iDenfy raises awareness regarding the new DAC7 reporting obligations


iDenfy, the Lithuania-based RegTech providing identity verification and fraud prevention services, has teamed up with the State Tax Inspectorate (STI) of Lithuania to provide clear guidelines on the EU’s Council Directive 2021/514 (DAC7) and help online platform operators to learn about the new obligation to collect, verify and report their data annually to tax authorities.

As digital platforms grow in popularity, so do the challenges associated with ensuring security and compliance. To address security issues and minimise challenges related to ever-evolving compliance regulations, iDenfy, an identity verification company, has presented an improved all-in-one hub of AI-powered compliance tools designed to help online platforms ensure security and compliance with DAC7 without hassle.

According to iDenfy, regulators behind DAC7 aim to standardize reporting requirements across the EU, particularly for online platforms. Under the directive, any provider of an online platform that enables sellers to connect with other users to carry out a ‘relevant activity’ must begin collecting transactions and other data related to those users. iDenfy further explains that this encompasses various activities, including digital platforms like food delivery apps or car rentals.

According to iDenfy, the new regulation, which came into effect on January 1st, 2023, has generated concerns regarding compliance and the impact of DAC7 on its partners. Officials from iDenfy have explained that this is a typical reaction, given that the regulation applies to numerous platforms, including those with unconventional transactions, such as e-money and crypto-assets. It’s important to mention that even if a company is not based in the EU, they still have to comply with the reporting obligation if they operate in or have sellers in EU member states. 

To minimise the uncertainty regarding the new data reporting obligations, iDenfy collaborated with Lithuania’s STI and prepared a dedicated DAC7 FAQ section for companies under the Directive. The STI claims that digital platform operators can use third-party service providers such as iDenfy to validate and prepare the collected information for reporting.

In response, iDenfy emphasises that obliged marketplaces must not overlook the importance of due diligence when collecting information to comply with DAC7. According to the startup, it is essential to verify the data collected, and for this reason, iDenfy has modified its compliance tool suite to assist businesses in meeting DAC7 requirements. 

According to RegTech, its ID Verification, Address Verification, or Business Verification tools can be customised and implemented to help businesses automatically collect, verify and report data regarding DAC7. 

"Our mission is to provide businesses with the tools they need to protect their customers and ensure compliance without adding unnecessary complexity," said iDenfy’s CEO, Domantas Ciulde. "Our team is proud to offer a digital hub of AI-powered compliance tools, and we believe they will help businesses stay secure and compliant in this increasingly digital world."

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