On 22 June 2021 the OECD issued a report entitled “Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods”. The Report introduces an optional module to the model reporting rules for digital platform operators published by the OECD in July 2020, extending the scope of the model reporting rules to the sale of goods and the rental of transportation means.
Furthermore, the Report provides for an international legal framework to exchange information on income derived through digital platforms. With the Report, the OECD model reporting rules for digital platform operators are more aligned with DAC7. DAC7 imposes reporting obligations for digital platform operators which must be implemented by the European Member States not later than 31 December 2022.
The impact of the OECD and EU initiatives are far-reaching. Their implications are not only limited to digital platforms falling within their scope, but also extend to sellers whose information will also be exchanged pursuant to them. The seller due diligence requirements may prove to be extremely burdensome and business sensitive. Multinationals should not underestimate the operational impact for platforms with a high volume of sellers. The reporting obligations have a wide scope covering many business models. Compliance with these new reporting rules requires a thorough analysis of their scope and how to implement compliance procedures.