Introduction to the DAC7 Directive and the New Digital Transparency Paradigm

The digital economy has radically transformed how goods are traded and services are provided, creating unprecedented challenges for tax administrations worldwide. In Portugal, the transposition of Directive (EU) 2021/514, commonly known as DAC7, represents a historic milestone in the fight against tax evasion and the promotion of tax fairness. This regulation obliges digital platform operators to collect and report detailed information about the income earned by their sellers and service providers. The relevance of this topic in 2026 is absolute, as the Tax Authority (AT) already possesses advanced data-matching algorithms, making the omission of digital income a high compliance risk.

DAC7 does not only target large e-commerce multinationals; it covers any digital interface that facilitates interaction between sellers and buyers. From local accommodation to the sale of second-hand items, passenger transport, and meal delivery, the digital ecosystem is now under strict tax scrutiny. Under Article 2 of Decree-Law No. 61/2013 (as amended to include DAC7), the automatic exchange of information is now the standard, eliminating the boundaries that previously protected the informal online economy.

The Legal Framework and Administrative Cooperation

The implementation of DAC7 in Portugal is based on the need for tax harmonization within the European Single Market. The Portuguese legislator, when adapting national law, sought to ensure that income generated through platforms does not escape taxation provided for in the CIRS (Personal Income Tax Code) and the CIRC (Corporate Income Tax Code). This directive introduces a layer of surveillance that forces platforms to act as compliance agents, under penalty of severe sanctions. Administrative cooperation between Member States allows the Portuguese AT to receive data from a seller resident in Portugal using a platform based in Ireland or the Netherlands, closing the gap on international tax avoidance.

Scope of Application: Who are the Operators and Sellers Covered?

To understand the extent of DAC7, it is essential to distinguish between the 'Platform Operator' and the 'Excluded Seller'. An operator is any entity that provides software (websites, mobile apps) that allows sellers to be connected to other users for the performance of relevant activities. These activities include the rental of immovable property (residential or commercial), personal services (independent work), the sale of goods, and the rental of any means of transport.

Sellers Subject to Reporting and Practical Exceptions

Not all digital platform users will be reported. The legislation provides for de minimis thresholds to avoid overloading the system with irrelevant transactions. A seller is considered 'excluded' if they perform fewer than 30 transactions for the sale of goods in a reporting period and the total amount of consideration paid or credited does not exceed €2,000. According to Article 10-B of Decree-Law No. 61/2013, government entities and listed companies are also exempt from this specific reporting.

Practical Example 1: The Second-Hand Goods Seller
Mr. João uses a popular platform to sell his collection of old records and books. During the calendar year 2025, Mr. João made 35 sales, totaling €1,800. Although the total value is less than €2,000, Mr. João exceeded the 30-transaction limit. As such, the platform is required to report his tax identification data (NIF) and the total value of sales to the Tax Authority. If Mr. João had made only 25 sales for the same €1,800, no reporting would be required under DAC7.

Due Diligence Obligations

Platforms do not just send data; they must verify the accuracy of the information provided by sellers. This due diligence process includes collecting the full name, primary address, NIF (Tax Identification Number), and, for companies, the commercial registration number and VAT identification number (pursuant to Article 27 of the VAT Code).

Verification Procedures and Deadlines

Platform operators must complete due diligence procedures by December 31 of each calendar year. If a seller fails to provide the necessary information after two warnings and 60 days, the platform is legally obliged to close the seller's account or withhold the payment of income. This coercive mechanism ensures that transparency is not optional.

Fiscal Impact for Individuals and Companies in Portugal

Reporting via DAC7 does not create a new tax, but ensures that existing taxes are applied. For individuals, the greatest impact lies in Category B (Business and Professional Income) and Category G (Capital Gains). When a user sells goods systematically, the AT may consider that a commercial activity exists, requiring the opening of an activity with the tax office.

Taxation of Local Accommodation and Leasing

In the case of Local Accommodation (AL), platforms like Airbnb or Booking already reported data, but DAC7 standardizes and details this reporting. The information includes the number of days the property was rented and the registration number of the accommodation unit. According to Article 8 of the CIRS, this income can be taxed as Category F (Property) or Category B, depending on the taxpayer's option and the nature of the activity.

Common Errors to Avoid

• Thinking the €2,000 limit is per platform: The limit is per seller, per platform. However, the Tax Office will aggregate all reports from different platforms.
• Ignoring foreign income: Using a platform based in the US or China does not exempt reporting. DAC7 provides for information exchange agreements with third countries.
• Confusing turnover with net income: Platforms report the gross amount. Platform commissions are costs that must be documented and deducted in the IRS/IRC return, according to Article 23 of the CIRC.

Sources and Legal References

• Decree-Law No. 61/2013: Establishes rules for administrative cooperation in taxation.
• Directive (EU) 2021/514 (DAC7): Amends Directive 2011/16/EU on administrative cooperation.
• Portuguese Personal Income Tax Code (CIRS): Articles 3, 8, and 10.
• Portuguese Corporate Income Tax Code (CIRC): Articles 4 and 23.
• Portuguese VAT Code (CIVA): Articles 27 and 53.
• General Tax Law (LGT): Article 16.