By John Ensor •
Updated: 25 Jan 2024 • 17:44
Image of Ebay headquarters.
A recent shift in European legislation has brought significant changes to private sellers using online platforms.
As of January 1, 2024, platforms for buying and selling second-hand items, like Wallapop, Vinted, and eBay, are required to report to the tax authorities if users exceed certain sales thresholds.
This change, implemented under the European Directive 2021/514, also known as DAC7, requires these platforms to share data on users who surpass the sales limit set by the Treasury.
This regulation will influence the 2025 tax returns, not the 2023 returns filed in 2024. As a result, sales made throughout 2023 will not be considered as capital gains in the upcoming tax declaration.
The types of activities that platforms need to report include property leasing, personal services, goods sales, and transportation leasing.
Platforms will collect and send details such as bank data, quarterly income, number of sales, and any collected fees or taxes. DAC7 also introduces due diligence for these platforms, ensuring the accuracy of the data sent to the Treasury.
The new regulations will not impact all users. Only those residing in the European Union, earning more than €2,000 throughout the year, or making 30 or more sales will be subject to this reporting.
The requirement to report does not alter how these transactions are taxed. The tax is applicable only if there’s a capital gain, calculated as the difference between the buying and selling price.
For instance, if you buy a car for €2,000 and sell it for €2,800. These profits are taxed within the savings income at rates from 19 to 28 per cent. If no profit is made, no tax is due, but these cannot be declared as capital losses either.
This means most users of these platforms are unlikely to owe taxes under the current rules. However, exceeding 30 transactions or earning over €2,000 euros will require users to provide tax data to the platform.
The directive aims to regulate transactions more closely and detect any undeclared financial activities or sales of counterfeit or stolen items.
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Originally from Doncaster, Yorkshire, John now lives in Galicia, Northern Spain with his wife Nina.
He is passionate about news, music, cycling and animals.
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