The National Tax Court’s decisions published as SKM2022.113.LSR and SKM2022.118.LSR give rise to a clarification of the Tax Agency’s practice on VAT on the sale of land with buildings destined for demolition. SKM2022.118.LSRalso implies a recognition of previous practice with regard to the importance of local plans for the assessment of whether a given transaction must be considered a VAT-liable supply of a building plot or a VAT-exempt supply of an ‘old’ building with associated land. A series of inquiries to the Tax Agency and two other national tax law decisions from 2021 and 2022 regarding the delivery of plots with cast foundations, which have been brought before the courts by the Ministry of Taxation, give rise to comments by the Tax Agency about the agency’s perception of the concept of building for VAT purposes. Furthermore, the control signal clarifies the criteria for what constitutes a “building” with associated land or the supply of a “building site” in terms of VAT, including in light of the EU Court’s judgment of 30 September 2021 in case C-299/20, Icade Promotion. The Tax Agency is changing practice with regard to the significance of entry into an insurance sum for a burnt-down building. Finally, the control signal contains remarks on certain parts of The legal guidance, sectionDA5.9.5 , on VAT liability for the delivery of building plots.
Source: skat.dk
