Implementation of EU directive on reporting obligations of digital platforms (DAC7) in Slovakia

The Slovakian Government approved the implementation of the EU Directive on Administrative Cooperation in Taxes (DAC). The amended legislation introduces new obligations for operators of digital platforms and provisions concerning joint tax audits take effect on 1 January 2023 except for provisions to joint tax audits which will be effective from 1 January 2024.

The EU Directive introduces reporting obligations for operators of digital platforms. The obligations are laid out as follows: 

• Digital platform operators must within 15 days of becoming an operator of a digital platform register with the Slovak tax authorities.
• The notification obligations for operators must be fulfilled by 31 January of the year following the year in which the seller was identified as a seller subject to notification. If a different operator already notified the Slovak tax authorities on the same seller, it will be sufficient to only electronically submit an announcement that a different operator already met the notification obligation. The respective templates will be published on the website of the financial authorities.
• The operator must by 31 December of the respective period subject to notification perform due diligence of the information on sellers and their transactions and report such information to the tax authority. For sellers registered on the platform before 1 January 2023, the due diligence procedures must be performed by 31 December 2024. The digital platform operators must archive the underlying information for 10 years from the end of the year in which the notification on sellers had to be filled.
• Certain sellers on digital platforms are excluded from the notification obligations, such as:
• Governmental entities
• Entities the shares of which are regularly traded on a stock exchange
• Hotels and other persons letting out real estate (if the number of transactions exceeded 2,000 in the period subject to notification)
• Sellers with less than 30 transactions, not exceeding €2,000

The legislation also introduces new obligations for operators of digital platforms concerning joint tax audits performed by the tax authorities of two or more EU Member States. Joint tax audits will be tax audits performed by the tax authorities of two or more EU member states. The Amendment defines the rights and obligations of the tax authorities from the other country. It also stipulates that the joint tax audit starts on the day stated in the announcement on the joint tax audit and ends on the day of the elaboration of the final report.

Specific obligations on protection of personal data and procedure in the case of breach of this protection, as well as due diligence procedures for the digital platform operators, are laid out in the Directive transposed into the Slovakian legal system. 

Sanctions for non-compliance with the notification or registration obligations amount from EUR 3 000 to EUR 10 000 and can be imposed also repeatedly.