In this Danish case, the Danish tax authorities (SKAT) received information from the Dutch tax authorities that in 2015 a Danish tax payer, owning a car, acquired income totaling DKK 168,848 from the Dutch company Uber BV (hereinafter the company). The owner’s net profit (before payroll tax) was DKK 86,112.
This income was acquired through the transport of passengers in the owner’s own vehicle, through the company’s application service Uber (hereinafter the service). The holder drove a total of 1,517 trips in the period in question.
The complaint stemmed from the fact that the Tax Authority (SKAT) had imposed a VAT payment of DKK 8,442 on the complainant for received intermediary services with a reverse charge mechanism and a DKK 3,547 excise duty on passenger transport services.
SKAT was of the opinion that the owner conducted an independent economic activity, and therefore should charge VAT. The owner argued that the income from passenger transportation in its own vehicle through a Dutch company’s service, was a C2C service, and not subject to VAT.
The Court decided that the Dutch company provided an intermediary service to the owner, as the service facilitated contact between the owner and the passengers. The National Tax Tribunal found that the intermediary services had a place of supply in Denmark, since the passenger transport took place in Denmark. Consequently, the National Tax Tribunal determined that the owner should apply the reverse charge, as the Dutch company did not have a fixed place of business in Denmark.
The National Tax Tribunal noted that the owner provided a passenger transport service, but that Danish VAT should not be levied and paid via the service provided by the Dutch company.
In Denmark, passenger transport services are exempt from VAT. The owner should, however, pay payroll / income tax, if the threshold is passed.As the passenger transport is exempt from VAT, the owner could not deduct VAT on expenses incurred in order to deliver the transport, e.g. fuel, repairs and maintenance.
The National Tax Court thus finds that it is right that SKAT has ordered the holder to pay DKK 3,547 in payroll tax.
Source: info.skat.dk
