Italy DAC7 Directive: What Is It and When Is It Required to Sell on Amazon?

What is DAC7?

The Directive on Administrative Cooperation, known as DAC7, represents the seventh amendment to a European Union directive (EU Council Directive 2021/514). This directive was formulated to regulate the operations of online stores that facilitate sales for companies with their main headquarters in the European Union. The fundamental objective of DAC7 is to ensure greater financial transparency and the regularity of commercial transactions, obliging platforms like Amazon to collect, verify, and communicate financial information and seller details to the competent authorities.

Who is DAC7 for?

The scope of DAC7 specifically concerns sellers with a registered address within the European Union. If your headquarters are located in any EU country, regardless of the marketplace you operate on, you may be affected by this regulation. In particular, this category includes sellers who have generated at least:

• €2,000 in annual sales;

• 30 transactions in the current calendar year or any subsequent year.

This means that if you sell through Amazon and meet these requirements, you must pay attention to DAC7 and comply with its provisions.

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Information required and actions to take

To comply with DAC7 requirements, Amazon has specific responsibilities:

• Collection of additional information: Amazon must collect further information from the relevant sellers (see table).

• Verification of information: The platform is required to accurately verify the information collected, also using the databases of the competent authorities.

• Reporting of seller data: Amazon must communicate relevant financial details, such as the amount earned by sellers, the fees applied, and bank details.

*The required VAT number is that of the primary address. In the absence of this, it is possible to declare the VAT of any other member state. If neither the first nor the second case is possible, then declare that you do not have VAT in the dedicated portal.

What happens if I don't complete DAC7?

If the requested information is not provided within the established timeframe, Amazon is authorized to deactivate the accounts of non-compliant sellers. These accounts will remain inactive until the requested information is submitted, verified, and confirmed. When is DAC7 needed? To avoid account deactivation, the requested data must be provided within 60 days of receiving the first notification. Subsequently, the data must be reconfirmed every 36 months, or whenever changes are made to any of the relevant data.

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Conclusion

The DAC7 regulation represents a significant step towards greater transparency and compliance in online commercial transactions within the European Union. If you operate as an Amazon seller and meet the criteria defined by DAC7, it is imperative that you take the necessary actions to comply with this regulation. Make sure to add the requested information in the compliance portal within the established deadlines and to review and confirm such information according to the scheduled timing. Paying attention to DAC7 will not only ensure compliance with current laws but will also contribute to maintaining the integrity of your account and your sales activities on Amazon. For any other questions about the regulation or for more information regarding selling on Amazon, contact us without obligation.