- The document is a directive from the Danish Tax Agency (Skattestyrelsen) regarding VAT on the sale of plots with buildings intended for demolition.
- The directive is a response to two decisions by the National Tax Tribunal (Landsskatteretten) published as SKM2022.113.LSR and SKM2022.118.LSR.
- The directive clarifies the Tax Agency’s practice and rejects the previous practice regarding the significance of local plans for assessing whether a transaction is considered a VAT-liable delivery of a building plot or a VAT-exempt delivery of an ‘old’ building with associated land.
- The Tax Agency also comments on its understanding of the VAT concept of a building, in response to several inquiries and two other National Tax Tribunal decisions from 2021 and 2022 about the delivery of plots with cast foundations.
- The directive further specifies the criteria for what constitutes a “building” with associated land versus the delivery of a “building plot” in terms of VAT, including in light of the EU Court’s judgment of September 30, 2021 in case C-299/20, Icade Promotion.
- The Tax Agency changes its practice regarding the significance of entering an insurance sum for a burnt-down building.
- The directive also contains comments on certain parts of the Legal Guide, section D.A.5.9.5, on VAT liability for the delivery of building plots.
- The directive is based on the VAT Act (momsloven) and the VAT Announcement (momsbekendtgørelsen), and references sections of the Tax Administration Act (skatteforvaltningsloven) and the Legal Guide.
Source: info.skat.dk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
