL in 2015).  
The study does not cover  
platforms in the “goods” 
sector.   

Average number of platforms 
founded per MS: 187/8 = circa 
25  (on the basis of Vaughan 
and Daverio (2016)) 

Average  number  of  “services” 
platforms  founded  in  the  EU: 
630  (based  on  a  generalisation 
to the whole EU: 25*27)  

To take into account both non-
EU founded and “goods” 
platforms, we assume an 
increase to about up to 1000 in 
an intermediate scope and 2000 
platforms in a full scope.  

Member States’ 
estimates  
(2020) 

Four Member States 
taking part to the 
targeted consultation 
provided an estimate of 
the number of platforms 
active in their jurisdiction, 
across all sectors.  

The average number of 
platforms out of these 
four respondents is 85 
platforms / MS.  

If this average value is 
multiplied for the EU27, 
the result is circa 2300 
platforms (85*27=2295).  

Own estimate of the total 
number of platforms in the 
EU:  
- 

intermediate scope: 1000 
platforms  
full scope: 2000 platforms  

- 

Own  estimate  of  the  average 
number of platforms per MS   
- 

scope: 

intermediate scope: circa 38 
(1000/27) 
full 
(2000/27) 
broadly 
This 
consistent  with  the  Member 
States’ estimates. 

value 

circa 

75 

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109 The study covered the UK as well. Including the UK, the number of platforms would be 275, and the 
average circa 30 per Member State.  

83 

 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
                                                 
We consider that circa 60 % of 
the platforms active in the 
services sector, are not active in 
finance-related services (lending 
and crowdfunding), based on 
Vaughan and Daverio 2016). 

n/a  

105 out of 187 platforms 
are active in the services 
sector, other than finance. 
The ratio of these 
platforms is: 
(105/187)*100 = circa 
60%.  

Own estimate of the total 
number of platforms in the 
EU:  
-  Limited scope: 600 

platforms (1000*60%)  

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The  number  of  platforms  potentially  affected  may  be  higher  than  the  own  estimates. 
According  to  data  extracted  from  Dealroom.co  database,  more  than  10,000  platforms 
could be impacted by the intervention, in its full scope. However, in particular taking into 
account  the  information  collected  from  Member  States’  targeted  consultation  and 
especially information from one case, a large Member State already operating a measure 
similar  in  scope  to  the  one  envisaged  by  this  intervention,  chapter  6  uses  the  more 
cautious, own estimates.   

Estimating one-off costs  

Annex table 3 Estimates of one-off costs 

Platforms  
(all) 

Estimates of one-off costs  

Own estimate 

European Commission, 
2019 
(DAC evaluation)110 

The estimation is based on 
the DAC 2 data, but it is 
lower for two main reasons: 
(a) the intervention does not 
impose due diligence 
requirements as strictly as 
DAC2; (b) the costs for 
DAC2 include also costs for 
implementing FATCA and 
CRS. The one-off cost per 
seller is estimated at €25. 

The overall costs of 
DAC2 for financial 
institutions amounted to 
530 € million (i.e. 10 
times the costs incurred 
by MS for  DAC2) 

Number of bank 
accounts reported under 
DAC2 (through 
automatic exchange of 
information): circa 9 

HMRC  
(CRS/DAC2 
impact 
assessment)
111 

For UK 
financial 
institutions 
only (around 
1,000 entities) 

One-off costs:  
£70m -£209m 

European 
Commission, 
2019 
(CESOP impact 
assessment)  

n/a 

110 
https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document_evaluation_on_d
ac.pdf  
111 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/413976/
TIIN_8148_tax_admin_automatic_exchange.pdf  

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
                                                 
EU-27 tax 
administrations  

The number of sellers to be 
reported is assumed to be:  
-  Limited scope: 10 million  
- 
Intermediate scope 20 
million 
full scope: 35 million  

- 

Own estimate of the one-
off costs for all platforms: 
from circa €250 million in the 
case of a limited scope to 
€850 million in case of a full 
scope. 

Own estimate of the one-
off costs for all EU tax 
administrations: between 
€54 million (limited scope, or 
10 million seller accounts 
multiplied by €5.4, the one-
off cost per account) to €189 
million (full scope, or 35 
million seller accounts 
multiplied by €5.4)  

Sellers to be handled 
(received and exchanged):  
- 
limited scope 10 million  
- 
intermediate scope 20 
million 
full scope: 35 million  

- 

million  

Based on the above 
elements, the average 
cost per account is  
circa €58, of which we 
assume 90 per cent one-
off and 10 per cent 
recurrent (based on the 
same breakdown 
between one-off and 
recurrent costs as for tax 
administrations). 

DAC2 initial costs up to 
2017:  
53.3 € million, of which 
92% for development 
and 8% recurrent costs.  

DAC2 accounts: 9 
million.  

Cost per account: circa 
€6, of which we assume 
90 per cent (€5.4) one-
off and 10 per cent 
(€0.6) recurrent.   

n/a 

For UK tax 
administration 
only: 
£2million   
(hybrid of one-
off and 
recurrent 
costs; they are 
meant to 
account for 
HMRC costs in 
developing IT 
systems to 
facilitate 
reporting, and 
store and 
analyse data)  

European 
Commission 

€ 0.8 million (one-off 
development costs)  

n/a 

n/a 

€1.8 million for 
set-up costs  

Estimating recurrent costs  

Table 16 Estimates of recurrent costs  

Estimates of recurrent costs  

Own 
estimate 

European Commission, 2018 
(DAC evaluation)112 

HMRC  
(CRS/DAC2 
impact 
assessment
)113 

European 
Commissi
on, 2018 
(CESOP 
impact 
assessme

112 
https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document_evaluation_on_d
ac.pdf  
113 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/413976/
TIIN_8148_tax_admin_automatic_exchange.pdf  

85 

 
 
 
 
 
 
 
 
 
 
 
 
  
                                                 
nt)  
n/a 

n/a 

Platforms  
(all) 

Between €30 
million in the 
case of a 
limited scope to 
€105 million in 
case of a full 
scope  

Overall recurrent costs of 
DAC2 for financial institutions 
were €53 million.  

Number of bank accounts 
reported under DAC2: circa 9 
million  

Based on the above, the 
average recurrent cost per 
account: circa €6  

Recurrent cost 
per seller to be 
reported: about 
€3  

For UK 
financial 
institutions 
only (around 
1,000 
entities) 

Average 
annual 
cost£2m -
£4m 

The number of 
sellers to be 
reported is 
assumed to be:  
- 
limited 
scope:  10 
million    
intermediat
e scope: 20 
million 
full  scope: 
35 million  

- 

- 

EU-27 tax 
administrations  

DAC2 costs:  
€5.3 million of recurrent costs  

DAC2 accounts: 9 million.  

Recurrent cost per account: € 
0.6  

Between  €6  
million  (limited 
scope)  and  
€21  million  
(full scope)  per  
year 

Recurrent cost 
per seller: € 0.6 

Sellers to be 
handled 
(received and 
exchanged):  
- 
limited 
scope: 10 
million 
intermediat
e scope: 20 
million 
full  scope: 
35 million  

- 

- 

For UK tax 
administratio
n only: 

£2million   
(hybrid of 
one-off and 
recurrent 
costs; they 
are meant to 
account for 
HMRC costs 
in 
developing 
IT systems 
to facilitate 
reporting, 
and store 
and analyse 
data)  

European 
Commission 

€ 0.1 million for 
yearly recurrent 
costs  

n/a 

n/a 

€ 0.96 
million, 
running  
costs   

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional information on assumptions used to estimate costs  

Why an estimate of 10 million sellers in case of a limited scope?  

  According  to  a  recent  Eurobarometer  on  the  collaborative  economy,    6%  of 
“Europeans  have  offered  services  via  collaborative  platforms  with  3%  having 
offered them once or a few times, 2% offering them  occasionally, and only 1% 
offering them on a regular basis.” 114 

  On  1  January  2019,  the  population  of  the  EU  was  estimated  at  513.5  million 
inhabitants.  Accounting  for  the  UK  withdrawal  from  the  Union  as  of  1  January 
2020, the EU population is circa 447 million.  

  Excluding  from  the  count  of  possible  sellers  on  platforms  children  (80  million) 
and  a  share  of  the  over  65  population  (overall,  about  100  million  people),  we 
estimate the potential maximum number of Europeans offering services  at 6 per 
cent of about 350 million, that is circa 20 million.  

  Not  all  those  who  offer  services  via  collaborative  platforms  do  so  for  the 
accommodation  and  transportation  sector.  We  assume  about  50  per  cent  of  the 
transport  and 
overall  sellers  for  services  (all)  do  provide  services  for 
accommodation. This gives the estimate of 10 million reportable sellers. This 
is based on the following: the transport sector (44%) is the sector most frequently 
mentioned  by  those  who  have  offered  services  via  collaborative  platforms, 
followed by the accommodation sector (35%).  

Why the one-off cost is estimated at € 25 per seller? 

  The new reporting requirement is somehow analogous to DAC2. According to the 
DAC evaluation, DAC2 costs for businesses (financial institutions) were about 10 
times higher than those incurred by tax administrations or circa € 530 million. We 
know  that  circa  90  per  cent  of  the  costs  (447  million)  were  one-off,  for 
development  and  setting  up  DAC2;  the  rest  10  per  cent  (53  million)  for 
operations.  We  could  divide  the  overall  costs  for  the  number  of  financial 
institutions affected but we do not have this number. Instead, we have the number 
of reported accounts under DAC2 (until 2017), which is 9 million.  

 

If we divide the one-off costs of DAC2 by the number of reported accounts, we 
obtain a substantive cost per account of (447/9) = €53. 

  We estimate the substantive cost per  seller  under  the  new  reporting  requirement 
at €25, or about half of the average DAC2 substantive cost per account. This is a 

114  Flash  Eurobarometer  467:  The  use  of  the  collaborative  economy.  The  JRC  Report  (2018)  “Platform 
workers in Europe” estimates the average ratio of platforms’ ‘sellers’ at 8% of the workforce,  in a sample  
of  14  countries,  ranging  from  9.9%  in  UK  to  4.1%  in  Finland,  an  estimate  close  to  the  findings  of  the 
Eurobarometer.  

87 

 
 
                                                 
 
simplistic  assumption,  but  underpinned  by  several  factors:    (a)  the  proposed 
intervention does not impose due diligence requirements on platform operators as 
strictly as DAC2 on financial institutions; (b) the costs for DAC2 include actually 
also costs for implementing FATCA and CRS. In addition, as the new reporting 
requirements  are  essentially  about  data  collection  and  gathering  and  the  core 
business  of  platforms  is  “data”,  we  assume  that  faced  with  a  comparable  data 
reporting  requirement  an  average  platform  would  incur  a  lower  cost  than  an 
average  financial  institution.  Finally,  we  assume  that  the  price  of  IT  services 
(especially memory) is lower in 2020 than when financial institutions had to bear 
the one-off costs of adapting to DAC2.  

Why the number of estimates sellers increase in the intermediate and the full 

scope?  

The estimated number of sellers is positively correlated to the width of the scope. In the 
full  scope  scenario,  for  instance,  we  have  to  account  for  both  sellers  of  services  and 
goods. We know that about  20 per cent  of EU consumers (or  about  70  million  people) 
buy online.  Yet, probably not all of them also sale goods online. We assume half of them 
does,  so  we  obtain  a  potential  number  of  sellers:  35  million.  This  number,  we  assume, 
includes the full range of sellers on platforms, both services and goods.  

Why a recurrent €3 cost per seller?  

  The  new  reporting  requirement  is  somehow  analogous  to  DAC2.  As  mentioned 
above and according to the DAC evaluation, DAC2 costs for businesses (financial 
institutions) were about € 530 million; out of which 10 % (53 million) were for 
operations.  

  Similar to the approach taken for substantive costs, we divide the recurrent costs 
of  DAC2  by  the  number  of  reported  accounts  (circa  9  million).  We  obtain  a 
recurrent cost per account of (53/9) = circa € 6. 

  We  estimate  the  administrative  cost  per  seller  under  the  new  reporting 
requirement at half of the average DAC2 substantive cost per account, as done for 
the substantive compliance costs. This is a simplistic assumption but underpinned 
by several  factors:   (a) the proposed intervention does not impose due diligence 
requirements on platform operators as strictly as DAC2 on financial institutions; 
(b) the costs for DAC2 include actually also costs for implementing FATCA and 
CRS.  Furthermore,  as  the  new  reporting  requirements  are  essentially  about  data 
collection and gathering and the core business of platforms is “data”, we assume 
that  faced  with  a  comparable  data  reporting  requirement  an  average  platform 
would incur a lower cost than an average financial institution. Second, we assume 
that  the  price  of  IT  services  is  lower  in  2020  and  will  be  likely  lower  once  the 
new  reporting  requirements  will  enter  into  application  than  when  financial 
institutions had to bear the one-off costs of adapting to DAC2.  

88 

 
 
Why are the costs for administrations lower than for platforms?  

The  substantive  cost  per  seller  is  assumed  to  be  10  times  lower  than  for  platform 
operators. This assumption is based on evidence gathered as part of the DAC evaluation, 
which shows that DAC2 costs for businesses were about 10 times higher than those for 
tax administrations.  

  DAC2  costs  up  to  2017  for  tax  administrations:  €53.3  million,  of  which  about 

90% for development and 10% recurrent costs.  

  DAC2 accounts = 9 million  

  Tax administrations’ cost/account = (53.3 / 9) = circa €6 of which 90% (€5.4) one 
off  substantive  costs  and  10  per  cent  (€0.6)  recurrent,  administrative  costs,  per 
account.  

How is the cost of enforcement estimated?  

 

It  is  realistic  to  account  for  enforcement  costs  if  we  expect  the  intervention  to 
actually lead to a reduction in the tax gap / indirect benefits in terms of additional 
tax revenues. We use an enforcement ratio, based on the number of audits for PIT 
taxpayers. According to the OECD115 the EU average is 4.3 audit per 100 active 
personal income tax (PIT) taxpayers data, rounded at 5 %.  

  We apply the 5% (rounded figure) ratio to the sellers; whereby we get a number 

of controlled sellers. 

  For each control (controlled seller) we need to give a price. We put the cost per 
audit at €6. This an estimation of the hourly cost of an average tax auditor in the 
EU, based on extrapolation from OECD data.116 It is assumed one audit / control 
would take 1 hour of an average tax auditor, as thanks to automatic exchange of 
information  it  should  be  relatively  quick  to  cross-check  data  concerning 
taxpayers.  

  We  expect  therefore  enforcement  costs  to  amount  to  circa  €3  million  under  the 
limited  scope,  €6  million  under  the  intermediate  scope  and  €10.5  million  under 
the full scope. 

115 Figure 3.10. PIT audit coverage, 2017 Tax Administration 2019 - OECD 2019. 
116  Data  from  OECD  (2019),  Tax  Administration  2019: Comparative  Information  on  OECD  and  other 
Advanced  and  Emerging  Economies,  OECD  Publishing,  Paris,  https://doi.org/10.1787/74d162b6-
en.https://doi.org/10.1787/74d162b6-en..https://doi.org/10.1787/74d162b6-en. Main source of information: 
figures from Table A.31 Operating expenditures of tax administrations, EU average for year 2017, divided 
by number of auditors from Table A.28. Staff of the tax administration - Total and by function, per hour. It 
is assumed a tax auditor works 7 hours/day per 20 days/month.  

89 

 
 
 
 
                                                 
ANNEX  5:  THE  OECD  MODEL  RULES  FOR  SELLERS  IN  THE  SHARING  AND  GIG 
ECONOMY 

This  annex  builds  on  information  that  is  publicly  available,  thanks  to  the  Public 
Consultation document on the “Model Reporting Rules For Sellers In The Sharing And 
Gig  Economy”,  OECD  2020,  retrieved  from:  http://www.oecd.org/tax/exchange-of-tax-
information/public-consultation-document-model-rules-reporting-platform-operators-
with-respect-sellers-sharing-gig-economy.pdf   

Building blocks of the model rules  

11.  The  overall  architecture  of  the  model  rules  is  driven  by  three  dimensions:  (i)  a 
targeted  scope  of  transactions  to  be  reported,  as  set  out  above;  (ii)  a  broad  scope  of 
platform  operators  and  relevant  sellers,  to  ensure  that  as  many  relevant  transactions  as 
possible  are  being  reported;  and  (iii)  due  diligence  and  reporting  rules  that  ensure  that 
relevant  information  gets  reported  without  imposing  overly  burdensome  procedures  on 
platform operators.  

12. Against that background, the model rules are structured as follows:  

• Section I sets out the key definitions and is grouped around four themes:  

-  The first part defines the scope of platform operators that are subject to the rules. 
In  defining  this  scope,  a  broad  and  generic  definition  of  the  term  platform  has 
been chosen to cover all software products that are accessible by users and allow 
sellers to be connected to other users for the provision of relevant services. The 
term  platform  also  includes  associated  services,  such  as  payment  processing 
services.  Platform  operators  are  defined  as  entities  that  contract  with  sellers  to 
make  available  all  or  part  of  a  platform  to  such  sellers.  They  are  in  principle 
subject  to  the  rules  when  they  are  resident,  incorporated  or  managed  in  the 
jurisdiction adopting the rules, unless the platform operator is in its start-up phase 
and realises a limited amount of revenue;   

-  The second part defines the services covered by the model rules and covers both 
the  rental  of  immovable  property,  as  well  as  the  provision  of  personal  services, 
including transportation and delivery services;   

-  The  third  part  defines  the  due  diligence  procedures  and  the  reporting 
requirements. The scope of sellers covers both entities and individuals, although 
exclusions  are  foreseen  for  hotel  businesses,  publicly-traded  entities  and 
governmental entities; and  

-  The  fourth  part  contains  a  set  of  other  definitions  that  are  relevant  for  applying 

the model rules.  

• Section II contains the due diligence procedures to be followed by platform operators 
to identify the sellers and determine the relevant tax jurisdictions for reporting purposes 
by means of the following steps:  

-  The first part contains procedures for identifying those sellers that are not subject 
to the collection and verification requirements, either because they fall within one 
of the exclusions or because the responsibilities for identifying and reporting such 
sellers have been delegated to another platform operator;  

-  The second and third parts set out the information items that platform operators 
are required to collect and, in certain instances, verify with respect to sellers. This 

 
 
includes  in  particular  the  name,  address,  TIN  (including  the  jurisdiction  of 
issuance) and, in the case of an individual seller, the seller’s date of birth;  

-  The  fourth  and  fifth  parts  set  out  the  rules  for  determining  the  tax  residence  of 
sellers for purposes of the rules, on the basis of the information items collected; 
and  

-  The sixth part stipulates that the due diligence procedures need to be completed 
by  the  end  of  each  year  and  that  documentation  be  updated  or  confirmed  once 
each 36 months.  It also  provides transitional relief for sellers that  are registered 
on the platform prior to the platform operator becoming subject to the rules.  

• Section III sets out the information to be reported about the platform, its operators, its 
sellers  and  their  transactions  by  31  January  of  each  year,  as  well  as  the  format  for 
reporting; and 

• Section IV contains the administration and enforcement hallmarks that jurisdictions are 
expected to consider when implementing the model rules.  

13.  As  indicated  above,  the  model  rules  and  commentary  are  designed  to  be 
complemented  by  an  international  legal  framework  to  support  the  annual  automatic 
exchange of information by the residence jurisdiction of the platform operator with  the 
jurisdictions  of  residence  of  the  sellers  (and,  with  respect  to  transactions  involving  the 
rental  of  immovable  property,  the  jurisdictions  in  which  such  immovable  property  is 
located), as determined on the basis of the due diligence procedures. In addition, further 
work  will  be  undertaken  to  develop  a  standardised  IT-format  for  the  information 
exchanges, as well as potential IT solutions to support the identity verification of sellers 
by platform operators.” 

From the Public Consultation document on the “Model Reporting Rules For Sellers In The Sharing And 
Gig Economy”, OECD 2020, retrieved from: http://www.oecd.org/tax/exchange-of-tax-information/public-
consultation-document-model-rules-reporting-platform-operators-with-respect-sellers-sharing-gig-
economy.pdf  

Key features of the OECD draft model rules: 

91 

 
 
• resident, incorporated or 

managed in the jurisdiction 
•except startups (less than € 

100.000 in revenues for the first 
3 years since incorporation) 

Platforms 
operators 

Sellers 

•Provides a relevant service 
•exceptions: 

•more than 2,000 Relevant 

Services for the rental of the 
same immovable property 

•government entities 
•regularly traded entities 

•rental of immovable property 
•personal services (including 
transportation and delivery) 

Relevant 
services 

Data to be collected by the Platform operators: 

Platform data 

•name,  
•registered office address 
•TIN 
•business name 

seller information 

•individual 

•the first and last name;  
• the Primary Address;  
• any TIN issued to the Seller, including each jurisdiction of issuance; 
• the date of birth.  

•entity 

•the legal name;  
•the Primary Address;  
•any TIN issued to the Seller, including each jurisdiction of issuance; and 
•in absence of the TIN, the business registration number.  

•jurisdiction of tax residence 
•if different from the seller, the name of the holder of the financial account to which the amount was paid. 

transaction information 

•total amount paid (aggregated) 
• fees, commissions or taxes withheld or charged (aggregated)  
•number of transactions 
•for rental income: 

• address and land registration number of each Property Listing 
• number of days each property was rented and the type of property (availability) 

92 

 
 
 
 
 
 
93 

 
 
 
 
ANNEX 6: OVERVIEW OF PLATFORM REPORTING OBLIGATIONS AT NATIONAL LEVEL 

Based  on  the  information  gathered  through  the  targeted  consultation  to  the  Member 
States,  there  are  overall  12  Member  States  with  legislation  and/or  administrative 
guidance in place for platforms operators to report information to tax administrations on 
sellers active on their platforms. These Member States are the following:  

Austria 

Belgium 

Czechia 

Denmark 

Finland 

France 

Greece 

Ireland 

Italy 

Lithuania 

Poland 

Spain 

Likewise,  in  addition  to  the  countries  where  these  measures  are  already  in  place,  four 
Member  States  have  expressed  their  plans  to  introduce  such  legislative  and/or 
administrative  guidance  concerning  reporting  requirements  (Slovak  Republic,  Malta, 
Cyprus and Estonia). 

Among  Member  States  where  reporting  operations  are  in  place,  there  is  a  diversity  of 
activities, platforms and sellers under scope. Each reporting system across the European 
Union has its own characteristics and divergences in terms of how binding they are. For 
instance,  countries  such  as  CZ  or  BE  lay  out  non-regulatory  agreements  with  selected 
platforms  that  provide  tax  administration  with  sellers’  income  information.  Different 
policies  are  also  applied  across  Member  States  regarding  the  sellers  in  scope.  Some 
countries include exemptions either for the large or for the small players, whereas other 
countries choose for a broader scope including all sellers without exemptions. 

However, it is worth noting that there also are commonalities as well. The main activities 
covered by the scope of current reporting systems are accommodation and transportation 
services. Several countries are introducing these measures in subsequent phases in order 
to extend the scope to a larger range of activities. Regarding the information required to 
identify the sellers on these platforms, the tax identification number is widespread among 
most  of  the  reporting  systems  (although  in  some  cases,  it  is  not  compulsory  as  it  is 
required only if available). 

In  an  attempt  to  streamline  the  information  gathered,  the  table  below  summarizes  their 
main features: 

94 

 
 
 
 
 
 
MAIN FEATURES OF THE NATIONAL REPORTING OBLIGATION SYSTEM 

MEMBER 
STATE 
Austria117 

Belgium 

The reporting obligations are entering into force in two phases: As of January 2020 for provision of 
services and as of January 2021 for sales of goods. Once the two phases are implemented, all 
platforms (without exemptions) are obliged to report information about the sellers involved. The 
information to be shared: name, address and electronic address or website of the supplier; the VAT 
identification number/national tax number; and account number of the supplier (if available). 
There is a list of certified platforms which agreed to report information to the national tax 
administration118 without a regulatory basis. 
Agreements are put in place with selected platforms. 

Czech 
Republic 
Denmark119  As of 2020, tourist rental services are in the scope of reporting obligations. As of January 2021, the 

scope will be extended to rental of housing in general, cars and boats.  Once both stages are 
entered into force, accommodation and transportation services platforms (voluntary for foreign 
platforms and under previous agreement) must report information about the individual sellers.  
The legislation is not yet into force at national level. First phase will cover accommodation and 
transportation industries. Later phases will cover broader range of services. Platforms are required 
by law to report income information (TIN as main mean of identification) from all sellers. 
With the widest scope, all platforms regardless of their place of establishment have reporting 
requirements that apply to sellers when they are French resident or making sales of 
goods/provision of services in France. The system relies on a broad set of information for seller’s 
identification (including TIN). 
Tax administration can request information or data from any online platforms (even those based 
outside of Greece) if these data are needed to make a tax assessment. The failure to do so results in 
suspension of the platforms’ access to Greek IP’s plus a monetary fine. 
Irish tax legislation requires automatic reporting under a self-assessment basis or on request from 
the tax revenue service. Although the provisions are not specifically designed for affecting sharing 
platforms, they may capture taxpayers operating through sharing platforms.  Such provisions cover 
both sales of goods and provision of all services. 
Regulation has been put in place to cover the activity of accommodation services (short-term 
rentals). 

Finland 

France120 

Greece121 

Ireland122 

Italy123 

Lithuania124  Lithuania passed amendment of Road Transport Code and the tax authority provided rules for 

transporting service platform operators. Under these legislations, transporting service platforms 
must provide information to tax authority about income and other data relating to the calculation 

117  https://www.bmf.gv.at/en/topics/taxation/vat-assessment-refund/Recording-Obligations-for-Electronic-
Interfaces-(Platforms)-.html 
118  https://finances.belgium.be/sites/default/files/downloads/127-economie-collaborative-liste-plateformes-
agreees-20190509.pdf 
119 https://www.retsinformation.dk/Forms/R0710.aspx?id=203869 
120 
https://www.legifrance.gouv.fr/affichLoiPreparation.do?idDocument=JORFDOLE000036747507&type=g
eneral 
121 https://www.taxheaven.gr/law/4646/2019 
122 
returns/rental-income-sector.aspx 
123 
breve/np-contratti-di-locazioni-brevi 
124 
https://www.e-tar.lt/portal/lt/legalAct/7c1a56802b8f11eabe008ea93139d588 

https://www.agenziaentrate.gov.it/portale/web/guest/schede/comunicazioni/contratti-di-locazione-

https://www.revenue.ie/en/companies-and-charities/corporation-tax-for-companies/third-party-

https://www.e-tar.lt/portal/legalAct.html?documentId=180da370ee4211e99681cd81dcdca52c; 

95 

 
 
                                                 
Poland 

Spain125 

and declaration of taxes. 
As of January 2020, the Polish Transportation Law has come into force. It aims at regulating the 
market of ride-hailing services. Described law imposes certain obligations on the collaborative 
platforms, in particular, to share information with the authorities. The records needed to be 
provided by the intermediaries to the Polish National Revenue Administration include, among 
others, name of the entrepreneur, address/place of business and tax identification number of the 
entrepreneur. 
As of 2019, Spain has laid down the obligation for digital platforms that intermediate in the rental of 
tourist housing to communicate to the tax authority relevant information about the activity they 
intermediate. All platforms (foreign and resident) are obliged to report as long as the real asset is 
located in Spain. Exemptions in sellers have been set out such as for long-term rental of dwellings 
for individuals and tourist accommodations regulated by its specific provisions (hotels, hostels, etc.). 

125 https://www.boe.es/boe/dias/2018/05/30/pdfs/BOE-A-2018-7152.pdf 

96 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
ANNEX 7: BIBLIOGRAPHY  

Almunia, M., & Lopez Rodriguez, D. (2014). Heterogeneous responses to effective tax 
enforcement: Evidence from Spanish firms. 

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ANNEX 8: 2019 EVALUATION  OF  THE  DIRECTIVE  ON  ADMINISTRATIVE COOPERATION 
(DAC) 

The Commission staff working document on the evaluation of the Directive on 
administrative cooperation in direct taxation was published in September 2019 on the 
website of the European Commission and is available online at: 
https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document
_evaluation_on_dac.pdf  

The executive summary of the evaluation is available in English, French and German:  

English version:  

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document
_evaluation_on_dac_summary_en.pdf  

French version:  

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document
_evaluation_on_dac_summary_fr.pdf 

German version:  

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_staff_working_document
_evaluation_on_dac_summary_de.pdf 

The evaluation was supported by an external study, performed by Commission’s 
contractor. The study is online at: 

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_evaluation_study_on_dac
_kp0219284enn.pdf  

Study’s executive summary:  

https://ec.europa.eu/taxation_customs/sites/taxation/files/2019_evaluation_study_on_dac
_summary_en_kp0219285enn.pdf  

100