Overview

The European Union's Directive on Administrative Cooperation, 7th Amendment — commonly known as DAC7 — introduces mandatory tax reporting obligations for online marketplaces like Amazon. Under EU Directive 2021/514, platforms that facilitate sales for EU-based sellers must collect, verify, and report seller financial and identification data to tax authorities. For Amazon sellers operating in European marketplaces, understanding and complying with DAC7 is essential to maintaining an active selling account.

Key Points / What Sellers Need to Know

• Mandatory information collection — Amazon is required to gather specific identification details from sellers whose primary address is within the EU, including tax identification numbers (TINs), business registration numbers (BRNs), and company registration numbers.
• Verification process — It is not enough for sellers to simply submit their information. Amazon must verify the accuracy and reliability of the data provided before it can be reported to authorities.
• Financial data reporting — Amazon will report seller sales revenue, the fees it charges to sellers, and banking details to the relevant tax authorities in the applicable EU member state.
• 60-day compliance window — Once a seller receives a notification requesting the required information, they have 60 days to provide it. Failure to respond within this period triggers enforcement action.
• Account deactivation risk — Sellers who do not submit and verify the required information within the 60-day window will have their accounts deactivated until they become compliant.

How DAC7 Works in Practice

DAC7 places the reporting burden on the marketplace platform rather than on individual sellers, but sellers must cooperate by providing accurate data. When Amazon identifies a seller who falls under the directive's scope — primarily those with a primary address in an EU member state — it will send a performance notification requesting the necessary identification and tax details. Sellers should treat this notification as urgent, since the 60-day clock starts immediately. Amazon then cross-checks and verifies the submitted information before compiling reports for the relevant national tax authorities. These reports include not just seller identity data, but also detailed financial information such as total sales revenue generated on the platform and the fees Amazon charged.