What is digital platform reporting / DAC 7 and why does it impact me?

The OECD (Organisation for Economic Co-operation and Development) has developed "Model Reporting Rules for Digital Platforms" to address the challenges of tax transparency in the growing digital economy. This has been adopted in a number of countries so far resulting in the new DAC7 requirements in the EU and Digital Platform Reporting in the UK.

Think of these regulations as a new set of rules designed to make sure everyone who earns money through online platforms like ours is playing fair when it comes to taxes. Basically, governments want to know about the income people make online, just like they do with traditional jobs. So, we're now required to report certain information about your earnings to the tax authorities. This helps ensure transparency and fairness across the board. It impacts you because, as a participant on our platform, you are counted as a seller and therefore your earnings are part of this reporting process.

What if I refuse to provide this information?

We understand that sharing certain types of personal information may be concerning. However, because this is a legal requirement, we unfortunately might have to restrict or even suspend your account until we receive the necessary information.

We are here to help you through the process, so please reach out if you have any concerns.

Do I have to pay tax on my Prolific earnings?

Whether you need to pay tax on your Prolific earnings depends on your individual circumstances and the tax laws in your country. This new reporting requirement does not in itself change the amount of tax you need to pay and it does not automatically mean that you owe tax.

We are legally obliged to provide the earnings information to the tax authorities, but we are unable to confirm the extent to which these payments are taxable in each participant’s jurisdiction. Our participants are responsible for checking these requirements and where appropriate participants are responsible for their own tax filings.

Do I still need to include these earnings on my tax return if Prolific has already reported them to the authorities?

The information Prolific reports helps the tax authorities understand income earned through online platforms. However, it does not remove your responsibility to file a tax return and declare all your income, including what you earned on Prolific, if required by your local tax rules and income limits. Please check the tax regulations in your country or speak to a tax advisor for clarification.

I am not in the UK or EU, why am I being included in this?

Even if you're outside the UK or EU, these new rules can still apply if you are a resident of a reportable jurisdiction.

Reportable jurisdictions are regularly changing but currently include Canada and New Zealand.

I only earn a small amount on the platform / I earn less than 2k EUR, why am I impacted?

Unfortunately the 2,000 EUR threshold often referenced in DAC7 / Digital Platform guidance refers only to the sale of goods online. There is no minimum reporting threshold for services transactions. The reporting rules therefore apply regardless of the amount you earn.

Where can I see what has been reported / where can I see how much I earned?

We will notify you of the information we have reported including the exact earnings by quarter.

I didn’t cash anything out in the tax year, will you still report any information on me?

We will be reporting earnings based on the approved responses in each quarter of the calendar year. i.e. at the point the money is available in your Prolific account. That is because these funds are held under trust and belong to you from that point in time so even if you chose not to cash them out, you have earned that money within the year.

What period are you reporting on and when?

We will be reporting on your earnings for the calendar year (January 1st to December 31st). The reporting typically happens in the following year by 31st January.

How will this information be stored and handled?

Your information will be stored safely and securely, and handled in accordance with our usual robust security measures and our data protection policies, which comply with applicable data protections laws. Please see our Participant Privacy Notice for further details.

If I delete my account, will this information still be reported?

Yes, even if you delete your account, we are still required to report this information for the periods you were active on the platform. This is because the reporting is based on your activity during the reporting period, regardless of your current account status.

My birthplace is in a different country to where I currently reside, which authority do you report my earnings to?

We report your earnings to the tax authority of your country of residence, not your country of birth. Your tax residency is the primary factor determining where your income is reported. Your birthplace is collected in place of a Tax Identification Number to ensure you are being correctly identified in the reporting.

My country of birth no longer exists, what information should I enter?

In this case, please enter the name of the country as it was at the time of your birth, e.g. Czechoslovakia.

What information do you share with the authorities?

We will share the information mandated by the regulations which is:

• Certain basic personal details (e.g. name, address, date of birth)
• Your birthplace and/or your personal Tax Identification Number (e.g. NI number, SSN, etc)
• Your Paypal cashout email address
• Your earnings on the platform by quarter

Is this a one-time request or an ongoing obligation?

This is an ongoing obligation. We are required to report your earnings annually. So, we will need to collect and report this information each year. We will keep you updated on any changes or requirements.

How long will you hold this information for?

We are required to hold the information we report to the relevant tax authority for a period of 5 years following the end of the reporting period. Please see our Participant Privacy Notice for further details about how long we keep personal data.

What happens if my information changes (e.g. change of address)?

It is important to maintain accurate and up-to-date information within your account. Should any of your details change - such as your address - please promptly update them through the account settings. This ensures compliance with reporting requirements to the relevant tax authorities. Our support team is available to assist with any difficulties encountered during this process

Who are the 'authorities' you are reporting to?

We are required to report your earnings and associated data to the tax authority of your jurisdiction of tax residence. For example, in the United Kingdom, this is HMRC. In other countries, the corresponding national tax authority will receive the reported information.

Will this information be shared with any third parties other than tax authorities?

We will not share any information about you which is specifically for tax reporting purposes with any third party other than the tax authorities to which we are legally obliged to provide this.

Will this affect my eligibility to participate in studies in the future?

As long as all necessary information is provided to us promptly on joining Prolific or once requested for pre-existing users, this regulation will have no impact on your ability to participate in studies and continue earning on the platform.

The information you provide for these purposes (such as your birthplace) will not be included in the “About you” section of your account or used to screen you in or out of studies.

Where can I find my National Insurance Number or Tax Identification Number?

You will find this number on various documents based on the issuing country. For example, this number can be found on payslips, letters about tax, pensions and benefits or through your personal tax account.

If you are based in the UK, you can find more information here: Find your national insurance number.

If you are EU based and can’t find your tax identification number, we recommend you contact your issuing countries’ tax authorities.

UK & EU country names for Tax Identification Number