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Digital Administrative Cooperation in Taxation (DAC7)
Digital Administrative Cooperation in Taxation (DAC7)
In this guide you’ll learn how the Digital Administrative Cooperation in Taxation (DAC7) regulation works within the European Union (EU), and the implications it has on your business.
What is DAC7?
DAC7 focuses on improving tax transparency and combating tax evasion by requiring digital platforms to share information on the sellers using their platforms. This information will be shared with tax agencies across the cooperating nations/countries to make sure online sellers are paying the appropriate taxes on their income.
How DAC7 may be referred to and shared differently in other countries
Shared with Irish tax and customs under DAC7/MRDP
Shared with the Australia Taxation Office under Sharing Economy Reporting Regime
Shared with HM Revenue and Customs (HMRC) under The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023
Shared with the Canada Revenue Agency (CRA) New Reporting Rules for Digital Platform Operators
This rule currently applies to the EU, Canada, Australia, and the UK. Information is mandated by the DAC7 law, which requires digital platforms, like Fresha, to comply with these regulations. Fresha does not decide what gets shared.
How DAC7 affects you and Fresha
Platforms like Fresha must share:
- How much money you have earned from selling goods or offering services through Fresha during the previous calendar year.
- Your personal information, like your name, address, and tax ID.
- Any fees and/or commissions you’ve paid to Fresha.
Your data needs to be shared if you:
- Make 30 or more bookings in a year, or
- Receive more than €2,000 (or the equivalent in your currency).
If you meet the above DAC7 criteria, you’ll receive an email explaining what information will be shared.
What should you do?
To stay on top of these changes:
- Update your information:
Ensure your billing details and account holder information are correct and up to date. - Know your tax obligations:
If you’re unsure, speak to a tax advisor to understand how to report your income.
Download your reports regularly to keep track of your earnings.
FAQs
No, Fresha is legally required to share the above information if you meet the DAC7 criteria. This is done in compliance with data protection laws.
If your DAC7 form contains incorrect information, you can update it by editing your Fresha billing details and account holder information. To do this, go to your business Wallet, select Bank accounts, and click Edit next to the relevant entity. Any updates should be completed before January of every year for the form to reflect the correct details and to guarantee it is mailed to the correct address.
Yes, you can see the details that will be shared with your local authority under DAC7. To do so, export the Finance Summary report and filter by the relevant Fresha Pay payment methods. This will allow you to view the details that are reported and you can then share this report with your local authority until you receive the official document.
Self-employed team members' earnings will be included in your DAC7 calculations for 2024. If you are based in the US you can add your self-employed team members as merchants to have their information shared separately for 2025. We will be expanding this feature to more countries soon.
Fresha shares information for the previous calendar year (January to December) under the DAC7 regulation. This may differ from your usual tax period. Contact your local tax agency for more information.
The DAC7 regulation is a legal obligation for platforms like Fresha. For more specific advice about how this may impact your tax situation, we encourage you to speak with a tax advisor.
To check that your data is shared correctly for DAC7, access your Fresha reports and review them alongside your own records.
Fresha will only share data for countries where DAC7 applies. This includes the EU, Canada, Australia, and the United Kingdom. To check that your country is registered correctly, access your business details.
We can’t comment on how other platforms determine their sharing obligations for DAC7. However, Fresha is committed to complying with the legal requirements of all participating countries.