What is the DAC7 directive and who does It apply to?
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In Poland, the topic has gained particular significance following the implementation of a local law introducing the EU regulations. It is this law concerning the DAC7 Directive that sets out specific obligations for platform operators as well as individuals using their services. But what exactly is it all about?
In this article, we’ll answer the most important questions:
- What is the DAC7 Directive?
- Who is affected by the DAC7 Directive and how does it impact online activities?
- When do the regulations take effect, and what are the income thresholds beyond which reporting becomes mandatory?
If you run an online business, sell on marketplace platforms, or even just use them for income-generating purposes—this content is specifically for you.
What is the DAC7 directive?
The DAC7 Directive (short for Directive on Administrative Cooperation) is an EU regulation adopted by the Council of the European Union in March 2021. It represents another step toward expanding tax cooperation among EU member states.
Its main purpose is to enhance financial transparency within the digital economy, which has been growing rapidly in recent years—often outpacing national tax regulations.
The Goal: more transparency, less tax evasion
In practice, DAC7 aims to combat issues such as undeclared income from online activities, unregistered business operations, and the avoidance of taxes on goods and services sold via the internet.
The new rules impose reporting obligations on digital platform operators, requiring them to collect and share user income data with the appropriate tax authorities.
As a result, EU member states gain tools to better monitor financial flows and enforce tax compliance—even when sales or services are conducted in a decentralized manner using apps and digital platforms.
DAC7 law in Poland – What does it look like?
Like other EU countries, Poland was required to implement the directive by the end of 2022. However, the law incorporating DAC7 only came into effect on July 1, 2024, following a delay. This means that, as of that date, specific rules apply regarding the reporting of income generated by users on online platforms.
Territorial and subject scope
Importantly, DAC7 does not apply only to digital platforms based in the EU. It also affects non-EU companies providing services to users within the EU. This includes not only e-commerce giants but also smaller operators of apps, classified ad sites, and short-term rental platforms.
In short: if a platform enables profit-generating transactions involving EU users—it falls under the DAC7 Directive.
Who does the DAC7 directive apply to?
Many entrepreneurs and platform users ask the basic question: Who is affected by the DAC7 Directive? The answer is broader than it may seem at first glance. The regulation is designed to cover the widest possible range of income-generating activities conducted via the internet—whether by individuals or businesses.
Digital platform operators
First and foremost, the directive applies to digital platform operators—companies that facilitate the exchange of goods and services between users. These may include:
- Sales platforms (e.g., marketplaces)
- Real estate rental services
- Apps offering transportation or freelance services
- Classified ad sites enabling service provision
It doesn’t matter whether a platform is based in Poland, elsewhere in the EU, or even outside the EU. If it provides services to EU users, it is subject to DAC7 obligations. Importantly, the responsibility for data collection and reporting to tax authorities lies with the platform operators.
Users earning income through platforms
The second key group affected by DAC7 are users who earn income through digital platforms. These rules apply to both individuals and businesses that:
- Sell goods on platforms like Allegro, OLX, Amazon, or Vinted
- Rent out properties short-term via services like Airbnb or Booking.com
- Offer various services—online tutoring, graphic design, freelance work
- Provide transportation or vehicle rental services
It doesn’t matter whether the activity is regular or occasional—once specific income thresholds are exceeded (more on that later), the reporting obligation is triggered. This gives tax authorities a stronger tool to identify individuals and entities that are generating income and should report it accordingly.
What obligations does the DAC7 directive impose?
With the entry into force of the regulations stemming from the DAC7 Directive, digital platform operators are now subject to new, precisely defined reporting obligations. What does this mean in practice? It means collecting data, processing it, and reporting it to tax authorities—both at the national and EU levels.
Obligations for platform operators
The main burden of complying with DAC7 falls on digital platform operators, who are required to implement a range of reporting duties.
They must:
- Identify the sellers and service providers using their platform
- Collect identification data such as name, residential address, taxpayer identification number (TIN), and bank account number
- Track transaction details, including total payout amounts, the number of transactions, and any applicable VAT data
The gathered information must be submitted once a year to the relevant national tax authority—in Poland, this is the National Revenue Administration (Krajowa Administracja Skarbowa). Failure to meet these obligations can lead to serious penalties, which are discussed later in the article.
What transactions are subject to reporting?
Under the directive, DAC7 covers four main categories of activity:
- Online sale of goods (e.g. second-hand items, handmade crafts, physical products)
- Short-term property rentals (e.g. apartments, rooms, vacation homes)
- Personal services (e.g. repairs, lessons, tutoring, consulting)
- Transportation services (e.g. passenger rides, vehicle rentals with a driver)
Any of these activities—when conducted by a platform user—must be tracked and reported by the platform operator.
Objectives and implementation of the DAC7 regulations
Why was the DAC7 directive introduced?
Over recent years, EU countries have identified a significant gap in the tax system—caused by the lack of oversight over income generated online.
Transactions carried out through digital platforms often went undetected by tax authorities, leading to widespread tax evasion and the expansion of the so-called “grey economy.”
The DAC7 Directive was created in response to these issues. Its primary goals include:
- Increasing tax transparency within the EU
- Improving the collection of taxes on income earned online
- Enabling information exchange between member states—especially in the case of cross-border transactions
- Regulating the digital marketplace, which has often operated independently of traditional tax laws
Implementation across the EU
The DAC7 Directive was adopted by the Council of the European Union in March 2021, with all member states required to implement the regulations by the end of 2022.
There wasn’t much time—countries had less than two years to create national legislation, update IT systems, and develop mechanisms to enforce the new obligations.
In many countries, the rules came into effect as early as January 1, 2023, with the first reports due in 2024 for the previous year.
When did DAC7 come into effect in Poland?
In Poland, the legislation implementing the DAC7 directive was adopted slightly later, with the new law taking effect on July 1, 2024. From that date, digital platform operators operating in the Polish market are legally required to:
- Collect data on users generating income
- Fulfill reporting obligations to the National Revenue Administration (Krajowa Administracja Skarbowa)
- Comply with the thresholds and rules outlined in the regulation
Although the rules came into force in the second half of the year, Poland—like all other EU member states—is obligated to report on the full accounting period for 2024.
Impacts on the Digital Market
The introduction of the DAC7 Directive marks one of the most significant legal changes to affect digital commerce and services in recent years. The new reporting obligations mean not only increased formalities for platform operators, but also real consequences for users who have so far engaged in sales or rentals informally.
For Digital Platforms: New Duties and Higher Costs
For digital platform operators, implementing the DAC7-related legislation requires a thorough overhaul of internal IT systems, compliance procedures, and the way they manage user relationships.
In practice, they must:
- Verify the identity of sellers and service providers
- Maintain detailed records of transactions
- Update privacy policies and communication protocols to meet reporting requirements
All these measures entail additional operational and technological costs. They also raise the market entry barrier for smaller entities, which may struggle to implement the necessary systems at a compliant level.
For users: The end of “invisible earnings”
The most significant shift affects users who have been selling goods, renting properties, or offering services without formally registering a business. With the new reporting mechanism, tax authorities now have access to detailed data on:
- The number of transactions
- Their total value
- Payouts made to the user’s account
In practice, this means individuals who exceed certain thresholds—e.g., sell more than 30 items per year or earn over €2,000—will be identified and may be summoned to explain their income or pay taxes.
That’s why DAC7 thresholds are something every platform user should be aware of, even if their activity seems “occasional.”
A positive side effect: market regulation
Although the new DAC7 rules present challenges for many users, they also bring important benefits—one of which is better regulation of the market.
The new framework reduces the advantage of unfair competition that previously operated outside the tax system, encourages users to legalize their income-generating activities, and helps build greater trust among customers toward platforms and sellers.
From the state’s perspective, it represents a significant opportunity to increase tax revenues and more effectively combat fraud in the digital economy.
Penalties for non-compliance with DAC7
The introduction of the DAC7 Directive is not only about new information obligations—it also brings real penalties for failure to comply.
The regulations are designed to enforce effective cooperation between platform operators and tax authorities, which is why significant consequences are foreseen—for both companies and, indirectly, users.
Penalties for digital platform operators
Platform operators bear primary responsibility for implementing mechanisms that comply with DAC7. If they fail to fulfill these obligations, they may face:
- Financial penalties – up to PLN 1,000,000 (~€230,000) for failure to report or submitting incorrect data
- Business suspension – in extreme cases, operators may be prohibited from offering services within the EU market
- Legal liability for management – e.g. if directors intentionally evade obligations
Consequences for platform users
Although users are not directly responsible for reporting their own data, DAC7 affects them indirectly—through the information submitted by platform operators to tax authorities.
If reports show that a user has exceeded certain thresholds—such as conducting more than 30 transactions per year or earning over €2,000—but hasn’t registered a business or paid the appropriate taxes, the tax office may summon them for clarification.
In such cases, users may be required to:
- File a corrected tax return (PIT)
- Pay outstanding taxes with interest
- Face audits or enforcement proceedings
- Pay fines for concealing income
- Lose access to favorable tax regimes, such as lump-sum taxation or exemptions
Key Takeaways: what you should remember about DAC7?
The DAC7 Directive is a groundbreaking step by the European Union to bring order to the digital economy. It introduces mandatory income reporting for users of online platforms, aiming to reduce tax evasion and enhance tax transparency.
In summary:
- The DAC7 law has been in force in Poland since July 1, 2024
- It applies to both digital platforms and users earning income online—clarifying exactly who DAC7 affects
- Platform operators must report user data if thresholds are exceeded (more than 30 transactions or €2,000 annually)
- Non-compliance may result in high financial penalties and tax audits
What should you do as a platform operator?
✔ Analyze whether your platform falls under DAC7 obligations
✔ Update terms of service, registration forms, and IT systems
✔ Ensure data processing security and accuracy
✔ Consider working with a tax or legal advisor
What should you do as a platform user?
✔ Check whether your income could be subject to reporting
✔ Monitor if you’re nearing DAC7 thresholds
✔ Make sure your activities don’t require formal business registration
✔ Be prepared for potential contact from the tax office
Want to learn more?
Refer to official sources and expert interpretations:
- Lex.pl – practical legal analyses
