Purchase of electronic services for business purposes are exempt from VAT
When a Danish company orders electronic services via the Internet from a company within the EU, for example, the purchase of software from either Microsoft, Apple or Adobe or advertising on LinkedIn or Facebook, it is important to state the company’s Danish CVR no. The invoice then becomes exempt from VAT. In case the purchasing company does not state its VAT number, the service will be billed as a private purchase and 25% Danish VAT will be added which, according to the Danish tax office, is not deductible in Denmark.
News regarding, VAT registration in the Czech Republic
By 1 September 2016 Czech rules have been changed, and now a foreign company no longer has to be registered for VAT in the Czech Republic when making domestic deliveries to companies with a Czech VAT number. Foreign companies with this type of activity can cancel their registration for VAT in the Czech Republic. Henceforth, deliveries of this type will be billed without a charge for VAT and it is, the recipient of the goods, who settles the VAT (reverse charge).
Distance selling to private individuals in other EU countries
If your company is selling products over the Internet to consumers in other EU countries, there is a limit to how much you can sell to retail customers before you have to register for VAT in the country. Click here to learn more about individual thresholds for EU countries, and please contact us for further information and assistance with VAT registration in that country.
Brexit – what are the possible consequences for your company?
As you may know, British voted no to continued membership of the European Union. When, at some point, they finalize the exit of the EU, you might have to treat trade with British customers the same as trade with customers in third countries. Sales and purchases of goods might be considered as export and import, so export declaration papers would have to be filed as well as having to adjust the specification of the Danish VAT return. Sales of goods to private consumers could be achieved without a VAT charge. Buying and selling services might largely be conducted as before, but there could be a number of services that, in the future, could be imposed Danish VAT, for example, consultancy services used in Denmark. Great Britain’s withdrawal will, possibly, remove the binds to the EU’s VAT Directive, which might cause the UK to introduce a local VAT regime. This might influence foreign companies’ ability to recover local British VAT. We will keep you updated on the situation.