Companies with both VAT and VAT-exempt activities
5. For companies that have both VAT-liable activities and VAT-free sales of financial services, a concrete assessment must be made as to whether the company is to be considered a financial company in relation to the law.
When assessing whether the sale of financial services is of such a nature and scope that the company must be considered a financial company, decisive emphasis must be placed on whether the financial activity can be considered the company’s main activity or secondary activity.
6. The size of the company’s right to deduct input VAT on joint costs is included in the considerations. Companies that, in addition to VAT-free sales, have activities subject to VAT, will have a partial right of deduction for input VAT on joint costs. The partial right of deduction is calculated on the basis of the sales share of the company’s total turnover subject to VAT.
In addition, it can be included in the assessment of whether the company appears to the public as a financial company.
If the company’s sales subject to VAT constitute less than half of the total turnover, and the right to deduct as a result of the company’s VAT-free financial activities is therefore less than 50 per cent, the company will generally be covered by section 5, subsection of the act. 2, no. 1, as a financial company.
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Source skat.dk
