On 20 July 2023, the United Kingdom’s HMRC issued a policy paper outlining a comprehensive plan to establish reporting regulations for digital platform operators operating in the United Kingdom (UK). This initiative, which aligns with the OECD Model Rules (DAC7) for reporting by digital platform operators, was implemented as part of the 2023 Finance Act, enacted on 11 July 2023.
This measure introduces regulations which will require certain UK digital platforms to report information to HMRC about the income of sellers of goods and services on their platform. HMRC will then exchange the information with the other participating tax authorities for the jurisdictions where the sellers are tax resident.
Under the Organization for Economic Co-operation and Development (OECD) rules, digital platforms in participating jurisdictions will be required to provide a copy of the information to the taxpayer to help them comply with their tax obligations.
The regulations are scheduled to take effect starting from 1 January 2024, with the reporting obligation commencing in January 2025.
