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The information-reporting requirement of a Reporting Platform Operator (DAC7)

Date of issue
4/21/2023
Validity
4/21/2023 - Until further notice

This is an unofficial translation. The official instruction is drafted in Finnish (Raportoivan alustaoperaattorin tiedonantovelvollisuus (DAC7), record number VH/661/00.01.00/2023) and Swedish (Upplysningsskyldigheten för rapporteringsskyldiga plattformsoperatörer (DAC7), record number VH/661/00.01.00/2023) languages.

This guidance addresses the information-reporting requirement imposed on platform operators within the sharing and gig economy.  Among the subjects discussed below are the information that reporting platform operators must collect and submit on annual information returns to the Finnish Tax Administration, and the due diligence procedures that the reporting platform operators must carry out in order to confirm the accuracy of the collected information.

The guidance contains a number of examples, presented below to serve as illustrations only, as they do not describe any actual participants of the platform economy.

1 Background information

1.1 The objective of this guidance

This is the Tax Administration’s guideline on how to apply and interpret the provisions of the following Council Directives and legal acts:

  • Council Directive (EU) 2021/514 (hereinafter referred to as “the DAC7 (Directive)”)
  • Implementing Act on Directive 2021/514 (DAC7) amending Directive 2011/16/EU on Administrative Cooperation (later DAC).
  • The Act governing the information-reporting requirement of platform economy operators to provide information in the field of taxation (Laki digitaalisen alustatalouden toimijoiden tiedonantovelvollisuudesta verotuksen alalla; Lagen om skyldighet för aktörer inom digital plattformsekonomi att lämna upplysningar i fråga om beskattning
  • § 17f of the Act on assessment procedure (Laki verotusmenettelystä; Lagen om beskattningsförfarande

This guidance discusses the information that platform operators need to collect and include in the annual information returns that they file with the Tax Administration concerning the relevant activities that both natural persons and entities have carried out facilitated via their platforms. This guidance also addresses the due diligence procedures that reporting platform operators must carry out in order to confirm accuracy of the collected information.

1.2 the DAC7 Directive and its implementation

Platform operators’ information-reporting requirements and due diligence procedures entered into force in Finland by virtue of the Act governing the information-reporting requirement of platform economy operators to provide information in the field of taxation (hereinafter abbreviated as “Act governing the information-reporting requirement of platform operators”), the amended Act on Assessment Procedure where section 17f was added, and several amendments to other Acts (such as “the Act amending the Act on assessment procedure for self-assessed taxes” — Laki oma-aloitteisten verojen verotusmenettelystä annetun lain muuttamisesta, “the Act amending § 8 of the Incomes Register Act” — Laki tulotietojärjestelmästä annetun lain 8 §:n muuttamisesta, and “the Act on the national implementation of the DAC, and on the repeal of Council Directive 77/799/EEC and an amendment to the Act on application of the Directive” — Laki hallinnollisesta yhteistyöstä verotuksen alalla ja direktiivin 77/799/ETY kumoamisesta annetun neuvoston direktiivin lainsäädännön alaan kuuluvien säännösten kansallisesta täytäntöönpanosta ja direktiivin soveltamisesta annetun lain muuttamisesta). 

The information-reporting requirement concerns the relevant activities, facilitated via the platform, that both natural persons and entities carry out. Relevant activities consist of: sales of goods and services; and rental of immovable property and modes of transport. The reporting obligation is extended even to situations where a platform operator has no information to report under a reportable period. The Act governing the information-reporting requirement of platform operators includes detailed rules on reporting relevant activities, on due diligence and registration procedures, and other obligations. The collected information on relevant activities must be submitted in line with the provisions of § 17f, Act on Assessment Procedure.The DAC7 Directive lays down that “each Member State shall take the necessary measures to require Reporting Platform Operators to carry out the due diligence procedures and fulfil reporting requirements. Each Member State shall also ensure the effective implementation of, and compliance with, such measures”.

1.3 Main content of the information-reporting requirement imposed on Platform Operators

According to the provisions of the Act governing the information-reporting requirement of platform operators, platform operators must, first of all, identify and know their customers, i.e. the parties using the platform for carrying out sales of goods/services, rental of immovable property, or rental of various modes of transport. Their identities and countries of tax residence must be determined. Furthermore, they must collect required information of the relevant activities that natural persons or entities have carried out via their platforms. And further, they must verify the accuracy of all the collected information. The information must be submitted no later than by the end of the January in the year following the reportable period.

Platform operators having the information-reporting requirement must annually submit the Tax Administration the required facts and information concerning the sellers that have used the platform, the relevant activities carried out, and the considerations paid.  The meaning of “relevant activity” is sales of goods and services, rental of immovable property, and rental of modes of transport.  In addition to the above, platform operators are required to notify the Tax Administration of not having anything to report: they must submit a “nil” statement that there were no reportable relevant activities/reportable sellers during the latest reportable period that has ended.

The information-reporting requirement is imposed on the platform operators that either are resident for tax purposes in an EU Member State or are incorporated under the laws of an EU Member State; and on the platform operators having their place of management in an EU Member State or a permanent establishment in an EU Member State.  Platform operators need to provide the seller information in one EU Member State only.

In addition, the reporting obligation is imposed on platform operators outside the EU that run a digital platform and facilitate the carrying out of relevant activities for sellers resident in EU Member States or rental of immovable property located in an EU Member State. The platform operators from non-EU countries must elect one EU Member State and seek registration with its competent authority in order to fulfil their information-reporting requirement in that Member State. 

1.4 Summary of the requirements that concern a Reporting Platform Operator

1. Find out whether you are considered a platform operator

Platform operator is a company that contracts with sellers, making its platform (a website or a mobile application) available for sellers’ sales efforts of goods or services. 

Platform operators are typically companies that offer a digital platform for providing services and selling goods.

2. If you are a platform operator,

2.1 Identify the seller and the seller’s country of residence

Identify the sellers using the platform and their country of tax residence.Collect the required information of the sellers and verify accuracy of the collected information.

2.2. Collect the required information on relevant activities

The information-reporting requirement means that you must detail the following relevant activities carried out against consideration:

    • Rental of immovable property, residential premises, commercial premises, and parking spaces
    • Personal services
    • Rental of any mode of transport
    • Sales of goods, if sales of a seller exceed €2,000 during the reportable period and if 30 or more sales took place

3. Submit your annual information return electronically

The information of the sellers, whether residing in Finland or abroad, has to be submitted by the end of January following the end of the reportable period

Information to be reported:

    • Platform operator’s identification details
    • Seller information
    • Information concerning relevant activities
    • Information concerning consideration

4. Keep records on the sellers and relevant activities, and store the records for future reference

2 Definitions

2.1 Definition of “Platform” and “Platform Operator”

2.1.1 Platform

Section 2 of the Act governing the information-reporting requirement of platform operators contains the definition of a platform. It is any software, including a website or a part thereof and applications, including mobile applications, accessible by users and allowing sellers to be connected to other users for the purpose of carrying out a relevant activity to such users directly or indirectly.

Typically, “software” above refers to a website or a part of a website that can facilitate carrying out a relevant activity. Typically, “mobile application” above refers to a software application run on a mobile device.

Example 1

The Finnish company “A Oy” has a website where sellers can offer their products for sale.

The website’s features make it coincide with the definition of “software or mobile application” stated in the Act governing the information-reporting requirement of platform operators. Accordingly, the website is a platform if on it a relevant activity such as sale of goods can be carried out and the terms and conditions of a commercial transaction can be formalized.

The term "platform" does not include software that exclusively allows any of the following:

  1. processing of payments in relation to relevant activity;
  2. users to list or advertise a relevant activity, or
  3. redirecting or transferring of users to a platform.

Example 2

The Finnish company “A Oy” has a website where sellers can advertise their products. Visitors to the website can make no purchases of goods; they can only get redirected to the sellers’ websites.

The website of A Oy is not a platform within the meaning of the Act governing the information-reporting requirement of platform operators because the site only redirects the user to the sellers’ websites.

Example 3

The Finnish company “A Oy” has a mobile application where buyers can send payments to the sellers for products they have bought. This mobile application does not enable users to place orders or make purchases – it only processes the payment.

These kinds of mobile applications do not coincide with the platform definition, found in the Act governing the information-reporting requirement of platform operators, because the mobile application only processes the payment to the seller.

Under the definitions in the Act governing the information-reporting requirement of platform operators, platform users mean sellers defined in the Law and other natural persons and legal persons, i.e. potential buyers, who can enter into a contract with sellers to buy a relevant activity against consideration.

The meaning of making a platform available is to give access to both the seller, and to a potential buyer, for using the features of the platform operator’s website or mobile application.  The access may be completely unrestricted, or it may be limited, i.e. access may only be given to a restricted group of users. Besides access, the digital platform must contain software features that allow sellers to be connected to other users for the purpose of carrying out, directly or indirectly, a relevant activity to such users.  No relevant activities can be carried out unless there is a prior mutual understanding between the seller and a user regarding the arrangement where the seller is to carry out the relevant activity to the user, as agreed upon, and against consideration.

Relevant activities may also be carried out through the intermediation of a platform indirectly.  When considering whether a relevant activity was carried out indirectly, identifying the party that bears the economic risk has great significange. 

The indirect sale is in question if the platform operator buys goods and services from a seller in order to fulfill the existing request of a buyer..

Example 4

The Finnish company “A Oy” has a platform where self-employed professionals – sellers – offer their expert services. A buyer can book an appointment on the platform and buy the expert service with a price that is listed on the platform. A buyer enters into a contract with A Oy for buying the expert service. A Oy executes the purchase order by transmitting and buying the service from the professional whom a buyer has chosen.

This activity meets the definition of indirect sale and a platform that offers this kind of service is a reporting platform operator according to the Act governing the information-reporting requirement of platform operators.

When defining a platform, it’s relevant that the platform operator’s business model is such that the platform has facilitated carrying out a relevant activity and the consideration paid for it is known or reasonably knowable by the platform operator. From this, it follows that it does not matter whether payments of consideration are facilitated via the platform.

For more information about consideration, see section 2.3. Consideration.

2.1.2 Platform Operator

Section 2 of the Act governing the information-reporting requirement of platform operators not only contains the definition of “platform” but also of a platform operator. “Platform operator” means an entity that contracts with sellers to make available all or part of a platform to the sellers.

“Entity” means a legal person or a legal arrangement, such as a corporation, partnership, trust or foundation. Accordingly, no natural person can be a platform operator.

Example 5

The Finnish company “A Oy” has a website where sellers can offer their goods for sale to other users of the site. 

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers are able to use the site for contacting other users in order to carry out a relevant activity, i.e. the selling of goods. Moreover, the company A Oy is a platform operator within the meaning of the Act, which has made the platform – in this case a website – available to sellers. 

Platforms are software programs or applications where sellers, who are independent and separate from the platform operator, can offer the carrying out of a relevant activity to other users. The platform operator and the seller must enter into an agreement concerning the platform’s availability to the seller. The selling of the platform operator’s own goods or services (where the platform operator itself is in the role of a seller) is outside of the Act’s scope of application, whereas indirect selling of the goods and services is still in the scope.

Example 6

A Finnish corporation has a mobile application where it advertises various motor vehicles and offers them for rent. The corporation owns the motor vehicles.

For purposes of the Act governing the information-reporting requirement of platform operators, the Finnish corporation is not a platform operator because it makes no agreements with outside sellers on the subject of making its platform available to such sellers. Instead, the corporation rents out its own fleet. There is no independent seller that would carry out a relevant activity.  

To match the definition of “platform operator”, there would have to be outside sellers who obtain registration on the platform, which, in turn, would be accessible by users and allow sellers to be connected to them, for the purpose of carrying out a relevant activity to them. 

Example 7

The Finnish company “A Oy” has a website where a selection of different goods are for sale to the users of the site. The site’s selection of goods additionally includes B Oy’s goods, which also are offered for sale to the users of the site. B Oy is a different company, independent and separate from A Oy. If one of the users of A Oy’s site buys an item that B Oy is selling, the contract is made between the buyer and the company B Oy, an outside seller. In this case, the company A Oy charges a commission.

The website’s software features make it coincide with the definition of “software or mobile application” found in the Act governing the information-reporting requirement of platform operators. Accordingly, the website is a platform where relevant activities can be carried out, like B Oy carrying out a sale of goods. In conclusion, A Oy is deemed a reporting platform operator, and it must register B Oy on the platform as a seller within the meaning of the Act governing the information-reporting requirement of platform operators.

2.1.3 Reporting Platform Operator, RPO

Under § 2 of the Act governing the information-reporting requirement of platform operators, “RPO” means an operator of a digital platform other than an “excluded platform operator”, on which any of the following conditions apply:

  • It is resident for tax purposes in an EU Member State;
  • it is incorporated under the laws of an EU Member State;
  • its place of management is an EU Member State, or
  • it has a permanent establishment in an EU Member State.

Example 8

The Finnish company “A Oy” runs a website for owners of real estate – sellers – who can offer residential premises for rent to the other users of the site. A Oy has a permanent establishment in Spain.

A Oy is an RPO in Finland because it is resident for tax purposes in Finland. Because of having a permanent establishment in Spain, A Oy is also an RPO in Spain.

Among RPOs are also companies outside the EU that run a digital platform where they help sellers resident in EU Member States to carry out relevant activities, or help sellers rent out immovable property located in an EU Member State. These companies must seek registration with a competent authority of an EU Member State in order to fulfil their information-reporting requirement in that Member State.  Additionally, for being considered an RPO, such a company from outside the EU cannot have the status of a Qualified Non-Union Platform Operator.

For more information about seeking registration with the selected Member State of single registration, see How to apply for registration as a Reporting Platform Operator in the EU – tax.fi

2.1.4 An RPO submitting reports to Finland

Under § 2 of the Act governing the information-reporting requirement of platform operators, an “RPO that submits reports to Finland” – Suomeen raportoiva alustaoperaattori is an operator of a digital platform that has the above-mentioned legal markers of a reporting platform operator and is obliged to report in Finland under the Act governing the information-reporting requirement of platform operators. Finnish national legislation contains a specific definition “RPO that submits reports to Finland”, because it is necessary to differentiate between other RPOs and those RPOs that especially have the information-reporting requirement in Finland. 

Primarily, an “RPO that submits reports to Finland” is a platform operator that fulfils any of the conditions listed below in Finland:

  • It is resident for tax purposes in Finland;
  • It is incorporated under the laws of Finland;
  • Its place of management is in Finland, or
  • it has a permanent establishment in Finland (and it is not a Qualified Non-Union Platform Operator)

In addition, the concept of RPO that submits reports to Finland encompasses an RPO that fulfils one of the conditions above not only in Finland but also in another EU Member State, regardless of its election of the Member State where the RPO complies with the information-reporting requirements laid down in the DAC7 Directive.

Moreover, a non-Union RPO is also deemed an RPO that submits reports to Finland after it has obtained registration with the Finnish Tax Administration, i.e. has completed its single registration this way.  For more information about the single registration, see section 6 Non-Union Platform Operators.

2.2 Relevant Activities

2.2.1 General remarks

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, “relevant activity” means an activity carried out for consideration and being any of the following:

  1. Rental of residential and commercial premises, parking spaces, and immovable property;
  2. Personal services;
  3. The selling of goods;
  4. Rental of any mode of transport.

It should be noted that by definition of the Act, no activity is a relevant activity unless it is carried out against consideration. The amount of the consideration must be known to the RPO or reasonably knowable by the RPO.

The relevant activity and the consideration are deemed reasonably knowable by the RPO when it is possible for the RPO to rely on its software system to verify the relevant activity’s completion and the consideration agreed between the parties.  Moreover, the relevant activity and the consideration are also deemed reasonably knowable by the RPO when the software system of a service provider – that the RPO has engaged the services of – can be accessed for ascertaining the relevant activity’s completion and the consideration agreed between the parties.

However, in accordance with § 2 of the Act governing the information-reporting requirement of platform operators, relevant activity does not include an activity carried out by a seller acting as an employee of the RPO or a related entity of the RPO. In this context, “employee” refers to a wage earner who is paid wages within the meaning of § 13.1 of the Prepayment Act.  

Example 9

Users can use “A Oy’s” platform for requesting lecturers to give a speech or lecture about various subjects. The individual lecturers who give the speeches and lectures are on A Oy’s payroll as employees, so A Oy pays them salaries. 

Because the lecturers are employees on A Oy’s, the platform operator’s, payroll, the activity is not deemed a relevant activity within the meaning of the Act. No annual information return of an RPO needs to be submitted.

Example 10

The company “A Oy” is a platform operator. The service on the platform is to promote and sell bookings of entertainer performances.  Through the platform’s functionalities, A Oy first collects the payments, and then passes them on to recipients. The individuals who produce the entertainment are not A Oy’s employees. Instead, A Oy pays the individual entertainers a nonwage compensation (often also called “trade income”) for each performance.

In light of the definition found in the Act, the above activities fall into the category of relevant activity. The company must submit annual information returns of an RPO.

2.2.2 Rental of residential and commercial premises, parking spaces, and immovable property

Among relevant activities is the renting out, fully or partially, of residential property, apartments, houses, etc., various commercial premises, parking spaces, and all kinds of immovable property. The duration of the rental is not relevant. Instead, what matters is the fact that consideration is paid. Not only the rental of residential and commercial premises, etc., but also hotel operation and providing other short-term accommodation are considered renting out and thus relevant activities.

How the rental property is owned or held does not matter. From this, it follows that subrental to subtenants is also a relevant activity to be reported on the annual information return. In the same way, various rental arrangements are relevant activities where, instead of direct ownership, the landlord’s/lessor’s holding rights to the premises are based on shareholding, based on an institutional holding, or corporate agreements and trusts, etc.

In the case of movable structures, movable houses and boats the purpose of use is relevant. If the purpose is residential – i.e. some type of accommodation – or if the purpose is commercial, and the rental contracts are facilitated via the platform, the legal markers of a relevant activity are present.

Example 11

The Finnish company “A Oy” is a platform operator. It has a website where natural persons and entities can offer their apartments, houses and other dwellings for rent under a short-term rental contract. It is required for sellers, or the landlords, to first obtain registration on the website. After it they can begin advertising and offering their dwellings to other users for rent. A Oy’s platform contains an electronic booking schedule, indicating price offers for different selections of rental periods. Users can confirm a booking on the website.

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers can use the site for contacting other users in order to rent out an apartment, house or other dwelling. In light of the definition laid down by the Act, company A Oy is a platform operator that has made its platform available to sellers. The business activity in question is the renting out of residential premises – a relevant activity. 

2.2.3 Personal Service

"Personal service" means a service involving time-based or task-based work performed by one or more individuals, acting either independently or on the behalf of an entity. After having been facilitated via a platform, personal services are carried out at the request of a user, either online or physically offline.

To be regarded as a personal service, there are two markers that must be present. Firstly, the consideration paid for the personal service must be based on time or based on the task carried out. Secondly, the service must be provided at the user’s request, i.e. it must be tailored at least to some extent according to the user´s preferences.  Examples of what is left outside of the Act’s scope of application include the giving of access to an existing online training course, or to an existing YouTube videoclip, etc. because these are created without prior request by a user. In the same way, taking place independently from any “request by a user”, a performance of a play in a theatre is outside of the scope of application of the Act governing the information-reporting requirement of platform operators. Another example of services outside the scope of application is a timetable-based transportation service: although there may be a digital platform where customers can buy tickets for a trainride or busride, to carry out this kind of transport is not a personal service.

Example 12

The company “A Oy” is a platform operator. The service is to book skilled workers for doing work, paid by the hour. The sellers using A Oy’s platform are independent contractors who offer a variety of professional work performances tailored as specified by the customer.

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers use the site for contacting other users in order to carry out a relevant activity. In light of the definition laid down by the Act, company A is a platform operator that has made its platform available to sellers.  The business activity in question is a personal service – a relevant activity.

Example 13

Advertisements of the “E Oy Experience Service” for guided hiking trips tailored in accordance with the client’s preferences appear on a Finnish platform operator’s, “A Oy’s” website.   The hiking trips are pre-planned and timed as the client has indicated. Through the intermediation of A Oy’s platform, a buyer comes forward and makes a reservation for a trip organised by E Oy Experience Service, for the price quoted on the platform. The hiking trip is tailored according to the buyer’s preferences.

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers can use the site for contacting other users to provide a personal service. In light of the definition laid down by the Act, company A is a platform operator that has made its platform available to sellers. The delivery of a service in the form of a tailored hiking trip is a personal service within the meaning of the Act governing the information-reporting requirement of platform operators.

Example 14

Advertisements of the “E Oy Experience Service” for guided walks around the high street of a town appear on the Finnish “A Oy’s” website.   The timetables, walk routes and the prices charged are indicated on A Oy’s website. Users can make a booking for a guided walk. Prices include the guide’s services, plus the equipment, accessories, and arrangements for a coffee break with coffee and buns.

The guided walks around town are not deemed a personal service referred to in the Act governing the information-reporting requirement of platform operators because they do not involve tailoring to accommodate user preferences.

2.2.4 Sales of goods

"Goods" means any tangible items and tangible property.

Example 15

The Finnish company “A Oy” has a website where sellers can offer their new or used items of clothing for sale.

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers are able to use the site for contacting other users to offer goods for sale. As a result, as stated in the Act, A Oy is deemed a platform operator that has made the platform available to sellers. The selling of clothes, facilitated via the platform operator’s platform is a relevant activity for which annual information returns must be submitted.

In light of the Act’s definition of “goods”, no items of intangible property, corporate securities or other securities, can be regarded as goods. An example of intangible property is the selling of energy rights.

2.2.5 Rental of any mode of transport

The meaning of “any mode of transport” covers all means of transportation, including those intended for passengers and those intended for goods transport. Accordingly, automobiles, motorcycles, boats, helicopters and bicycles are all included.

Example 16

The Finnish company “A Oy” is a platform operator. It has a website where car owners in all regions of Finland can offer their vehicle for rent.

The site is a platform within the meaning of the Act governing the information-reporting requirement of platform operators because sellers are able to use the site for contacting other users in order to rent out a mode of transport. As a result, as stated in the Act, A Oy is deemed a platform operator that has made the platform available to sellers. The renting out of modes of transport, facilitated via the platform operator’s platform is a relevant activity, for which annual information returns must be submitted. 

2.3 Consideration

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, “consideration” means compensation in any form, net of any fees, commissions or taxes withheld or charged by the RPO, that is paid or credited to a seller. The payment or crediting must have a connection with the relevant activity. The amount of the consideration has to be either known or reasonably knowable by the platform operator.

Payment of the consideration may take place simultaneously when the relevant activity is being carried out, or before or after it is carried out. The term “consideration” also covers the changing-of-hands of a compensation in any other form. In addition to a cash compensation, examples of consideration include a service provided to the seller, goods handed over, virtual-currency payments and other non-fiat-currency payments, which do not represent the legal tender currency of any sovereign state.

It is deemed that the consideration connected to the relevant activity is known or reasonably knowable by the RPO, for example when the RPO’s usual way to conduct business allows for making the amount visible and known, or gives easy access to knowledge of the amounts paid. The RPO knows the consideration  when, for example, the RPO facilitated the payments via its platform or where the RPO withholds commission or similar fees from the compensation paid in connection to the relevant activities.

It is not required that the platform operator knows the actual amount of the consideration that has been paid. The consideration is known or reasonably knowable by the platform operator even when it has the knowledge of the amount of the consideration agreed between the seller and the buyer. However, it is necessary for the platform operator to have the knowledge of the execution of the relevant activity.

No additional actions that would be unrelated to the RPO’s business operations are required of the RPO to find out the amount of the consideration. Instead, the RPO can submit its annual information return with the amounts known to the RPO. If payment of consideration is not facilitated via the RPO’s platform, it is deemed that the price quoted, advertised or agreed on the platform should be treated as the known price. There is no need for the RPO to ascertain whether the seller and the buyer have agreed upon discounts, rebates, changes, surcharges, etc.  

Example 17

The website belonging to an RPO contains a list of relevant activities (including advertisements of goods for sale and advertisements of modes of transport available for rent). The seller’s contact information and the relevant activity’s price appear on each advertisement.

By virtue of the platform’s intermediation, a buyer comes forward, entering into a contract with a seller. The buyer pays seller consideration through the platform.

The information return that the RPO will submit must indicate the amount of the consideration, which was agreed upon over the platform. Because consideration was paid to the seller through the platform’s intermediation, the RPO knows the amount of the consideration and will include it in its annual information return.

Example 18

The website belonging to an RPO contains a list of goods for sale. The seller’s contact information and the relevant activity’s price appear on each advertisement.

Through the intermediation of the platform, a buyer comes forward, entering into a contract with a seller, and the price paid for the good is the price quoted on the platform. Payment is effected outside of the platform.

In this case it is deemed that the amount of the consideration is reasonably knowable by the RPO. The RPO must submit the information return inclusive of the consideration, which had been agreed over the RPO’s platform; it is an amount deemed reasonably knowable by the RPO. However, the RPO is not expected to take specific measures to find out the exact price the buyer actually paid the seller. It is enough if the RPO just indicates the price quoted on the platform. 

Example 19

A private individual from Finland offers a mode of transport for rent, putting up an advertisement on the platform owned by an RPO. The platform has a booking schedule where the prices of different periods of rental appear. When making a booking and selecting a suitable rental period, the buyer simultaneously accepts the price. The buyer may later choose to buy additional services, which would be paid directly to the seller. As a result, the final price the buyer pays to the seller is often different from the price agreed over the platform.

In this case it is deemed that the RPO knows the consideration, so the RPO must submit its information return containing the above relevant activity and the consideration paid for it. The RPO can refer to the price that was reasonably knowable by the RPO, the price the buyer and the seller agreed upon when they used the platform’s booking schedule. However, the RPO is not expected to take any additional measures to find out the final price paid.

Example 20

The website of an RPO contains a list of goods for sale. The seller’s contact information and the price of an item for sale appear on each advertisement.

The buyer contacts the seller on the phone. The buyer and the seller make an agreement outside the platform. The buyer pays the consideration directly to the seller.

No reportable relevant activity takes place because the platform operator neither knows if the relevant activity has been carried out nor the amount of the consideration agreed between the parties.

It is also deemed that the RPO knows the consideration in situations where the consideration is known to a service provider whose services the RPO has engaged.

It is deemed that consideration was paid to the seller in connection with the relevant activity not only in situations of direct payment but also when the consideration is paid to a bank account of a third party, or when it is paid by someone else than the actual buyer of the goods or services. Consideration means compensation in the form of a net amount, i.e. any discounts, rebates, credits or refunds must be subtracted.

2.4 Seller

2.4.1 Seller

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, "seller" means a platform user, either an individual or an entity, that is registered on the platform and carries out a relevant activity. Sellers can carry out a relevant activity directly or indirectly.

Sellers may have become registered on the platform at any time during the reportable period or, if registration took place before the reportable period began, it must still be valid during the reportable period. “Registration” may refer to a platform feature that allows a seller to create a profile or account, or it may refer to some other form of contract between a seller and the RPO, aimed for making the platform available for carrying out a relevant activity.

In principle, the party to be given registration as a seller should be a natural person or an entity that offers a relevant activity for sale. This means that the meaning of “seller” does not refer to an individual who obtains registration on the behalf of a company, nor to an individual who is identified as the company’s contact person.

2.4.2 Active Sellers

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, "active seller" means any seller that either provides a relevant activity during the reportable period or is paid or credited consideration in connection with a relevant activity during the reportable period.

The definition of “active seller” affects the extent of the RPO’s due diligence procedure.

Example 21

An individual customer who lives in an EU Member State enters into a rental contract facilitated via a Finnish RPO’s platform, for renting a chalet for 2 weeks in February 2024. The booking is made in November 2023. According to the rental contract, consideration must be paid in February, no later than one week before the start of the booked rental. However, the individual customer prefers to deal with the payment in advance. Accordingly, the customer pays the consideration directly to the chalet’s owner already in November.

The owner is deemed an active seller for both years 2023 and 2024, because the consideration is paid in 2023 and the relevant activity is carried out in 2024.

2.4.3 Reportable Sellers

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, "reportable seller" means any active seller that is resident in an EU Member State, or an active seller that rented out residential premises, commercial premises, a parking space or immovable property located in an EU Member State.

2.5 Flowchart for identifying an RPO, a Reporting Platform Operator

This guide’s enclosure is a flowchart that illustrates the circumstances that make a Finnish company a reporting platform operator, liable to the information-reporting requirement.

Flowchart for identifying an RPO, a Reporting Platform Operator (pdf)

3 Due diligence procedures

3.1 General remarks

RPOs submitting reports to Finland must adhere to the procedures discussed in this section known as “due diligence”, in order to review and identify the sellers who use the RPO’s platform, and in order to collect seller information. These procedures ensure that the RPO collects and reports information concerning all reportable sellers, and that the reported information is correct, and that no excluded sellers’ information be included.

To satisfy the due diligence requirements, it is acceptable for an RPO that submits reports to Finland to engage the services of an outside service provider including another platform operator connected to the same platform. However, even if an outside party were given such an assignment, the responsibility for complying with the requirements would still lie with the RPO submitting reports to Finland. 

3.2 Collection of Seller information

In accordance with the provisions in § 3 of the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland must collect all of the following information for each seller that is not an excluded seller:

  1. first name and last name of a natural person, or the official registered name of an entity;
  2. the primary address;
  3. any TIN issued to the seller, including the names of each country of issuance;
  4. if the seller is a natural person, the date of birth;
  5. the seller’s VAT identification number, where available;
  6. if the seller is an entity, the business registration number;
  7. the existence of any permanent establishment of an entity through which relevant activities are carried out in the European Union, indicating each respective EU Member State where such a permanent establishment is located.

"Primary Address" means the address that is the primary residence of a seller who is an individual, as well as the address that is the registered office of a seller that is an entity. 

In accordance with item 3) above, an RPO must collect all the tax identification numbers issued to the seller and the names of the countries of issuance (including non-EU countries).  Alternative names of the tax identifier include the “TIN”, which means a Taxpayer Identification Number, issued by an EU Member State, or functional equivalent in the absence of a Taxpayer Identification Number. A Taxpayer Identification Number in Finland equals personal identity code for a natural person and a Business ID for an entity.

In accordance with item 5) above, “availability” of the VAT number refers to a situation where the RPO has access to the seller’s VAT number – the RPO may have recorded it in its archive, the RPO may ask the seller to give it, or the RPO can search it from the public registration data.

In accordance with item 6) above, the business registration number refers to a unique identifier that a public authority issues to entities for a purpose related to the entity’s conduct of business. In several countries, among them Finland, the business registration number is the same as the tax identification number.

However, an RPO that submits reports to Finland is not required to collect a seller’s TIN or business identification number, in reference to items 3) and 6) above, if no TIN or business identification number is issued to the seller in the seller’s country of tax residence, or if the seller’s country of tax residence imposes no requirement to collect the TIN. In that case, the RPO submitting reports to Finland must collect the seller’s birthplace if the seller is a natural person.

Examples of the above circumstances include a situation where the national legislation of a sovereign state would allow that its taxpayers only give out their TIN information on a voluntary basis – i.e. under no requirement – and the seller invokes the voluntariness defined by national law, thus refusing to provide the TIN. In this situation, the RPO would have to ascertain, by turning to publicly available sources of data, that no TIN is issued to the seller in the

seller’s country of tax residence. If it is necessary to turn to publicly available sources of data, the website of the tax-residence country’s fiscal authority can be useful; or the EU Commission’s TIN online check module, along with the portal site of the OECD, TAX IDENTIFICATION NUMBERS.

However, an RPO that submits reports to Finland is not required to collect a seller’s information listed in items 2), 3), 4), 5), 6) and 7) above, nor the birthplace information of a natural person stated above, when the RPO relies on direct confirmation of the identity and residence of the seller through an identification service made available by a Member State or the Union to ascertain the identity and tax residence of the seller. In this case, an RPO that submits reports to Finland must collect and store the unique identifier (i.e. GVS-identifier) issued by the identification service of the European Union or its Member State. If an RPO that submits reports to Finland is aware that the country of the seller’s primary address is different from the country of residence in the records of an identification service made available by a Member State or the Union, the RPO must invariably collect the seller’s information listed in items 2), 3), 4), 5), 6) and 7) above, for citing them in the annual information return the RPO will submit.

Example 22

Resident of the “A” EU Member State, “Y”, a natural person, uses the digital platform run by a Finnish RPO for offering their summer cottage for rent. The cottage is situated in Finland.

“Y” informs the RPO of “Y’s” unique identifier (GVS), which is issued by an identification service in their EU country of residence, in order to confirm their identity and place of residence.

From the perspective of the requirement to collect seller information, it is not necessary for the Finnish RPO to collect anything else besides Y’s first and last name. However, the RPO must collect the remaining items of information as provided in the Act governing the information-reporting requirement, and then proceed to include them in the annual information return to be submitted.

In the case of an RPO that submits reports to Finland, due diligence procedures and collection of information as provided in the Act must be carried out concerning the party being the true seller. This means that it is not enough if the RPO only collects information about e.g., sellers’ contact persons. If the individual person registered on the platform is a contact person or the like, the RPO having the information-reporting requirement must revert to collecting the required information of the party being the true seller.              

3.3 How to determine an Excluded Seller

The meaning of "excluded seller" is any seller whose information an RPO submitting reports to Finland needs not pass on to the Finnish Tax Administration.

In accordance with § 2 of the Act governing the information-reporting requirement of platform operators, exclusion is given to a seller

  1. that is a governmental entity;
  2. that is an entity the stock of which is regularly traded on an established securities market or a related entity of an entity the stock of which is regularly traded on an established securities market;
  3. that is an entity for which the platform operator facilitated more than 2,000 relevant activities by means of the rental of immovable property in respect of a property listing during the reportable period; or
  4. for which the platform operator facilitated less than 30 relevant activities by means of the sale of goods and for which the total amount of consideration paid or credited did not exceed €2,000 during the reportable period.

For purposes of the above, "governmental entity" means the government of any State or other jurisdiction, any political subdivision or other jurisdiction, which includes a federal state, province, county, or municipality, or any wholly owned agency or instrumentality of a State or other jurisdiction or of any one or more of the foregoing (each, a "governmental entity").

Above in point (b), an entity is “a related entity of another entity”, in accordance with § 2 of the Act governing the information-reporting requirement of platform operators, if either entity controls the other entity, or if the two entities are under common control.   For this purpose, control includes direct or indirect ownership of more than 50% of the vote and value in an entity. In indirect participation, the fulfilment of the requirement for the holding of more than 50 % of the right of ownership in the capital of the other entity shall be determined by multiplying the rates of holding through the successive tiers. A person holding more than 50% of the voting rights shall be deemed to hold 100%.

In point (c) above, "property listing" means, in accordance with § 2 of the Act governing the information-reporting requirement of platform operators, all immovable property units, such as residential and commercial premises and parking spaces, located at the same street address, owned by the same owner and offered for rent on a platform by the same seller. Examples of property listings include a hotel room, flat or apartment, building or a parking space being offered for rent on a platform. When rental contracts are made under circumstances described in point (c), to rent any single part of a property listing, such as a hotel room, is deemed a relevant activity in itself.

For example, if one individual were the owner of an entire apartment building (at the same street address), and they would offer apartments for rent, the building is deemed a single property listing although a large number of relevant activities may be carried out. 

On the other hand, if the apartments of the building were owned by many parties who would use a platform to offer their apartments for rent, the building is not a property listing by definition of the Act governing the information-reporting requirement of platform operators. 

The exclusion rule laid down in point (c) above relieves large hotel enterprises and other large-scale accommodation sectors from the information-reporting requirement.  The limit of 2,000 relevant activities in the form of rental of immovable property applies to one platform operator individually.

Example 23

A hotel enterprise in Finland offers its rooms on an outside platform operator’s website specialised in accommodation services. On the website several sellers – hotels, cottage owners and others – offer their properties for accommodation. Over the course of the reportable period, the Finnish hotel carried out 1,100 room bookings facilitated via the platform operator’s website.

The hotel also runs a website of its own, offering rooms, and the hotel is additionally using other websites that belong to other platform operators.

Because the quantity of bookings stays below 2,000 on the first platform operator’s site, the Finnish hotel is no excluded seller, so the platform operator must include it among the sellers indicated by the platform operator’s annual information return.

How many times the same property listing may have been booked or rented on the hotel’s own website or through the intermediation of other platforms is not relevant. 

The exclusion rule laid down in point (d) above relieves small sellers of goods from the information-reporting requirement.  They are deemed excluded sellers if the volume of sales during the reportable period is max. €2,000. It is additionally required that less than 30 relevant activities be carried out over the course of the reportable period.

Example 24

An individual is a user of the platform run by an RPO that submits reports to Finland. He advertises items of his clothing and household goods in order to sell them to other users. Over the course of one calendar year, he makes 20 sales and receives the total of €1,100 for consideration.

The individual is deemed an excluded seller in accordance with the provisions of the Act governing the information-reporting requirement, and the RPO does not have to include this individual’s information in the annual return to be submitted to the Tax Administration.

Example 25

Next year, the individual in Example 24, being encouraged by his success with the selling the previous year, puts up many more clothes and household goods for sale on the RPO’s platform. He makes 35 sales and receives €1,900 over the course of the year.

At year end, the RPO must include the individual’s information in the RPO’s annual return because now, the seller no longer satisfies the requirements of an excluded seller.

In accordance with § 4 of the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland may rely on publicly available information, or on a seller’s statement, in order to determine whether the seller that is an entity qualifies as an excluded seller described in points (a) — a governmental entity, and (b) — a stock-exchange-listed company. 

Further, in accordance with § 4 of the Act, an RPO that submits reports to Finland may rely on its available records in order to determine whether a seller qualifies as an excluded seller described in points (c) and (d) above. In this context, “available records (of the RPO)” means the facts, knowledge and information that the RPO has obtained in the course of conducting business. RPOs must determine in respect of every reportable period whether a seller is an excluded seller, i.e. every reportable period is separately evaluated.  Accordingly, whether thresholds are reached or not reached, and whether other legal markers are present, must be ascertained by reference to the relevant activities carried out over the course of the entire reportable period, relying on the information that becomes available to the RPO at the reportable period’s end.

3.4 Collection of information on rented immovables including residential, commercial, and parking space property

In accordance with § 5 of the Act governing the information-reporting requirement of platform operators, where a seller is engaged in relevant activity involving the rental of immovable property, the RPO submitting reports to Finland must collect the address of each property listing and, where issued, respective land registration number or its equivalent under the national law of the EU Member State where it is located. For immovable property located in Finland, the Finnish property identifier (kiinteistötunnus; fastighetsbeteckning) is the “land registration number or its equivalent”.  Data must be collected on all the rented-out property of the sellers as long as the contracts were facilitated via the RPO’s platform; the country where any property listing is located does not matter.

If by virtue of the intermediation on the platform of an RPO submitting reports to Finland, a seller has rented out a property listing more than 2,000 times during one reportable period, it is additionally required of the RPO to gather documentation to prove that the entire property listing is held by one single owner.

3.5 How to confirm accuracy of the collected information on rented immovables including residential, commercial, and parking space property

The provisions in § 6 of the Act governing the information-reporting requirement of platform operators lay down an obligation for an RPO submitting reports to Finland to ascertain that the collected information is accurate. Primarily, there is the need to make sure that sellers are determined and identified correctly, in reference to the provisions of § 3 and § 4 of the Act governing the information-reporting requirement of platform operators. In addition, accuracy of the collected information and identifications concerning rented-out immovable property, including residential, commercial, and parking spaces referred to in § 5 of the Act governing the information-reporting requirement of platform operators, must be verified.

RPOs submitting reports to Finland must utilize all the facts and information stored in the documents of their archives to confirm the accuracy of collected information. This means that the RPOs are required to use all their archived information regardless of its format, i.e. electronically searchable data, various facts and information in computer files, stored in a paper archive, and geographical location-based information.  An example of the categories of information that are available in the RPO’s archive is the Anti-Money Laundering/Know Your Customer information collected of the seller, as well as other information collected in order to meet some other legal requirements that apply to the platform. Correspondingly, the facts and information concerning the seller that serve the purpose of effecting a payment to the seller, or serve another business-related purpose, are deemed available in the RPO’s archive.

To confirm the accuracy of identification information, among other things, an RPO submitting reports to Finland must make comparisons to detect any variations, for example in the seller’s name, which may be present in the different items of documentation of the RPO. The reliability and accuracy of the seller’s address and tax identification number are often verifiable by looking into the transaction records that the carrying out of a relevant activity has generated. For example, if the seller typically conducts relevant activities – such as transportation services and household services – requiring the seller’s physical presence at known locations, the RPO submitting reports to Finland can easily rely on geolocation data to verify physical presence. In the same way, it is appropriate to take notice of other observations pointing to the seller’s country of residence, such as constant vs. intermittent use of a telephone number, or constant vs. intermittent communications via an IP address. In addition, the RPOs that submit reports to Finland are expected to obtain proof of reported TINs and VAT numbers by checking them, i.e. to turn to the electronically provided interfaces available in the European Union free-of-charge. The EU Commission’s TIN online check module is available for confirming whether the structure of a natural person’s TIN is valid, in respect of types and numbers of characters. The electronically provided interface for VAT number checking is: VIES VAT number validation: Check any VAT identification number

Example 26

When completing the registration form for a platform, a seller indicated that its primary address is a street address situated in Finland. However, it is known to the RPO that the seller only conducts its business operation in Sweden, as indicated by transaction records and geolocation data, all available to the RPO.

In these circumstances the address information indicated by the seller must be considered inaccurate.

If RPOs that submit reports to Finland were to detect inaccuracy in the infor­mation they have collected concerning a seller, they would have to collect new documents or facts and information to replace the old ones (for new sellers and older sellers alike). Under the circumstances, it is enough if the RPO turns to the seller and obtains a reliable statement from the seller demonstrating that although some discrepancy was detected, the collected seller information is still accurate.  For example, the seller information would no longer be reliable if an RPO reporting to Finland notices that the seller´s bank account transactions seem to point toward a new, changed country of tax residence (of a seller). In compliance with the main rule above, the fact of collecting new documents and information causes the necessity for the RPO to also re-confirm the accuracy of its older sellers’ information. The meaning of “older sellers” is the RPO’s sellers that already had registration on the RPO’s platform, either before the Act governing the information-reporting requirement of platform operators came into force, or before the entity became an RPO.

Additionally, an RPO submitting reports to Finland has to verify the accuracy of their seller information at the request of the Tax Administration. If the Tax Administration sends a request to an RPO, prompting the RPO to go over the seller information in order to confirm its accuracy, the RPO has reason to believe that an item of collected data concerning its sellers is probably incorrect. This could be the case if the Tax Administration received a feedback from another EU Member State because the fiscal authority of the other EU Member State were unable to match the seller information arriving from Finland with their taxpayer records.

If the RPO submitting reports to Finland cannot entirely confirm its seller information, it must either ask the seller to provide a documented account proving that its recorded information is correct – or ask the seller to make corrections to the records that contain errors, and to substantiate the corrections with documents sourced to independent third parties. For example, a personal identity card and a recently issued certificate of the seller’s tax residence are adequate for the above purpose.

Transitional provision

There is a transitional provision in force, concerning older sellers active on the platform.  If an RPO submitting reports to Finland needs to confirm the accuracy of the information it has collected on an older seller, it is enough if the RPO just refers to the documentation stored in the RPO’s archives that are electronically searchable. In other words, under the transitional provision it is deemed that the older seller’s information is adequately verified – by derogation from the main rule above – when the RPO goes over its searchable archived data.

3.6 Determining the Seller’s country of tax residence

In accordance with § 6 of the Act governing the information-reporting requirement of platform operators, the seller’s country of residence is the country of the seller’s primary address. If the seller’s country of residence is other than the country of the primary address, the country granting the TIN is also the seller’s country of residence. If the seller, as required in the Act, has delivered an RPO submitting reports to Finland the information concerning existence of a permanent establishment, the country where the permanent establishment is located is also the seller’s country of residence.

RPOs submitting reports to Finland can utilise an electronic identification service made available by a Member State or the Union when they collect seller information. If an electronic identification service or several electronic identification services confirm that one Member State is the seller’s country of residence, or that more than one Member States are the seller’s countries of residence, then this Member State or these Member States also count as the seller’s country(ies) of residence.

3.7 Timing and validity of due diligence procedures

During the reportable period, an RPO that submits reports to Finland must carry out a set of due diligence procedures as defined by § 8 of the Act governing the information-reporting requirement of platform operators. In general, it is necessary to carry out the procedures for every reporting period and every seller.

However, an RPO that submits reports to Finland may choose to rely on its due diligence work done during the preceding reporting periods. Firstly, this requires that the seller information required by the Act, including place of birth in the case of a natural person, must have been collected and its accuracy must have been confirmed over the course of the latest 36 months. Consequently, the RPO submitting reports to Finland must review the accuracy of its Seller information after the end of a 36-month period. Sufficient confirmation of the validity and accuracy is received if the seller provides the RPO a statement indicating that the information previously collected concerning the seller – such as the primary address – is still valid. Secondly, it is required that the RPO submitting reports to Finland does not have reason to believe that information collected concerning the seller, concerning an exclusion that would make the seller an excluded seller, and concerning rented-out immovable property such as residential property, business premises and parking spaces, are or have become unreliable or incorrect.

Transitional provisions

By derogation from the main rule above, transitional provisions apply on situations where a seller either had a registration on a platform at the time when the Act came into force, or had the registration before the entity became an RPO. In these circumstances: The RPO submitting reports to Finland must carry out its due diligence procedures with regard to the seller during the second reportable period. This provision gives more time for the RPO to deal with the due diligence procedures with regard to its “older” sellers active on its platform.

However, for all new sellers, i.e. those who obtain registration on the existing platform or on a new platform when the Act is in force, the main rule requires that the due diligence procedures be dealt with during the reporting period. For instance, for a seller registered on the platform during 2023, the RPO must carry out the required due diligence procedures by the end of the 2023 calendar year.

If under the transitional provisions, an RPO submitting reports to Finland has determined a seller as a reportable seller during 2023, the RPO must include the seller’s information in its 2023 information return although the transitional provisions give more time to the RPO for the due diligence procedures of its “older” sellers.

Example 27

A number of sellers have registrations on the platform of a Finnish platform operator. During 2022, the sellers offer a childcare service facilitated via the platform. During 2023, the sellers continue to offer a childcare service facilitated via the platform. Over the course of 2023, other sellers obtain registrations on the platform in order to offer a childcare service. 

It is required of the RPO to carry out due diligence during 2023 directed to the new sellers (with the new 2023 registrations on the platform), and to include the reportable sellers’ information in the RPO’s annual information return, the deadline of which is the end of January 2024.

It is required of the RPO to carry out due diligence by the end of 2024 with respect to the sellers that had registrations on the platform valid in 2022, and to include the information in the RPO’s annual information return, the deadline of which is in 2025. However, the RPO must include the reportable sellers’ information, also for the “older” sellers that the RPO has determined reportable sellers during 2023, in the RPO’s annual information return, the deadline of which is end of January 2024.

3.8 Applying the due diligence procedures on Active Sellers only

In accordance with § 9 of the Act governing the information-reporting requirement, an RPO that submits reports to Finland can limit its set of due diligence procedures only to active sellers. The RPO submitting reports to Finland is free to decide whether the due diligence procedures should extend to its sellers that are not active sellers.

4 Submitting the annual information return

4.1 Time and manner of reporting

In accordance with the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland must give the Tax Administration all the reportable seller’s information, along with information concerning the RPO itself, as are required by the provisions of the Act. Under the provisions of § 10 of the Act governing the information-reporting requirement of platform operators, the information must be submitted no later than by the end of the January in the year following the reportable period.

For instance, the annual information return containing the 2023 reportable period’s data must be submitted by 31 January 2024.

The meaning of “reportable period” is any calendar year when the platform operator is or has been deemed a reporting platform operator.

The information must be submitted on an annual return in XML-format via Ilmoitin.fi-service.

When the payment of the consideration takes place on a different year than the relevant activity is being carried out, the payment year is the reportable period for which an RPO needs to submit information of the consideration and the relevant activity. If the date of payment is unknown to the RPO, the year when the RPO must submit the annual information is the year when the relevant activity is carried out.

Example 28

An individual who lives in the EU Member State “A”, enters into a rental contract facilitated via an RPO’s platform, to rent a chalet in Finland for 2 weeks of at the end of February 2024. She signs the contract and confirms her booking in November 2023. She (the user of the platform) is one party to the contract and the chalet’s owner (the seller) is the other.  In accordance with the contract, consideration must be paid in the beginning of February, no later than 2 weeks before the start of the booked rental. The consideration is paid on the platform, meaning that the date of payment is known to the RPO. She decides to pay the entire amount as early as November 2023.

The RPO that submits reports to Finland must include the collected facts and information, as required by the Act, in the RPO’s annual information return for the 2023 calendar year, the reportable period when consideration was paid – and the deadline is 31 January 2024.  

Example 29

An individual who lives in the EU Member State “A”, enters into a rental contract facilitated via an RPO’s platform, to rent a chalet in Finland for 2 weeks of at the end of February 2024. She signs the contract and confirms her booking in November 2023. She (the user of the platform) is one party to the contract and the chalet’s owner (the seller) is the other. In accordance with the contract, the consideration must be paid in the beginning of February, no later than 2 weeks before the start of the booked rental. She proceeds to pay the consideration directly to the chalet’s owner in November 2023.

The RPO that submits reports to Finland must include the collected information in the RPO’s annual information return due 31 January 2025 because the date when consideration was paid is not known to the RPO, and because 2024 is the year when the relevant activity facilitated via the platform is carried out. 

4.2 Reportable information

In accordance with the provisions in § 11 of the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland must give all of the following information on its annual return:

  1. The name, address and TIN of the RPO submitting reports to Finland, and the names of the platforms for which the RPO will submit information;
  2. In the case of a Non-Union RPO that submits reports to Finland, the individual identification number, if the RPO is a Qualified Non-Union Platform Operator (see section 2, the defined terms);
  3. The seller information collected on reportable sellers
  4. The financial account identifier if available to the RPO;
  5. If different from the name of the reportable seller, in addition to the financial account identifier, the name and the identification information of the holder of the financial account to which the consideration is paid or credited, to the extent available to the RPO
  6. All the countries of tax residence of the reportable seller within the EU, as determined under the provisions of § 7 of the Act governing the information-reporting requirement of platform operators (see section 3.6, the country where the seller is resident for tax purposes)
  7. All the fees, commissions and taxes withheld or charged by the RPO during each quarter of the reportable period.
  8. The total consideration paid or credited during each quarter of the reportable period and the number of relevant activities – other than the rental of residential/commercial premises, parking spaces or immovable property – in respect of which it was paid or credited;
  9. For reportable sellers that rent out residential/commercial premises, parking spaces or immovable property:
    1. The address of each property listing and the Finnish property identifier (kiinteistötunnus; fastighetsbeteckning) or the land registration number or its equivalent issued by the EU Member State where the property is located, if available to the RPO;
    2. The total consideration paid or credited during each quarter of the reportable period and the number of relevant activities provided with respect to each property listing;
    3. Where available, the number of days each property listing was rented during the reportable period and the type of each property listing.

The "Financial Account Identifier” above in point “4.” means, in accordance with § 2 of the Act governing the information-reporting requirement of platform operators, the unique identifying number or reference available to the platform operator of the bank account, or other similar payment-services account, to which the consideration is paid or credited. The above definition has great significance for identifying the true beneficiary of the consideration.

Example 30

An RPO enters into an agreement with a seller that the seller can use the RPO’s platform to offer various modes of transport for rent. The RPO charges a fixed fee every year for making the platform available to the seller. For 2023, the seller is charged €150.00.

The rental contracts facilitated via the platform over the course of 2023 amount to €3,000.00 of considerations received by the seller. 

The RPO includes the total amount of consideration €3,000.00 – and also the €150.00 fee – in the RPO’s annual information return.

4.3 Reporting a Consideration

In accordance with the provisions in § 11 of the Act governing the information-reporting requirement of platform operators, the annual information return must contain the consideration in the currency in which it was paid or credited. If the consideration was paid or credited in a form other than usual fiat currency of a sovereign state, the RPO submitting reports to Finland must report the consideration in its euro equivalent, converted or valued in a consistent way.

If an in-kind consideration was agreed as payment to the seller in exchange for a relevant activity, the RPO must find out the fair market value of the goods or services given to the seller, in order to report the amount that reflects the consideration’s true value. There must be an evaluation of the goods/services’ fair market value based on a systematic approach. Documentation must be prepared to substantiate the comparisons of the goods/services with other goods, services and their value.

4.4 The RPO’s obligation to present data to the reportable seller

In accordance with the provisions in § 14 of the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland must present data to the reportable seller that concerns the seller itself, within the meaning of § 11, subsection 1, paragraphs 3 to 7; and further, of § 11, subsections 2 and 3 of the Act.  In other words, the RPO submitting reports to Finland must provide the seller with all the information that it submits to the Tax Administration, except its own business identification data.

The above data must be presented to the seller by the end of January of the year following the calendar year when the RPO determined the seller to be a reportable seller. Thus, the timetable is similar to the submitting of the annual return.

5 Exceptional circumstances of submitting the information

Chapter 3 of the Act governing the information-reporting requirement of platform operators contains detailed rules for submitting the annual information returns when more than one RPOs are under requirement to submit information concerning same platform (the rules aim for eliminating double reporting), and when the RPO’s information-reporting requirement extends to more than one EU Member State (i.e. an entity has an information-reporting requirement in several EU Member States).

If an RPO that submits reports to Finland meets the conditions of an RPO in one or more other EU Member States, the provisions of § 12 of the Act governing the information-reporting requirement of platform operators lay down an obligation for the RPO to elect a Member State in which it will fulfil its reporting requirements entirely.

Such a choice is permissible only if the RPO is a single legal person or entity, for which the legal markers of an RPO are present not only here but also in another EU Member State. An example of an RPO also having the markers of an RPO elsewhere is a company, incorporated under the laws of Finland, but having a permanent establishment in another EU Member State. The company in this example is a single legal person that – by virtue of having a permanent establishment in another EU Member State – would fully coincide with the definition of an RPO not only in Finland but also in that other Member State. 

If an RPO that submits reports to Finland elects Finland for its Member State in which to report, that RPO must fulfil all its reporting requirements here. It must provide annual information on the part of all its entities that fulfil the conditions of an RPO regardless of the EU Member States where such entities are situated or residing. Moreover, it must communicate to the competent authorities of the other EU Member States, where it also fulfils the conditions of an RPO, that it elects Finland for its Member State in which to report.

Example 31

The company “A Oy”, an RPO submitting reports to Finland, is incorporated under the laws of Finland. The company has permanent establishments in Sweden and Denmark; thus it meets the conditions of an RPO in these Member States as well.

Because “A Oy” is an RPO submitting reports to Finland and it simultaneously meets the conditions of an RPO in Finland, Sweden and Denmark, it has to choose one among these EU Member States, which will then become its Member State in which to report, fulfilling all its information-reporting requirements in that State.

Accordingly, “A Oy” elects Finland for the Member State in which to report.

It is necessary for “A Oy” to inform the Swedish and the Danish competent authorities of its election. The rules and guidelines in force in both these EU Member States must be followed when doing so.

Example 32

The company “A Oy”, an RPO submitting reports to Finland, is incorporated under the laws of Finland. Its Platform is for the rental of boats. Its subsidiary in Sweden is “S AB”, operating a platform for the rental of boats in Sweden and being an RPO in Sweden.

Because there are 2 different legal persons, the provisions of § 12 of the Act governing the information-reporting requirement of platform operators are not applicable. The company “A Oy” is an RPO submitting reports to Finland: it submits reports to Finland in order to fulfil its requirements. Correspondingly, “S AB” is an RPO submitting reports to Sweden and it must report to Sweden in order to fulfil its requirements.

If an RPO that submits reports to Finland chooses another EU Member State for reporting, it must submit an annual information return to Finland to inform the Finnish authorities of that choice. In addition, if the Tax Administration prompts such an RPO to provide proof that it has complied with all its reporting requirements in the other EU Member State, the RPO must send the proof.

5.3 Elimination of double reporting 

In accordance with § 13 of the Act governing the information-reporting requirement of platform operators, an RPO that submits reports to Finland is relieved from the requirement to provide the Finnish Tax Administration a reportable seller’s data in circumstances where another RPO, on which the information-reporting requirement is imposed with regard to equivalent data, already provided the data.

This would be the case when 2 or more RPOs, which are entities independent and separate from each other, both have the information-reporting requirement for equivalent data. The above procedure aims for elimination of double reporting. For example, if the conditions are fulfilled and if the RPO makes this choice, RPOs that submit reports to Finland have the option to refrain from giving reportable seller’s information, which basically must be submitted to the Finnish Tax Administration, when another RPO – either in Finland or in another EU Member State, as substantiated by evidence – already provided the information to the Finnish Tax Administration or to the other EU Member State´s fiscal authority.

The process outlined above can be elected on a voluntary basis and it has no impact on the responsibilities borne by the RPO that submits reports to Finland. Would any circumstances arise where reported information is incomplete or inaccurate, or where due diligence procedures are not complied with, the RPO that submits reports to Finland would be held accountable. On request by the Tax Administration, RPOs that submit reports to Finland must present documentation to prove that their reporting and their due diligence work complies with legal requirements.  In the same way, the process outlined above is no replacement of the requirement – imposed on RPOs that submit reports to Finland – to provide annual information in the form of a ‘nil’ return to indicate no relevant activities to report.

6 Special requirements

6.1 Requirements imposed on RPOs that submit reports to Finland if a seller delivers no identification data

In accordance with § 15 of the Act governing the information-reporting requirement of platform operators, if no information arrives from a seller, an RPO must send 2 reminders following the initial request for legally required identification data. Where a seller does not provide the information required, after two reminders following the initial request by the RPO, but not prior to the expiration of 60 days, the RPO must close the seller’s account and prevent the seller from re-registering on the platform or withhold the payment of the consideration to the seller as long as the seller does not provide the information requested. 

If after that, the RPO continues to be unable to obtain complete or remedied data – or a plausible explanation – the RPO must report the seller’s information to the Tax Administration to the extent of the information’s availability.   

6.2 Requirements imposed on RPOs to keep records of the steps undertaken and information relied upon

In accordance with § 16 of the Act governing the information-reporting requirement of platform operators, RPOs that submit reports to Finland must make records covering the steps undertaken and the data obtained in connection with the RPOs activities and measures of conducting its due diligence processes and of fulfilling its information-reporting requirement.  Such records must remain available for 6 years, as a minimum, following the end of the reportable period to which they relate. 

Accordingly, RPOs that submit reports to Finland must have documentation in storage concerning the due diligence procedures outlined in this guidance, so the documentation can be presented later if necessary, for 6 years following the reportable period to which the documentation relates. In the same way, if it were decided that a seller is not a reportable seller, or if it were decided that a business activity is not a relevant activity, it is required that the reasoning can be presented later if necessary, satisfying the conditions of due diligence. From this, it follows that in general, the RPOs must also retain the documents gathered, for purposes related to due diligence, for a seller account that was not subject to reporting for 6 years (after the end of the year when it was decided not to include the account in reporting). The similar six-year recordkeeping rule also concerns the source documentation from which the reportable facts must be collected.

6.3 A Platform Operator outside the EU

6.3.1 Non-Union platform operators’ obligation to register

If a Non-Union platform operator (see section Reporting Platform Operator, RPO) elects Finland for its Member State of single registration, the operator must seek registration with the Tax Administration to facilitate issuance of the individual identification number (IIN) when it commences its activity as a platform operator. For more information about seeking single registration with the selected Member State, see “Non-Union platform operator: How to apply for registration as a Reporting Platform Operator in the EU – tax.fi”

After a Non-Union platform operator elects Finland for its Member State of single registration, the operator becomes an RPO submitting reports to Finland. Accordingly, all the responsibilities and obligations of the Finnish law – the Act governing the information-reporting requirement of platform operators – will apply.

6.3.2 International exchange of information and the reporting requirements of Non-Union Operators

If the EU Member State and the jurisdiction outside of the European Union have entered into sufficient agreements, and the corresponding mechanism for international exchange of information between them is in place, the Non-Union Platform Operators are relieved from the information-reporting requirement in the EU. The mechanism is designed to prevent equivalent information from being reported and transmitted more than once. More specifically, the Commission should, by means of implementing acts, determine whether information required to be exchanged pursuant to an agreement between the competent authorities of a Member State and a non-Union jurisdiction is equivalent to that specified in the DAC7 Directive.

6.3.3 Qualified Non-Union platform operators

In accordance with the provisions in § 2 of the Act governing the information-reporting requirement of platform operators, "qualified Non-Union platform operator" means a platform operator for which all relevant activities that it facilitates are also qualified relevant activities and that is resident for tax purposes in a qualified Non-Union jurisdiction or, where such platform operator does not have a residence for tax purposes in a qualified Non-Union jurisdiction, it fulfils any of the following conditions:

  1. It is incorporated under the laws of a qualified Non-Union jurisdiction; or
  2. It has its place of management in a qualified Non-Union jurisdiction.

In circumstances that involve platform operators that reside outside the EU, the above definition and conditions have great significance.

6.3.3.1 Qualified relevant activities

Under the provisions in § 2 of the Act governing the information-reporting requirement of platform operators, "qualified relevant activities" means any relevant activity covered by the automatic exchange pursuant to an Effective Qualifying Competent Authority Agreement.

The definition of a qualified relevant activity is significant in determining whether a platform operator that resides outside the EU should be deemed a qualified Non-Union platform operator. If the operator’s, resident of a non-EU country, platform facilitates the carrying out of other relevant activities than just qualified relevant activities, it fails to fulfil the conditions of a qualified Non-Union operator and is, instead, regarded as a reporting platform operator.

6.3.3.2 Qualified Non-Union jurisdictions

Under the provisions in § 2 of the Act governing the information-reporting requirement of platform operators, a "qualified Non-Union jurisdiction" means a non-Union jurisdiction that has in effect an Effective Qualifying Competent Authority Agreement with the competent authorities of all Member States which are identified as reportable jurisdictions in a list published by the non-Union jurisdiction. In circumstances that involve platform operators that reside in non-EU countries, the above definition and conditions have great significance.

6.3.3.3 The Effective Qualifying Competent Authority Agreement

Under the provisions in § 2 of the Act governing the information-reporting requirement of platform operators, an "Effective Qualifying Competent Authority Agreement" means an international agreement defined by the European Commission and signed between a competent authority of a Member State and a non-Union country or jurisdiction, for the exchange of information similar to the information within the meaning of the Directive ((EU) 2021/514) amending the DAC In circumstances that involve platform operators that reside in non-EU countries, the above definition and conditions have great significance.

6.4 The requirement imposed on Excluded Platform Operators to submit affirmations

Under the provisions in § 2 of the Act governing the information-reporting requirement of platform operators, an “excluded platform operator" means a platform operator that, in respect of its business model, submits a statement to the Tax Administration, upfront and on an annual basis, affirming that no reportable sellers use its platform, i.e. it only has excluded sellers or Non-Union sellers that have not rented out immovable property located in the EU via the platform.

An example of an excluded platform operator is a platform operator that only makes its platform available to the excluded sellers such as governmental entities or stock-exchange-listed corporations.

As required under the provisions in § 18 of the Act governing the information-reporting requirement of platform operators, an excluded platform operator must submit a statement to the Tax Administration, upfront and on an annual basis, so as to demonstrate and affirm that the platform’s entire business model is such that it does not have reportable sellers.  The demonstration must be submitted upfront, i.e. before the end of a reportable period. For example, for the 2023 reportable period, the deadline for submittal is 31.12.2023.  In addition, the excluded platform operator must reconfirm on an annual basis that its demonstration is still valid. The statement can be written in free text. As required by the Act, it must contain the operator’s identification data and a description of the business model that sufficiently demonstrates that it does not have reportable sellers that are defined in §2, subsection 1, paragraph 15 of the Act.

The above procedure is optional. The Tax Administration will provide a separate guidance on how to submit a statement of an excluded platform operator in vero.fi. As an alternative to the above, the platform operator can provide annual information in the form of a ‘nil’ return to indicate no relevant activities to report.

Example 33

The company “B Oy” is a listed company. It has put up a website, which is available to other listed companies that belong to B Oy’s enterprise group. The other listed companies use the platform and offer their metal industry products for sale. No availability is granted to other sellers.

Under the Act governing the information-reporting requirement of platform operators, “B Oy” is an excluded platform operator because it only makes its platform available to listed companies, i.e. excluded sellers. It can choose between the 2 alternative options to either submit an upfront demonstration that it is an excluded platform operator on an annual basis or to submit annual information to the Tax Administration in the form of a ‘nil’ return to indicate no relevant activities to report.

Alternatively, the platform operator may choose to demonstrate that it is an excluded platform operator even before the beginning of a reportable period, if it is able to demonstrate that it cannot have any reportable sellers on account of its business model. This demonstration will release the excluded platform operator from following the due diligence procedures. However, at the request of the Tax Administration, it must be able to demonstrate that it did not have any reportable sellers.

7 Obligation concerning sellers to provide accurate information

RPOs that submit reports to Finland have a statutory obligation to identify the sellers on their platforms, and then collect the required seller information and information on the relevant activities they carry out. In order to do this, the RPOs not only utilize all the facts and information they already have in their archives but may also ask the seller to give further details. Sellers must provide the needed information and confirm its accuracy. In addition to providing the platform operator with the needed information, sellers must declare on their individual tax returns any income they receive in connection with the relevant activities. Providing incomplete or incorrect information for one’s taxation may lead to punitive tax increase and other administrative consequences. If incomplete or incorrect information is submitted with the intention to avoid taxes, it may result in criminal prosecution (tax fraud).

When the information collected and provided by the RPO to the fiscal authority is related to a country other than Finland, the Tax Administration will pass it on, following the procedure set out by law, to the seller’s country of tax residence and/or the country where immovable property is located in situations where the seller has received rental income. If the seller information is incomplete or inaccurate, the international exchange of information could be delivered to a wrong country, or the data sent could be inaccurate.

8 Administrative procedures to verify compliance of RPOs with the due diligence procedures and information-reporting requirements

The EU Directive on administrative cooperation relating to digital platforms lays down provisions on Member States’ duty to oversee (the competent authority in Finland is the Tax Administration) compliance with the information-reporting requirement and due diligence procedures. The requirement to verify compliance is also included in § 1 of the Finnish Implementing Act on Directive 2021/514 (DAC7) and in provisions of § 2 of the Act on Tax Administration.  In practice, the Tax Administration verifies compliance with the above-mentioned requirements by conducting tax audits and by controlling the accuracy of the information provided on annual returns.

On request of the Tax Administration, RPOs submitting reports to Finland must give further details necessary for the Tax Administration to carry out its statutory administrative mission (§ 19, Act on assessment procedure). RPOs submitting reports to Finland must additionally present all documents (§ 14 and § 23, Act on assessment procedure; § 3, Decree on Assessment Procedure) that are needed in order to verify accuracy of the RPO’s procedures and reporting. It is required of RPOs submitting reports to Finland that they provide information to the Tax Administration notwithstanding confidentiality rules and other restrictions that may concern the provision of information (§ 22, Act on assessment procedure).

9 Neglect of the reporting and due diligence requirements

The negligence penalty charge under § 22a of the Act on assessment procedure can be imposed if the RPO’s requirement to submit an annual information return is neglected or the if the requirements related to due diligence procedures are neglected.

Under § 26, subsection 2 of the Act on tax prepayments (Ennakkoperintälaki), the Tax Administration may deny entry into the prepayment register or remove from the register any party who substantially neglects their obligation to pay taxes, report tax information, keep accounting records, or other tax obligations.

                    

Page last updated 8/2/2023