The Danish Government has widened the Tax Authorities’ information collection powers, by enabling it to be able to request payment information in connection with foreign suppliers who supply goods via distance selling or supply electronic services to private individuals in Denmark. The law was accepted by parliament the 21 December 2015 and is in force as of 1 January 2016.

The intention behind the law is to protect the Danish VAT tax base and ensure that Danish companies are able to compete on pricing with their foreign counterparts and to minimise VAT leakage.

In order to ensure that a more systematic approach is applied to the Tax Authorities’ inquiries, the new law authorises the Tax Authorities to request information from providers of payment solutions (e.g. credit card companies, banks etc). The information requested from the payment service provider includes the total amount received by the foreign supplier in relation to distance sales or electronic services supplied 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. The Danish Tax Authorities have just announced that they are going to prioritise resources on minimising the VAT-gap.

• Suppliers engaged in distance selling and supplying electronic services to Danish private customers, who are not currently VAT registered, should review their VAT position closely.
• Foreign suppliers should consider registering for VAT as soon as possible and should determine whether a voluntary disclosure be made regarding historic periods.

In case of questions, please do contact me or my colleague Anders Strandet Jepsen (Partner PwC DK) at:
aje@pwc.dk or +45 3945 3381.

 

Image source: Katharina Wieland Müller / pixelio.de