Canada

Canada is implementing new reporting rules for digital platform operators (DAC 7) that must be met by January 31, 2025. This involves sharing information on seller data and tax identifiers to ensure compliance with the new standards. The European Commission has confirmed the equivalence of Canada's rules with 17 EU member states in this context.

Who must register in DAC 7 Canada?

A reporting platform operator is defined as a platform operator that either operates within Canada or, while based outside of Canada, facilitates the sale of goods or services, including property rentals, to Canadian customers. However, platforms that do not allow sellers to profit or do not involve transactions with reportable sellers are exempt from these reporting requirements. A reportable seller is typically an individual or entity who:

• Is registered on a digital platform.
• Resides in Canada or a country with similar reporting requirements.
• Engages in selling goods or services, such as property rentals, to customers in Canada or other participating countries.
• Platforms often refer to these sellers’ using terms like "Partners," "Creators," "Drivers," "Guides," "Hosts," "Homeowners," "Restaurants," "Couriers," or similar titles.

Which operators do not require registration in Dac 7 Canada?

Non-Canadian resident platform operators do not require registration with Dac 7. However, it is important to note that Canadian residents are required to register and report their activities.

Tax registration of platform operators in Canada

Platform operators in Canada must obtain a business number and register with the RZ tax reporting programme to submit information. The new reporting rules for digital platform operators come into effect on 1 January 2024, and all operators have until 31 January 2025 to submit the required vendor data and tax identification information.

What type of activity must be reported in Canada?

In Canada, various types of activities must be reported, including charitable activities, financial transactions and suspicious activities. Organisations must detail the charitable activities they intend to undertake, as well as submit a suspicious transaction report to FINTRAC when financial transactions occur or are attempted. Tax and labour records should also be considered to determine whether a business is present in the country.

Deadlines for DAC7 reporting in Canada

The first DAC7 report for digital platform operators in Canada is due by 31 January 2025 for calendar year 2024. This rule will continue to apply for subsequent years.