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14.03.2023 | latest update: 19.06.2024 | by Lili


EU tax transparency extended to online marketplaces



Among many other changes, 2023 ushered in the extension of EU tax transparency legislation to online marketplaces. This especially concerns cross-border vendors selling online in EU member states other than their own.


But what does the new directive mean in practice for sellers and brands in e-Commerce?



The new rules

Council Directive (EU) 2021/514, adopted in March 2021 has entered into force on 1 January 2023. The aim of this directive is to ensure tax transparency in the EU, which means that sellers active on online platforms will not be able to hide behind country borders and “forget” to pay sales taxes after their revenue earned in a member state other than their own.


To reach this end, the new directive creates an obligation for online marketplaces to provide a report to local tax authorities about transactions that occurred on their platform. In order to make the information package complete, online marketplaces have to contain personal and/or business data of sellers whose transactions are featured in the report. This includes name, date of birth, business address, tax ID, etc.


Exempted from this are sellers with fewer than 30 transactions, or a sales value of less than 2000 euros per year.


Marketplaces are also required to validate data received from their sellers. If a seller doesn’t provide sufficient data, the marketplace is obligated to suspend their account until the matter is rectified. The ultimate penalty for continued non-compliance is the closure of a seller’s account.


Reports have to be filed with the local tax authority, and not the country where the online marketplace is registered in. The first report is due on 1 January 2024. Once the data is in, it’s the responsibility of each EU member state to exchange necessary tax information with each other.


Although the directive enters into force on 1 January, several member states, including Germany, Poland, Spain, Slovenia and Italy have been granted a two-month extension because they haven’t been able to adopt internal rules in time that correspond to the directive. In Germany, for example, the internal law is called Platform Tax Transparency Act (PStTG), was adopted in November-December 2022 and entered into force in January this year.


It’s important to note that the new directive doesn’t impose any additional taxes on sellers or marketplaces. These actors only have to provide sales data to relevant authorities in order to eliminate tax evasion that may arise out of a seller not reporting on their sales that have occurred in a different EU member state.


This way, the directive creates a level playing field for all sellers in all countries and helps national tax authorities get a clear picture of the real revenue of certain taxpayers. And, whether intentional or not, the information submitted in these reports helps something else too: your brand’s IP rights.




+++ Update June 2024 +++


The date for the exchange of the first report by the member states with the tax authorities was scheduled for 29 February 2024. However, Germany Hungary, Poland and Romania were not able to exchange the needed information with the tax authorities of the respective countries, which is the basis for the enforcement of local tax laws.

At the end of May 2024, the European Commission sent letters of formal notice to the countries, that did not provide the required report. These member states now have two months to respond and address the shortcomings raised by the Commission. In the absence of a satisfactory response by the member states, the Commission may decide to issue a reasoned opinion.




Tax transparency from an online brand protection point of view

Information is power, especially when it comes to online sellers who try to hide behind the relative anonymity of e-Commerce. Several marketplaces, including Wish and AliExpress don’t display a lot of information about their sellers, which often enables fraudsters to get away scot-free when infringing on your brand’s IP rights and endangering consumers.



Screenshot of a random seller’s shop information on wish.com

Screenshot of a random seller’s shop information on wish.com



Luckily, legislators all over the globe, especially the EU and the US have caught on to this practice and try to create fairer conditions for consumers, which also benefits your IP rights.



Related topics

A new era for digital services in Europe


New INFORM Consumers Act to guard IP rights in the US



The information online marketplaces have to gather, including the seller’s business name, tax number and contact information, is exactly what we need in order to discover who is behind an infringing product listing. Previously, marketplaces were able to claim they didn’t know anything about their sellers, but now, thanks to the new legislation, this won’t be acceptable. At least not in the EU.


Therefore, online brand protection experts at globaleyez welcome the new directive and look forward to the added benefits it provides for the protection of our clients’ IP rights.



Transparency for IP infringements right now

As mentioned before, the deadline for submitting the first tax transparency report was not met by all countries and it will take some time until all the reports are available. But what if you don’t want to wait that long?


Luckily, you don’t have to. globaleyez has several services that can ensure transparency right away about who’s using your IP rights both on- and offline.


Our marketplace monitoring service, for instance, detects potentially IP infringing listings on over 150 online marketplaces worldwide. Versatile filters allow us to separate authorized listings from unauthorized, narrow the search down to a single seller or expand it to cover entire countries, and much more.


For more inclusive search results, we often suggest a round of image monitoring. This service uncovers IP infringing imagery like ads and product pictures elsewhere online, including social media and single webshops.


If you want to learn more about the quantity of products a vendor sells on a marketplace, or which of your products is doing best on which marketplace, we recommend our marketplace sales tracking service. Besides IP protection, sales tracking is also perfectly suited to gather indispensable data about a new market in preparation of a market-entry.


Once we’ve rounded up the suspicious listings, a test purchase helps us discover vital information like the origins of the product and the general behaviour as well as more detailed contact information of the seller.


Finally, our enforcement service ensures that infringing content, including product listings and imagery is removed from the internet. Thanks to our extensive network of contacts in the industry, e.g. marketplaces, domain registries, social media platforms, etc, we conduct such takedowns as quickly and efficiently as possible.




The EU tax transparency directive ensures the availability of more comprehensive information about cross-border sales in the EU. While its main aim is to reduce tax evasion, it provides the added benefit of more transparency among online sellers.


Online brand protection experts at globaleyez welcome this development and hope that the obligation to provide such personal and business data may deter a fraudster or two from infringing on our clients’ IP rights.


If you have any concerns about the protection of your brand’s IP rights, contact us and let us know how we can serve you.