Platform Tax Transparency Act in EU and what it means?

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I would like to open a discussion about Platform Tax Transparency Act in the EU which is now being implemented starting 1st of January. I didn’t really know about this at all before reading this on Cardmarket: Obligation to Report Users’ Revenue to the German BZSt - Cardmarket News

Basically, selling platforms will automatically inform tax authorities about your sales if you have over 30 sales with a platform, or if you have less than 30 sales but the value is over 2000 €. Which I don’t mind if the records are being passed up, but nobody really says what it actually means to private people selling low value used items.

What do you guys think this actually means for private people selling their cards on Cardmarket, or any kind of used product overall in any marketplace?

I’m extremely confused about this which is why I wanted to talk about it and get some clarity. Here in Finland you can sell used goods up to 5000 € of value annually without having to report about it and you don’t pay any taxes of your sales up to that value. But this EU rule is 30 sales or value of 2000 € at a selling platform for the information to be reported. So what if I have 31 sales in a year but every single sale is for cards worth of cents? Am I going to a) pay taxes for those sales or b) having to prove my national tax office that I haven’t made profit on these cards that I sell literally for cents?! or c) nothing happens because my sales are lower than the limit set by Finnish law. I read some Finnish goverment’s papers about this and the vibe I got from it is that this EU law is above our national law. But, they don’t clarify anywhere what it actually means when it comes to tax payment.

So I started selling on Cardmarket last year and since I started selling back in July I have 62 sales in total until today. Most of the cards that I sell are extremely low value bulk and I’ve listed most of my modern bulk for 0,02 €. I have less than 30 cards listed that are valued over 1 €. I joined mainly to get rid of some bulk. But now it seems like I’m going to get punished if dare to have over 30 low value sales. If the limit was actually just 2000 € it would be better because even if I combined all the cards I have listed on Cardmarket now the total value wouldn’t come up to that.

First EU made it difficult to buy stuff outside of the Union and now they want to make selling difficult even inside the Union. It’s ike they don’t want people to make any money.

Do you guys have any sort of understanding about this? I’ve been trying to make a lot of research about this topic without any sort of clarity. I’d appreciate some input so maybe I could understand better.

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I cannot speak to European law or the tax situation that you have in your country. However, I do not believe that this will affect you in a major way.

These two sentences appear key:

Also, this does not mean that private individuals with more than 30 sales or 2,000 € turnover are classified as a business.

As long as users are paying their taxes properly, this change will have no consequence for Cardmarket users.

So if you have 62 sales totaling 32 €, they will expect you to pay income taxes on the profit, but you will not be expected to file your taxes as a business. If you keep track of your expenses for sourcing the cards, shipping, etc., then your net profit will be minimal. And therefore your tax liability will be minimal.

If I had to guess, this rule was developed to capture the “big fish” who net 10,000 €+, not a “typical” seller who gets rid of bulk.

I hope that this helps.

Note: This is not financial advice. Please consult a licensed tax professional in your country/jurisdiction.

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It is like the tax laws are unclear on purpose. When I started selling stuff in the Netherlands, the tax law for collection profits was that there was not a limit on seperate items or total amount, as long as the original purchase was not meant to be profitable. And if the original purchase was meant to profit from, you would only pay taxes over the profit and not on the revenue.

I will just keep buying more than I am selling and hope I am in the clear…

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Lol, they are. The norwegian way of differentiating between tax-free hobby activities and commercial activities in the fucking law is literally “within a certain scope and a certain time frame.” That’s the actual wording. Thank god we’re not a part of the EU though.

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This is very inconvenient for those who want to look for the perfect card to grade. For example, when I was looking for a perfect Sylveon Vmax Alt Art to grade PSA, I succeeded only on the fourth attempt. Obviously I resold the other three copies, even for less than what I paid (shipping, cardmarket rate). Technically I “made” €210 from the three sales of Sylveon, but in fact I lost €30.

Then I didn’t understand if only those from Germany will pay these sales taxes or also the other EU members. Will Germany send this data to other EU countries?

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Yes - in Cardmarket’s case Germany will send the data to the countries where sellers are from

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At your scale you’ll be absolutely fine. If your under that 2k threshold they aren’t even reporting it.

99% of seller won’t be impacted at all as this hobby isn’t really profitable if you’re just ripping sealed and selling your doubles.
Those who sell with the intent of profit should have a business anyway and the only ‘‘group’’ left are the ones selling their old collections. In this case every country has different laws but here in Germany for example you’re allowed to sell goods(except homes and stocks) tax free if the purchase date is at least one year back.

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But it was 30 sales or 2k if I understand right… So if you have over 30 sales the value doesn’t matter, it will be reported. And if you have under 30 sales it will be reported if the value is over 2k. Right? Because the wording was 30 sales or 2k. Idk…

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Order confirmations is probably the best way. If they every call you send them a few thousand pages of those and you’ll be (hopefully) fine. Or they just estimate the amount you owe and the your done.

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So basically there may be a large number of users affected by consequences :sweat_smile:

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It will be sold whenever the money hits your account.

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These are from Finnish government:

"The presentation does not include direct obligations for sellers using the digital platform. A possible indirect impact on sellers would be the result of the due diligence obligations proposed for platform operators reporting to Finland, which would oblige platform operators reporting to Finland to collect identifying information about sellers.

The existing tax regulations would still apply to the sellers, including the regulations regarding the taxation of income as well as the reporting obligation regulations."

But then later on, they say:

“The reporting obligation of platform operators according to the DAC7 directive covers all kinds of sales of goods without delimiting any individual groups of goods or sellers. There is no national margin of maneuver for these in the directive. The absolute limit of 2000 euros for minor sales activities included in the proposed legislation comes from the directive and cannot be raised nationally to, for example, 5000 euros. When drafting the directive, privacy protection and the requirements of the data protection regulation have been taken into account. In the directive, the events that have not been deemed necessary for taxation are excluded from the reporting obligation regarding sales of goods. The sale of goods is basically subject to tax. The taxpayer must be able to demonstrate the amount of taxable income or loss from the sale or the fulfillment of the conditions for a possible tax exemption. With the help of the seller information obtained from the platform operators, the Tax Administration can ensure that the taxpayers comply with their reporting obligations, that the declared amount of taxable income is correct or that the possible conditions for tax exemption are met. The tax exemption of 5000 euros in the Income Tax Act is per taxpayer, not per platform.”

:melting_face: what

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Oh it was ‘‘or’’ I thought you had to hit both for it to go into effect. That makes more sense.
If you’re tax office should contact you because of this you have to prove that you didn’t make profit.

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Exactly. I would assume that the proportion of (lay) sellers who accurately report their sales income / profit is near 0%. So this change will increase that proportion dramatically. :upside_down_face:

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my 5 cents (non taxable…back off bureaucrats :alien:) …note I just give my thought, I am not professional seller or have experienced this type of situation, just some brainstorming points.

First it’s starting in January 2024

I understood that cardmarket is giving heads up on what will happen in 2024 and they will start collecting from 01.01.2023 onwards.

Second I think the EU directive is giving a legal frame to propagate sales information from one member state to another , I think it makes sense, as point it out in the original directive
It contribute to a functioning market and provide same playing field as professional seller that need to pay tax after all.

The Member States’ need for mutual assistance in the field of taxation is growing rapidly in a globalised era. There is a tremendous development of the mobility of taxpayers, of the number of cross-border transactions and of the internationalisation of financial instruments, which makes it difficult for Member States to assess taxes due properly. This increasing difficulty affects the functioning of taxation systems and entails double taxation, which itself incites tax fraud and tax evasion, while the powers of controls remain at national level. It thus jeopardises the functioning of the internal market.

Third , In anyone trading on cardmarket, one has to prepare to pay tax if the revenue are very high. Sellers registered as business, do pay tax, most likely are full time and know (or use an accountant) to lower their tax to a minimum through deduction, registering their losses.

→ I believe in your case, you have no intent to become a professional seller and If I understand correctly as long as you are under €5000 (Finnish taxation level) you have no tax to pay.
So make sure you track your sales and once you are close this 5000 level, take a break, stop selling and resume the year after…

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Unfortunately I’m seeing this thread way to late. I don’t think people realize how bad this Tax Transparency Act is for the hobby and the repercussions it will have very soon.

In terms of data integrity alone, I find it highly questionable that ebay will send information on what exactly the person in question sold (think about 18+ articles or anything you would want to be kept private) to a governmental institution.

What’s even worse is that ebay will report your information as soon as you generate over 2000€ in value per year or make more than 30 sales per year. We all know this hobby. We all know that these numbers are nothing to Pokemon collectors. Many single cards are worth more than 2000€, and 30 sales are a drop in the water when many collections consist of 1000s of cards.

This is important, because once you are reported to the taxation office, they will determine whether you qualify as a commercial seller. And if they say you are, you will not only have to pay a penalty fee for not registering a business, you will also have to pay taxes on all previous sales they have investigated retroactively. This could ruin people. Especially if you haven’t kept receipts of earlier purchases (because they demand you to verify the date and value of purchase of the cards, and if you can’t, they will automatically assume that you bought and sold the card within a 1-year period, which makes you liable to pay tax on the transaction). Now check for yourself how many cards you have and for how many of them you have an evidence of purchase.

The problem is also that they are intentionally vague about what qualifies as a business. But there have been precedents where as little as 15 trading card sales per year or making more than 2000€ in revenue per year is already enough to qualify. You can ask yourself if you want to go through the hassle of registering a business just to sell more than 15 cards per year.

Some of you might say that this is fair and overdue, and that there should be no private sellers in the medium to high-end sector of Pokemon TCG selling, but I disagree. The entire point of a collector’s hobby is not just collecting, but also trading and selling items, because transactions and interactions are what creates popularity. And this new law completely destroys a huge part of the supply on our most important online platforms. People just haven’t realized it yet because the first time that investigations will start is this month and so far none of the private sellers have felt any repercussions, many are not even aware of the storm that’s coming.

Personally, this is probably the nail in the coffin for me. I’m not very active here and a rather quiet collector, but I also have been active for some years and was fortunate enough to buy many cards when they were cheaper. Selling these cards after they increased in value was a valid strategy to finance higher-end cards to come closer to my grails. You can judge me for that, but I know I’m not the only one. But with the new law in effect, the dream is dead.

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It’s called DAC7, it’s an european directive to reduce vat frauds over the Union.

Speaking from Italy, from a tax accountant position, I totally feel you, people are getting Crazy about It.

Platforms sorta vomited it over the sellers in the past few months out of nowhere.

Basically platforms Will send your country tax authorities your data (personal and sellings).
Then it’s up to your country to see what to do.
If you’re doing It ok with your own country laws you’ll be fine.
It’s just a form to compile.

It’s not like that.
It’s just that.
Ahah I totally feel you even if I work with that shit.
It’s a mess (here). (And) I guess everywhere.

This is false.
Unless you’re doing something wrong, there’s nothing to be afraid of.
In Italy lots of people shit their pants because they’re selling in a professional way without a vat Number o a commercial license. That’s just their fault.

This is true, but… See above.

I feel you.
But depends if your country consider occasional sellings not to be professional (as Italy does), in which case you don’t have to get a license/vat Number and just let them tax your profits.

If you’re selling a bunch of cards (10/15) over a whole year, that’s not very professional.
It’s not a job that can take the bread on your table.

Speaking of my country, a lot o people think you don’t have to pay taxes on occasional sellings below the 2k set by the directive.
This is false. You have to even for less profits, the fact they don’t have interest in finding a minor fraud doesn’t mean you’re not a fraud, if they ever want to get you, they will and they’re in the right.

This is up to your country 's Law, as I said above.

Also, another example I’d like to make is about non-profit sellings.
If you can show your sellings were not aimed at making profits, then you’ll not be taxed (here).

Think about people selling their used car, or forniture. Here we don’t pay taxes on that.

So selling a used personal collection can be seen in this way, and not get taxed. Even if reported to the tax office.

Said that the best advice I can give you is to ask a local consultant about it.

I too saw the thread too late.
My bad.

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This is false.
Unless you’re doing something wrong, there’s nothing to be afraid of.

Nope. The people who determine whether you are doing something wrong are the people who are evaluating you. And they evaluate you by unclear definitions, so whether you get labeled a commercial seller is up to the tax officer. They might have some guidelines to pay attention to, but at the end it’s not any better than a PSA grader deciding whether the card is a PSA 8 or PSA 9.

If you’re selling a bunch of cards (10/15) over a whole year, that’s not very professional.
It’s not a job that can take the bread on your table.

What if each of the 15 cards was worth 3000€? There’s a reason why they want data from those who have more than 30 sales but also from those who made more than 2000€.

Speaking of my country, a lot o people think you don’t have to pay taxes on occasional sellings below the 2k set by the directive.
This is false. You have to even for less profits

I can’t speak for your country, but in Germany, you don’t have to pay taxes if you held the card for over one year. But: That only applies if you can prove that you held it for over one year, and if you are a private seller, not a commercial seller. If the tax office says that selling 15 cards in a year was already commercial because I made too much money doing so, they will simply classify me as a commercial seller, no matter how ridiculous it sounds to us. And then I have to pay taxes all of a sudden, for something I’m not.

If you can show your sellings were not aimed at making profits, then you’ll not be taxed (here).

Yes, but how could anyone prove that? When a sale generates a profit, that’s an objective fact. But whether that profit had been generated by accident or sheer luck, or whether the person intentionally tried to make a profit from buying and selling the item cannot be proven. This is especially important for collectors. How should a collector prove to the tax office that they sold a card for a profit because they just want to leave the hobby, not because they were hoping for value appreciation to make a profit?

I just know that this law will severely limit my activity in the hobby. If I can’t sell stuff anymore without having to pay heavy taxes, I also can’t finance new card purchases anymore.

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I don’t know about germany man, but as far as I know, starting an official business with a vat number and a licence (for commercial) is the way.
Then I understand the border between professional and non-professional isn’t easy, it’s something very subjective to say if your case is one or the other and that’s why I suggested you to hear a consultant which job is taking care of accounting, companies and taxes in general.

I still talk from my country’s perspective, which is not yours, sadly, but 15 sellings is still too less. Especially considering the real profit margin (revenue minus cost), think about a car dealership.

Depends on the card you’re selling. If the card is rough (not mint) the “used condition” of it might lead to the fact it’s something that have been used (and so something very old, held more than a year, even if it’s not you who held it).
Otherwhise a good idea would be re-tracking the buying orders, if you bought the cards online.

Another thing - last one - i’m going to say is to take into account jurisprudence.

Here in italy some vintage car collector was considered not a professional seller, even with a huge income from some car selling. Because for the judge it was just a “gesture of love from an amateur to increase the value and enjoyment of his collection”.
I know this may sound bullshit, but go check for some sentences of your country about that. You may find something to defend yourself.
And good luck!

Summary

totally off topic: now that I see your nickname it reminds me of someone…
You’ve never been on a italian pokemon forum like 14-15 years ago, were you?