Important Information for Sellers: DAC7 Explained

Hey, valued member of the Eqithra community! We all know that great feeling when a saddle pad that's been sitting in the closet, still in excellent condition, or a pair of breeches that have become a bit too small, finds a new owner. It's good for the wallet, the environment, and the happy new owner. Eqithra was created for this very purpose – to bring passionate horse people together and give quality gear a new life.

Recently, however, there has been talk in Estonia and elsewhere in Europe about something with a complicated name – DAC7. It might sound like a codename from a spy movie, but it's actually a new European Union regulation that affects all of us here at Eqithra.

But don't worry! We're not going to tire you with legal jargon. On the contrary, let's break this topic down together, simply and with examples, so you can continue selling with peace of mind.

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What exactly is DAC7? (And no, it's not a new tax!)

The most important thing to remember: DAC7 is not a new tax! It's a rule that obligates us, as a platform, to share certain data. The rule itself does not create any new tax liability for you or change how income is declared in Estonia.

Simply put, DAC7 is a major, pan-European rule aimed at making trade on online platforms more transparent. Tax authorities across Europe want to get a better overview of the income earned through platforms to ensure fair competition.

Under this rule, we, as the Eqithra platform, have a legal obligation to collect and report information to the Tax and Customs Board (EMTA) about sellers whose activity exceeds a certain threshold.

We have essentially become an information intermediary between the law and the seller.

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The Magic Numbers: 30 and 2000

Now, to the heart of the matter. When does this obligation arise? Here are two magic numbers to track during one calendar year (January 1 – December 31):

We have an obligation to report your data if, within one calendar year, you do EITHER of the following:

  • Sell 30 or more items.
  • Your total sales revenue exceeds 2000 euros.

It's important to note that fulfilling just one of these conditions is enough. Let's look at some examples:

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Real-life Examples

Example 1: Occasional Seller Anna

Anna sells an old saddle (€800), a few saddle pads (totaling €150), and one pair of boots (€100) over the year. In total, she makes 5 transactions and earns €1050.

Are we obligated to report Anna's data? No. Her number of transactions (5) is below 30, and her total sum (€1050) is below €2000. Anna can carry on without any worries.

Example 2: Active Organizer Peter

Peter does a major clean-up and sells 35 different smaller items during the year: lots of halters, protective boots, stirrups, etc. The price for each item is small, and by the end of the year, he has earned only €700 in total.

Are we obligated to report Peter's data? Yes. Although the amount he earned is small, his number of transactions exceeded the 30-item limit.

Example 3: One-time High-value Seller Kati

Kati sells only one item – her custom-made competition saddle for €2500.

Are we obligated to report Kati's data? Yes. Even though she only made one transaction, her revenue exceeded the €2000 limit.

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How do we count transactions?

This is where an important nuance comes into play. Our business model is built on trust and direct contact.

1. The transaction occurs through the platform

If a buyer makes a purchase based on your listing and a new order is created in your Eqithra account, it's simple. Our system automatically records this transaction. We log the transaction and the price you entered. This is the data we use to track the 30-transaction and €2000 thresholds. It's clear and transparent for both sides.

2. You find each other on the platform, but complete the transaction outside of it

This is a common practice – a buyer writes to you, you meet up, and you complete the transaction in person. You asked how we control this?

The honest answer is, we cannot control this. Our systems only see and automatically count transactions that are confirmed through the platform.

However, the law does require us, the platform, to do everything in our power to collect this information. For this reason, our terms of use now include a clause stating that, according to the law, you as the seller *sort of* have an obligation to inform us about transactions that originated on the platform but were finalized outside the system.

In this regard, the responsibility is purely yours – we have no way of controlling whether or not you make transactions outside the platform. Ultimately, we can only keep records and report to the EMTA based on the transactions we are actually aware of.

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In Summary

We hope this brief guide has made things clearer. Here are the three most important takeaways:

  • This is not a new tax, but an information reporting obligation for us as the platform.
  • It affects more active sellers who make over 30 transactions or whose sales revenue exceeds €2000 per year.
  • We can only account for those transactions that we are informed about or that have occurred directly on the platform.

Eqithra is and will remain a community where we give equipment a new life together. These new rules are just a small administrative step we are taking together to make the entire European digital market fairer and more transparent.

Happy and successful selling!