DAC7/MRDP

Equivalence mechanism applying to non-union platform operators

The reporting obligations of platform operators may be relieved where they are based in a jurisdiction implementing the Model Reporting Rules for Digital Platform Operators (MRDPs). This is referred to as the 'Switch-off mechanism'.

The switch-off mechanism applies when the European Commission has deemed an MRDP jurisdiction’s implementing legislation to be fully, or partially, equivalent with DAC7. Platform operators can file MRDP returns to their local tax administration and information will be exchanged with partner jurisdictions.

A partial switch-off may apply, meaning that the foreign platform operator still has an obligation to report on Europeam Union (EU) sellers under DAC7. 

  • Example

    Platform ABC is based in the United Kingdom (UK), and is registered and files DAC7 returns as a foreign platform operator in Ireland. Once the UK implements the MRDP, Platform ABC files with His Majesty's Revenue and Customs (HMRC) for reportable sellers in Member States that are partner jurisdictions with the UK.

    However, Platform ABC must still report to Revenue in respect of sellers which have not activated the MRDP agreement. Revenue will then exchange that information with the remaining Member States.

Article 8ac(7) of DAC7 sets out the process by which equivalence with the Directive may lead to:

  • the partial relieving of the reporting obligation for foreign platform operators
  • or
  • the full relieving of the reporting obligation for foreign platform operators.

The European Commission has also included the activation status by Member States of Section 7 of the MRDP agreement with non-union jurisdictions.

Non-union platform operators should keep up to date with the activation status of Member States in which they have reportable sellers.

Next: Information to be provided by sellers

Published: 31 August 2026 Print this page

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