DAC7 is a tax directive in the EU that came into effect on January 1, 2023 that requires digital platform operators – generally, platforms that enable the sales of goods and services by connecting sellers with buyers – to report certain information about their sellers to tax authorities. Additionally, this information is exchanged among other EU Member States.
Who is affected by these reporting obligations?
The EU and Canada’s tax reporting obligations apply to digital platform operators that are managed, incorporated, or permanently established in the EU or Canada. These reporting obligations also apply to digital platform operators that are not based in these countries, but operate or have buyers or sellers located there.
Under these reporting obligations, Grailed is required to report certain personal and transactional data of sellers who, in one calendar year, have made transactions over the following thresholds, depending on their country of residence:
- EU: EU sellers who, in one calendar year, have made 30 or more transactions or whose transactions exceed €2,000 in revenue, net of fees.
- Canada: Canadian sellers who, in one calendar year, have made 30 or more transactions or whose transactions exceed CAD 2,800 in revenue, net of fees.
Sellers in the EU and Canada with less than 30 transactions and whose transactions do not exceed the revenue threshold, net of fees, in one calendar year, are not subject to these reporting rules.
How are my sales calculated for reporting purposes?
For reporting purposes, your sales total will equal the amount received from your transactions. The following amounts are excluded from your sales’ calculation: any shipping amounts paid to Grailed, VAT collected and remitted by Grailed, VAT charged on fees, and any amounts deducted by Grailed for fees, or canceled or returned orders.
Is there any impact on my tax obligations?
The tax reporting obligations for Grailed do not impact nor change a seller’s personal tax obligations; however, sellers should be sure to monitor their transactions to comply with any relevant reporting obligations that may be required based on their total sales activity. Such reporting obligations only address whether Grailed must report certain personal and transactional data of its sellers to the relevant tax authorities.
Please note that Grailed is not a tax consultant and does not provide tax advice. For specific questions regarding your taxes, please reach out to your tax advisor or accountant.
What are the different tax reporting obligations in the EU and in Canada?
The EU abides by DAC7, which is a tax directive that came into effect on January 1, 2023 that requires digital platform operators – generally, platforms that enable the sales of goods and services by connecting sellers with buyers – to report certain information about their sellers to tax authorities. Additionally, this information is exchanged among other EU Member States.
In 2024, Canada implemented Reporting Rules for Digital Platform Operators, an equivalent tax directive to DAC7, for digital platform operators like Grailed to report certain seller information to the Canadian tax authority.
What information is reported for DAC7?
The information collected and shared with the relevant tax authorities (listed below) is dependent on whether you are an individual seller or a legal entity/business.
| Individual Sellers | Legal Entities/Businesses |
| First and Last Name | Business/Legal Entity Name |
| Primary Address | Primary Address |
| Member State Residence | Member State Residence |
| Date of Birth | Business Registration Number |
| Tax Identification Number (or Place of Birth if TIN is not available - EU only) | Tax Identification Number |
| VAT Identification Number (if applicable - EU only) | VAT Identification Number (EU only) |
| GST Number (if applicable - Canada only) | GST Number (Canada only) |
|
The total amount paid or credited to the seller, excluding fees paid to Grailed, any refunds or canceled orders, or VAT collected by Grailed. |
The total amount paid or credited to the seller, excluding fees paid to Grailed, any refunds or canceled orders, VAT collected by Grailed. |
| Total Number of Transactions | Total Number of Transactions |
| Total fees, commissions charged, and taxes withheld by Grailed. | Total fees, commissions charged, and taxes withheld by Grailed. |
| Bank account number where sales’ proceeds are paid. | Bank account number where sales’ proceeds are paid. |
As part of Grailed’s tax reporting obligations, Grailed is legally required to collect your Tax Identification Number (TIN) or place of birth if you are an individual and don't have a TIN. If you do not have a TIN, you may be able to apply for one by reaching out to your local tax authority or a tax professional.
Please note that your TIN is different from a VAT Identification Number. If you are required to provide a TIN and choose not to, your account may be subject to cashout freezes or restricted selling privileges.
How is my personal data being protected?
In order to comply with European and UK privacy legislation (such as the EU and UK GDPR), Grailed, as a digital platform operator, takes various measures to protect your personal data and to process your personal data in accordance with any applicable privacy laws. This includes, among other things, informing individual reportable sellers that their information will be collected and reported to the relevant authorities.
Additionally, we implement strict data security protocols including data encryption, limited access to personal data, and regular monitoring to prevent unauthorized data access or usage. We also ensure all data is processed in accordance with our Privacy Policy.
For questions regarding privacy, data protection, and the GDPR, please contact help@grailed.com.
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