Tax Reporting Obligations for Sellers

DAC7 is the EU Directive EU 2021/514, which is a new addition to the existing EU Directive 2011/16/EU dealing with administrative cooperation in the field of taxation. DAC7 introduces a requirement for digital platforms to collect, verify and report data and information on reportable sellers conducting relevant activities through their digital platforms. Similary, the UK’s Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 introduces equivalent obligations for UK-based platforms and sellers.

Under these laws, digital platforms like Whisky Auctioneer are required to submit relevant data to tax authorities in the EU and the UK. This ensures transparency and compliance with international tax regulations. Rum Auctioneer has taken the position that it qualifies as a digital platform (hereafter: "Rum Auctioneer”, “Rum Auctioneer’s platform” or “the platform”).

Your data will in principle be reported if the following conditions are met in a single calendar year: 

• you are a user registered on the platform; and
• you sell goods/a good or you are paid / credited in connection with a sale of goods/a good; and
• you are a resident of the UK or an EU Member State; and
• you are not an “excluded seller”.

However, if during a single calendar year Rum Auctioneer facilitated less than 30 relevant activities by means of the sale of goods and for which the total amount of consideration paid or credited did not exceed EUR 2,000, your data will not be reported (“excluded seller”). In addition, your data will in principle neither be reported if you are a governmental entity or a listed entity (also “excluded sellers”). Reports should be submitted annually, by the end of January following the previous year to the relevant tax authority. I.e. the Y2023 report should be filed by 31 January 2024. Note that additional time is granted for the due diligence procedures regarding existing sellers on 1 January 2023. Rum Auctioneer should report the information about these existing sellers by 31 January 2025.

Rum Auctioneer seeks to register itself as a Reportable Platform Operator in the Netherlands for the time being. The Dutch tax authorities will automatically exchange the information about the sellers with relevant other tax authorities.

The reporting obligations under DAC7 (EU Directive) and The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (UK legislation) do not change your existing tax obligations.

While this does not create new tax obligations for you, tax authorities may use the reported information for purposes such as tax audits. 

If you require advice on your personal income tax, corporate income tax, value added tax position(s) and/or position(s) for other taxes or levies, we would recommend you consult with a professional tax advisor. 

While these rules are already in place in the EU and UK, similar reporting obligations may soon be adopted by other countries, including those under the OECD framework.

To comply with these laws, platform operators are required to undertake a significant due diligence process and it requires accuracy of the following information:

For Private Individual Sellers:

• First and Last Name
• Primary Residence Address
• Tax Identification Number (TIN) / National Insurance Number
• VAT identification number, where available
• Date of Birth
• Place of Birth (If a TIN is not available)

For Entities:

• Legal Company Name
• Registered Business Address
• Tax Identification Number, including each Member State of issuance
• VAT identification number, where available
• Business Registration Number
• The existence of any permanent establishment through which relevant activities are carried out in the EU and UK, where available, indicating each respective EU Member State, where such a permanent establishment is located.

In addition, the following information should in principle be collected of sellers (both entities and individuals):

• The Financial (Bank) Account Identifier;
• Where different from the name of the seller, in addition to the Financial (Bank) Account Identifier, the name of the holder of the financial account to which the consideration is paid or credited, as well as any other financial identification information available Whisky Auctioneer with respect to that account holder;
• Each EU Member State / Country in which the seller is resident;
• The total consideration paid or credited during each quarter and the number of relevant activities (i.e. sales) paid for or credited;
• Any fees, commissions or taxes withheld or charged by Whisky Auctioneer during each quarter.

If you do not have a TIN number you can apply for one from your local tax authorities, or speak to your tax advisor. If you will not provide the requested information after two reminders following the initial request, Whisky Auctioneer should take appropriate actions, such as closing your account and withhold payment.

All of the information provided may require verification and evidence provided in the form of a National ID document (such as Driving License or Passport) and evidence of the primary address.

Rum Auctioneer will pre-fill reports for our impacted sellers based on your account details. All you need to do is add your tax identification number (TIN) and review the following information in the Seller Account Details section of your Dashboard for accuracy:

Private Individuals

• your country of tax residency
• your full name
• your date of birth
• your billing address

Companies

• legal company name
• company registration number
• VAT number

Rum Auctioneer will contact you by email and telephone to provide reminders if we are missing any of your required information. If you do not provide the necessary information within the specified timeframe, we are required by law to place temporary restrictions on your account - you will not be able to sell any new lots on our platform and any payments to you will be suspended until the information is provided. 

To make sure that you are aware of what information has been reported to the relevant tax authorities and/or other tax authorities as a result of the automatic exchange of information between tax authorities, you will receive a statement from us ultimately on 31 January of the year following the relevant reporting year.

Our terms and conditions on the safe and secure use of your data will always apply and you can read more about this in our Privacy Policy.