Author: Hasan Can Soygök, Founder, Remotify.co
If you earn money through platforms like Upwork, Fiverr, Airbnb, or even selling stuff on Vinted, there’s an EU tax rule you need to know about. It’s called DAC7, and it went live on 1 January 2023. Here’s what it does and why it matters, even if you don’t live in Europe.
What is DAC7?
DAC7 is an EU directive that forces digital platforms to report how much their users earn. Every year by 31 January, platforms must hand over detailed income data to tax authorities in the EU member state where they’re registered. That data then gets shared automatically across all 27 EU countries.
The information reported includes your full name, address, date of birth, Tax Identification Number, bank details, how much you earned per quarter, and how many transactions you completed. If you rent out property, the property address and number of rental days go in the report too.
In short, if you earn money through a platform that operates in the EU, the taxman now sees exactly what you made.
Who does it apply to?
DAC7 covers four types of platform activity: selling services (freelancing, consulting, gig work), renting out property (short-term rentals), selling goods, and renting out vehicles or transport.
The platforms doing the reporting include the big names you’d expect. Upwork, Fiverr, Airbnb, Booking.com, eBay, Amazon Marketplace, Vinted, Uber, and Deliveroo all fall under this rule. But it’s not just EU-based companies. Any platform that connects sellers with buyers in the EU must comply, regardless of where it’s headquartered. That’s why Upwork (a US company) now sends “Form DAC7” statements to EU-based freelancers.
There’s one important distinction in the thresholds. If you sell goods casually (think clearing out your wardrobe on Vinted), you’re exempt if you had fewer than 30 sales AND earned under €2,000 in a calendar year. But for freelance services, property rental, and transport rental, there is no minimum threshold. Every euro gets reported from the very first transaction.
Why should freelancers care?
DAC7 doesn’t create any new taxes. You were always supposed to declare your platform income. The difference is that before DAC7, tax authorities had almost no way to verify what you earned on platforms. Now they get automated, quarterly breakdowns of your income directly from the platform itself.
If there’s a gap between what the platform reports and what you declared on your tax return, expect a letter from your tax authority. In some countries, automated cross-referencing is already flagging discrepancies.
For freelancers who’ve been diligent about declaring everything, nothing changes. For those who haven’t, the window to quietly sort things out is closing fast.
The practical steps are straightforward. Make sure your Tax Identification Number is correct on every platform you use. Keep records that match what platforms report. If you haven’t been declaring platform income, talk to a tax advisor sooner rather than later.
What if you’re outside the EU?
If you’re a freelancer in the US, Australia, India, or anywhere else outside the EU, DAC7 doesn’t automatically make you reportable. The directive targets EU-resident sellers.
But there are two catches. First, platforms are collecting identity and tax data from everyone to figure out who is and isn’t reportable, so you’ll likely encounter DAC7 verification requests regardless. Second, if you’re a digital nomad spending time in an EU country, you might accidentally trigger tax residency rules that bring you within scope.
And here’s the bigger picture: the EU isn’t alone anymore. The UK launched near-identical reporting rules on 1 January 2024. Canada did the same. Australia rolled out its own version (the Sharing Economy Reporting Regime) in two phases through 2023 and 2024. New Zealand, Norway, and others have followed. The OECD has created a framework for countries to share this platform data with each other across borders.
The direction is clear. Platform income is becoming visible to tax authorities everywhere, not just in Europe.
Penalties for platforms that don’t comply
The consequences for non-compliant platforms vary by country but they’re steep. The Netherlands can fine platforms up to €900,000. Poland goes up to roughly €1.15 million. Germany caps fines at €50,000 for registration failures. Ireland charges €2,535 per day for overdue returns.
For individual sellers who refuse to provide their details, the process is the same across the EU. You get two reminders. After 60 days, the platform either freezes your payments or closes your account entirely.
The bottom line
DAC7 is not a future concern. It’s been running for over two years and the data is flowing. The first cross-border data exchanges happened in February 2024. Tax authorities across the EU are now sitting on platform income data they never had before.
If you freelance through digital platforms, the simplest thing you can do is make sure your tax affairs are in order. The platforms are reporting. The tax authorities are watching. And this is only going one direction.