The case concerned the extent to which a municipality was entitled to reimbursement of tax on electricity used in buildings in which activities subject to VAT took place. The National Tax Court found that the municipality carried out activities in the properties that were used for schools and clubs, which were regulated in the Primary Schools Act and the Day Care Act, and that the municipality therefore carried out activities in the said areas in its capacity as a public authority. As far as the properties that were used for labor market centers were concerned, the Landsskatteretten assumed that the municipality carried out activities which were regulated in the Service Act and the Act on active social policy, and that according to these laws the municipality was subject to a number of public law rules regarding the exercise of the activities in question. For these properties, the municipality therefore also carried out activities in its capacity as a public authority. The National Tax Court also found that an exemption from the VAT obligation for the municipality’s supplies could not be regarded as distorting competition, as supplies by private companies within the mentioned areas were exempt from VAT. The municipality therefore did not act in its capacity as a person liable for VAT when carrying out the activities, cf. section 3, subsection of the VAT Act. 2, no. 3, and the VAT system directive, article 13, subsection 1. It was therefore right that the Tax Agency, when calculating the reimbursement of electricity tax for the properties in question, had calculated the deduction percentage according to section 38, subsection of the VAT Act. 2. The National Tax Court then accepted the Tax Agency’s estimate of the municipality’s deduction percentage. that an exemption from VAT liability for the municipality’s supplies could not be regarded as distorting competition, as supplies by private companies within the mentioned areas were exempt from VAT. The municipality therefore did not act in its capacity as a person liable for VAT when carrying out the activities, cf. section 3, subsection of the VAT Act. 2, no. 3, and the VAT system directive, article 13, subsection 1. It was therefore right that the Tax Agency, when calculating the reimbursement of electricity tax for the properties in question, had calculated the deduction percentage according to section 38, subsection of the VAT Act. 2. The National Tax Court then accepted the Tax Agency’s estimate of the municipality’s deduction percentage. that an exemption from VAT liability for the municipality’s supplies could not be regarded as distorting competition, as supplies by private companies within the mentioned areas were exempt from VAT. The municipality therefore did not act in its capacity as a person liable for VAT when carrying out the activities, cf. section 3, subsection of the VAT Act. 2, no. 3, and the VAT system directive, article 13, subsection 1. It was therefore right that the Tax Agency, when calculating the reimbursement of electricity tax for the properties in question, had calculated the deduction percentage according to section 38, subsection of the VAT Act. 2. The National Tax Court then accepted the Tax Agency’s estimate of the municipality’s deduction percentage. The municipality therefore did not act in its capacity as a person liable for VAT when carrying out the activities, cf. section 3, subsection of the VAT Act. 2, no. 3, and the VAT system directive, article 13, subsection 1. It was therefore right that the Tax Agency, when calculating the reimbursement of electricity tax for the properties in question, had calculated the deduction percentage according to section 38, subsection of the VAT Act. 2. The National Tax Court then accepted the Tax Agency’s estimate of the municipality’s deduction percentage. The municipality therefore did not act in its capacity as a person liable for VAT when carrying out the activities, cf. section 3, subsection of the VAT Act. 2, no. 3, and the VAT system directive, article 13, subsection 1. It was therefore right that the Tax Agency, when calculating the reimbursement of electricity tax for the properties in question, had calculated the deduction percentage according to section 38, subsection of the VAT Act. 2. The National Tax Court then accepted the Tax Agency’s estimate of the municipality’s deduction percentage.
RSource: skat.dk
