TORONTO, June 20, 2023--(BUSINESS WIRE)--Trolley, the payouts platform for the internet economy, is pleased to announce a major expansion of its Tax product, now allowing online marketplaces across the globe to pay out and report on payments to European sellers in full compliance with the EU’s stringent DAC7 reporting obligations.
For online marketplaces with hundreds or thousands of non-employee sellers, complying with global tax regulations can be challenging at scale, difficult to do manually, and may slow down business growth. With this new multi-jurisdiction solution for the EU’s DAC7 regulations, Trolley is automating the whole process, offering an end-to-end DAC7 Compliance product that works regardless of which of the 27 EU member states is being used for reporting purposes.
Key features of the new product include:
A self-serve, white-label onboarding experience that collects all information required by the DAC7 rules & cuts down on manual processes;
Income type payment tagging supporting for all four "activities" reportable under DAC7: provision of services, selling of goods, sales of means of transportation, and rental of immovable property;
Automatic tax and payment record management throughout the year; and,
Automated production of authority-ready XML files at the end of the year for the tax authority in the reporting country of the merchant’s choice.
Together with Trolley’s current US IRS Compliance product, customers who leverage the DAC7 product will have peace of mind knowing that they are compliant in even more countries — all from one platform, and without needing to make use of a third-party provider.
A Challenging New Set of Rules for the Gig Economy
Navigating the scope of various tax rules can be a complex process for businesses that operate online, but it’s crucial for digital platforms to understand and keep up with their tax obligations, especially with the new DAC7 regulations reportable for the first time on Jan 31, 2024.
"Understanding tax laws can be challenging to begin with, and DAC7 is no exception. While regulations like these help governments fight against tax fraud and evasion, they also help sellers to better comply with their own tax obligations," says Tax Subject Matter Expert Jessalyn Dean, CPA. "Online retailers need to keep these complex rules in mind at each stage of the seller journey to help balance the needs of the government and the needs of the seller. It’s important for marketplaces to think about DAC7 not just as a regulatory obligation, but as a potential benefit for your sellers."
How Trolley's DAC7 Product Helps Marketplaces with Global Ambitions
For online marketplaces based in the EU or paying sellers in the EU, DAC7 reporting requirements will be compulsory starting in 2024, which means that companies need to start collecting data ASAP.
"We’ve had conversations with accounting, tax and operations teams about how they’re going to solve the challenges of DAC7," says Barnett Klane, VP Product at Trolley. "It was a no-brainer for us; we needed to help platforms working with sellers in the EU address the challenges of scaling their complex global payouts and generate compliant end-of-year tax reporting. This new turnkey solution simplifies and automates the entire DAC7 workflow."
The EU is one of the first groups of countries to adopt tax rules specifically targeted at online marketplaces, but others, like the UK and Canada, will be following suit. The Trolley team is already anticipating the future needs of even more jurisdictions, and ready to adapt their Tax product to meet those requirements.
For more information, visit trolley.com/tax/dac7-compliance/
Trolley is building the payouts platform for the internet economy. With a fully customizable payout management platform and robust IRS (1099/1042-S) & DAC7 compliant tax reporting suite, Trolley allows companies to make and manage payments to recipients in 210+ countries and territories. Trolley is quickly becoming the payouts platform of choice for businesses that need to pay creators, musicians, artists, freelancers, vendors, on-demand workers, or any other supplier. More information is available at trolley.com.
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