The EU Council Directive 2021/514, commonly referred to as DAC7, has caused ripples in the European short-term rental industry. Starting January 1, 2023 vacation rental businesses are required by platform operators – for example, OTAs like Airbnb or channel managers like Your.Renals – to share tax information in order to comply with DAC7. Otherwise, their listings might be unpublished.
What is the DAC7 EU directive?
DAC7 (EU’s Directive on Administrative Cooperation, amendment 7) is a law designed to facilitate the transparency and exchange of tax information among EU member states
It serves the tax reporting purposes of individuals and legal entities dealing with intermediary platforms for services like accommodation, vehicle rentals, and other on-demand services.
Who needs to disclose the DAC7 information? – Sellers who are resident in EU member states and those renting out property in an EU member state.
What is a Platform in DAC7?
We mentioned that DAC7 applies to individuals and entities selling through platforms. A platform is software that facilitates economic transactions between sellers and buyers. It serves as a connection point where these transactions take place.
- If a host advertises properties on one website, but actual transactions occur outside of the website (platform) – in this case, the website would NOT be considered a platform.
- Users buy and sell rentals on the same site where the payments are processed – in this case, the site falls under the category of a platform as defined by DAC7.
DAC7 for Airbnb short-term rentals
With implication to vacation rentals DAC7 means that each reportable platform operator like Airbnb, Booking.com or Your.Rentals would request further details of hosts whose listings have received bookings within the reporting year.
The responsibility of submitting the revenue information to the EU authority falls on platform operators. Subsequently, the EU country where these hosts are registered will be notified.
Long-term renting and DAC7
DAC7 applies not only to short-term rentals but also to any form of leasing, including long-term rentals.
If for example, you get a long-term booking (28 nights or more) on a platform like Airbnb, it would also be subject to DAC7 reporting requirements.
DAC7 reportable seller
The EU member tax agency will be requesting the income information from the digital platform operators (OTA channels like Airbnb). If you use a channel manager like Your.Rentals, we are obliged to obtain the reportable seller information, since we connect property managers and property owners to OTA channels.
The term “Reportable seller” refers to the host (individual or business) that receives the income generated from the rental listing accommodation.
Whether a host is a reportable seller hinges on their contract. If a contract gives rental income from bookings to a host (property manager), they’re a reportable seller. However, if the income, minus the manager fees, is received by the owner, then the owner is regarded as the reportable seller.
To avoid confusion, please note that Your.Rentals platform relies on users to inform of the reportable seller. Though some property managers may specify their own bank account, they may still pay out to the owner who is the reportable seller.
Bank accounts are just one example and there are other use cases to consider.
The reportable seller information needs to be collected for each listing.
Individual reportable seller
The landlord themself is the Reportable Seller for properties located within the EU and/or rented out by a resident in an EU country for tax purposes.
Refer to this decision tree to find out the Reportable seller for each listing you manage.
Business reportable seller
There are two options (property is within the EU or the owner is an EU resident):
- Fixed rent: If a business manages rented property owned by others and bases the agreement on a fixed rent paid to the owners, the company is the reportable seller. The rental income should be accounted for in the company books.
- Commission based: If your business manages rental properties owned by others, and you have a commission agreement, the property owner becomes the Reportable seller.
DAC7 reporting for different vacation rentals channels
Now that we’ve figured out who is the Reportable seller, it’s time to understand how the reporting process works.
Not always the reportable seller has to do it by himself. If the transaction chain involves multiple platforms – such as an OTA and a channel manager, the intermediaries at the bottom may have their own taxation reporting rules and guidelines.
Sales channels like Airbnb and Expedia, require Your.Rentals to share the reportable seller taxation information with them to enable reporting to the respective tax authorities.
Other OTA channels and in case of Direct bookings processed via Your.Rentals, Your.Rentals must report your taxation information to the Danish Tax Agency (Skattestyrelsen) who in turn will share your information with the relevant authorities in other EU Member States.
Digital platforms that are non-reportable sellers
- Government entities
- Publicly traded entities
- Sellers who rent out immovable properties at a high frequency (more than 2000 activities per reporting period) like hotels
- Small sellers of goods (less than 30 activities with a revenue under 2000 euros per reporting period)
Not considered as digital platforms
- Websites of firms selling their own products (direct bookings websites)
- Platforms that do not take part in completing transactions or are unaware of transaction values like Facebook Marketplace
- Payment processing hubs like PayPal
In Spain: DAC7 and Model 179 data reporting requirements compared
DAC7 information (for Individual / Business)
- Full name / Legal name
- Primary address of residence
- Tax identification numbers (TINs) per listing and/or for individual Host/Co-Host
- Date of birth (for Individuals)
- Country of residence
- VAT identification number (if applicable)
- Financial account identifier(s), such as bank account or other payment services account
- Listing address
- Property registration number
- Number of days booked
- Quarterly earnings per listing on the Airbnb platform, along with the number of listings
- Airbnb service fees
- Account’s holder name, if different from the Host / Business registration number
Model 179 information
- Owner’s identification data for the rented property.
- Property identification: full address, cadastral reference and capacity determined by the Occupation licence or similar documen.
- Contract number for the property rental.
- Start date of the tourist accommodation activity.
- Income received by the owner from property exploitation.
- Date of transaction intermediation.
- Number of days the property was rented.
- Payment method used for accepting reservations.
Attention! To report income, platforms require your tax ID rather than your VAT (VAT is optional).
Here are some EU countries’ tax ID local names based on OECD guidelines. Please consult your local tax advisor for further verification.
- Austria – Steuernummer
- Belgium – Numéro d’identification du registre national
- Bulgaria – Единен граждански номер
- Croatia – Osobni identifikacijski broj
- Cyprus (Republic of) – Αριθμός Φορολογικού Μητρώου
- Czech Republic – Rodné číslo
- Denmark – CPR-nummer
- Estonia – Isikukood
- Finland – Henkilötunnus
- France – Numéro fiscal de référence / Numéro SPI
- Germany – Identifikationsnummer
- Greece – Αριθμός Φορολογικού Μητρώου
- Hungary – Adóazonosító jel
- Ireland – Personal Public Service Number
- Italy – Codice fiscale
- Latvia – Personas kods
- Lithuania – Asmens kodas
- Luxembourg – Nationale identifikationsnummer
- Malta – Numru ta’ identifikazzjoni personali
- Netherlands – Persoonsnummer
- Poland – Numer identyfikacji podatkowej
- Portugal – Numero identificação fiscal
- Romania – Cod numeric personal
- Slovakia – Rodné číslo
- Slovenia – Enotna matična številka občana
- Spain – Número de identificación fiscal
- Sweden – Personnummer
FAQ on DAC7 directive
What if I don’t provide my taxpayer information to an OTA or channel manager?
If your listing is missing some information required by DAC7, it can lead to freezing payouts and/or blocking the ability to list your properties. In certain cases, individual sales channels will determine their own policies for not providing the taxpayer information.
Make sure to provide the relevant information ASAP, so that your listings remain online in sales channels, receiving bookings and processing payouts.
I host multiple listings in one country. What information do I need to provide to the platforms?
DAC7 needs taxpayer information for each property listing and one taxpayer info can be used for many listings. You can even use different info for different listings.
I host listings in multiple countries. What Information do I need to provide to the platforms?
For every property listing, DAC7 needs you to give taxpayer information. This can include a tax identification number (TIN) for each EU country in which you’re a resident or host property listings.
Note: If you happen to host listings both within and outside of the EU, then you need to know that the request for taxpayer information under DAC7 is separate from any taxpayer information obligations you may have in other countries!
I am not the property owner of my listing. What information do I need to provide to the platforms?
If you’re managing someone’s property, and you’re just passing the rental income straight to them, you need to provide the tax information of the owner. But If you have a management contract signed for the property and earn some money, you need to provide both your information as a reportable seller and of the owner of the property.
I am not an EU resident property manager, will my data be shared?
Yep, if you have a property listing in the EU, DAC7 applies to you – whether you’re an individual or a company – regardless of where you live.
Can the Tax Authorities review my income tax returns for past years?
Each EU country has different rules governing the review of prior tax returns. They may have a specific window to review filed returns. It’s best to consult with a local tax advisor to know more.
Note: Being subject to VAT doesn’t always mean you must file VAT returns. As a private individual renting out your homes, you’re exempt from filing VAT. Therefore, the answer to the platforms’ question is yes, you’re subject to VAT but exempt from filing VAT returns.
If I deactivate my Airbnb or Your.Rentals account now, will my information be shared?
If you rented a property through Your.Rentals or received income from a property listing in Europe from 2023 and you’re an EU resident, your information may be reported under DAC7.
Assume you accept a booking in May 2023 and then deactivate your account – OTA will report your details until you deactivate it. However, if you deactivate your account before 2023, your details won’t be reportable.
What is the legal basis for collecting my data? (Data protection rights)
According to DAC7 (EU Council Directive 2021/514), Your.Rentals and other sales platforms must share data for users who earn from renting properties in the EU or are based in an EU Member State. Legal obligations are in place to protect the privacy and information of involved parties.
Who will Your.Rentals share my data with?
Your.Rentals will share your data with the Danish Skattestyrelsen for DAC7 compliance purposes. The Danish Skattestyrelsen will then share this data with the tax authorities in the EU Member State(s) where you are resident and/or where your property listing(s) are located.
I do not have a Your.Rentals account – will Your.Rentals collect my data for DAC7 purposes?
Your.Rentals may collect specific tax information in some cases even if you don’t have a Your.Rentals account. This may happen when you earn income via a property listing on the platform, and the registered user of a property manager account shares your data with us. See our Non-User DAC7 Privacy Notice for details.
- DAC7 increases information exchange between EU countries, specifically aimed at platforms facilitating economic transactions in various leasing types. This includes renting out properties.
- As a vacation rental owner or manager in Spain you should know about DAC7, the Spanish taxpayers – about its relationship with Form 179 – in order to meet your tax obligations.
- Although some information could be duplicated between DAC7 and Form 179, the Spanish Tax Agency is expected to align reporting requirements, thereby streamlining the process for vacation rental owners.
- Now you are aware of the common data requested in DAC7 and Form 179, thus as a vacation rental owner you can ensure accurate reporting and compliance with both domestic and European tax regulations.