The legislative initiative implements the so-called DAC7 Directive of the EU into national law, which is required under EU law by December 31, 2022. The aim is to give tax authorities better cross-border access to information required for the taxation of income generated by using digital platforms. In Germany, the German Federal Tax Office (BZSt) is responsible for collecting and forwarding the relevant data to the tax authorities of the other EU member states.
The following explanations provide an initial overview of who is affected by the planned measures and what obligations qualified platform operators must fulfill in the future.
Note: As the legislative process has not yet been completed, changes may still occur.
Platforms as defined by the PStTG-Draft
The scope of application of the PStTG is intended to cover digital platforms that enable providers and users to make contact via the internet using software and to conclude legal transactions on the platform relating to so-called relevant activities.
According to the explanatory memorandum published by the German government, platform operators and providers must be different legal entities. The online store of a company that exclusively sells self-produced goods does not fall in the scope of application. There is also no obligation to register if an operator of an online store offers services that he has obtained from third parties, but are not registered as suppliers there.
Example: An electrical goods manufacturer sells electronic devices via an online store. He obtains these devices exclusively from a wholesaler who does not appear in the online store as a seller of the goods. In this case, the online store is not a platform within the meaning of the PStTG-Draft.
This is to be distinguished from cases in which contact between providers and users is only indirect, by the platform operator acquiring services from providers in order to provide them to users in its own name.
Example: Restaurant operator R is registered as a provider on B's platform and offers his meals there. When a user N orders a meal, B purchases it from R and resells it to N in his own name. Since R is registered as a provider, B's system is a platform. The PStTG-Draft specifies exclusion criteria which, if met, would mean that the system is not a platform within the meaning of the law.
The mere mediation of opportunities to conclude a transaction, pure payment applications and the exclusive advertising of activities, on the other hand, are not subject to the reporting obligation. According to the explanatory memorandum, brokerage portals, online payment services, price comparison websites, etc. are therefore not platforms within the meaning of the law.
Platform operators subject to reporting requirements
A platform operator as defined by the PStTG-Draft is any legal entity that undertakes to make available a platform to a provider for carrying out its activities. In principle, this applies to all legal entities that operate as platform providers, including foreign legal entities. Only individuals are excluded.
The obligations of the PStTG-Draft only affect qualified platform operators. These are operators that have a specific connection to Germany or the EU. This connection can exist either on the basis of a registered office, a place of effective management or a permanent establishment in Germany or any other registration under domestic law. Operators are also considered to be qualified platform operators if they are not domiciled in any EU state but carry out their activities in the EU. However, an exception may apply to these platform operators if they are domiciled in a third country that has committed to an automatic exchange of information with EU member states.
Qualified platform operators as well as platform operators with nexus to another EU member state are generally subject to reporting obligations in this EU member state.
Note: Platform operators who can prove that they make their platform available exclusively to providers who are not required to report (so-called exempt platform operators) are also not required to report.
Only relevant activities are to be reportable. According to the draft law, these include
- the temporary transfer of use and other rights of any kind to immovable property,
- the provision of personal services,
- the sale of goods, and
- the temporary transfer of use and other rights of any kind to means of transport.
The legislator envisages a wide scope of application. For example, the nature and use of immovable property and the duration of the transfer are irrelevant. In principle, all activities that are limited in time or related to a specific task are covered as personal services, regardless of whether they are provided virtually or at a physical location.
Another prerequisite for the reporting obligation is that the activity is performed in return for a remuneration. This is to be understood as any form of remuneration received by a provider for the relevant activity. The remuneration includes any form and type, so that, for example, contributions in kind, cryptocurrencies, or the provision of (personal) data can also be considered as remuneration.
Obligations for platform operators
Platform operators subject to the reporting obligation must submit tax-relevant information to the BZSt for the first time for the calendar year 2023. Essentially, they are required to provide information
- about themselves
- the platform they operate, and
- the providers on their platform.
In addition to general information, the number of relevant activities for which remuneration was paid or credited and the total remuneration paid or credited must be reported for each quarter of the calendar year.
Note: The report must be submitted to the BZSt in electronic form according to the officially prescribed data set no later than January 31 of the year following the calendar year in which the provider was identified as a reportable provider. The deadline for the first-time reporting obligation is therefore January 31, 2024.
Compliance and other obligations
In addition to reporting relevant activities, reporting platform operators particularly must fulfill the following obligations according to the PStTG-Draft.
- Obligation to collect reportable information and check its plausibility.
- Identification of exempt providers, i.e. providers for which there is no reporting obligation.
The deadline for fulfilling compliance obligations is to expire on January 31 of the reporting period or, for existing providers, on December 31 of the second reporting period.
- Obligation to inform providers about the notification.
- Enforcement of cooperation obligations to providers.
- Recordkeeping obligations.
Note: Non-EU-based platform operators are also subject to a one-time obligation to register with a competent authority in a member state. According to the explanatory memorandum published by the German government, registrations must be carried out immediately upon entry into force of the PStTG or upon subsequent qualification as a reporting platform operator after the relevant requirements have been met.
Fines for violations of obligations
If reporting platform operators fail to comply with their obligations, fines of between EUR 5,000 and EUR 50,000 may be imposed, depending on the nature of the violation. As a last resort, the BZSt will also be able to prohibit the operation of the platform and order its blocking.