Denmark: Tax authorities given wider powers to pursue remote vendors

February 19, 2016

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From 1 January 2016, the Danish Government has widened the tax authorities’ information collection powers by enabling them to request payment information in connection with foreign suppliers making distance sales of goods or supplies of electronic services to private individuals in Denmark. The tax authorities recently announced that they are going to prioritise resources on minimising the 'VAT-gap', therefore foreign suppliers making remote sales to Danish private customers who are not currently VAT registered, should review their VAT position as a matter of priority.

The intention behind the new law is to protect the Danish VAT tax base, minimise VAT leakage and ensure that Danish companies are able to compete on pricing with their foreign counterparts, and the tax authorities recently announced that they are going to prioritise resources on minimising the VAT-gap.

In order to ensure that a more systematic approach is applied to the tax authorities’ enquiries, the new law authorises the authorities to request information from providers of payment solutions (e.g. credit card companies, banks etc) including the total amount received by a remote vendor from sales made to private individuals in Denmark. The information received will help the tax authorities determine whether the foreign supplier has exceeded the distance selling threshold, for example, such that they should be registered for VAT in Denmark.

Foreign businesses making supplies to Danish consumers and who are not already registered should consider registering for VAT as soon as possible and also determine whether a voluntary disclosure should be made in respect of past periods.

For further information or assistance, please contact: 

Anders Strandet Jepsen

e: [email protected]

p : +45 3945 3381

 

Christine O'Malley

e: [email protected]

p: +44 (0)16 1245 2429