Denmark Tax Agency Clarifies Deduction for Input VAT, Operating Costs in Subcontractor Arrangements

The Danish Customs and Tax Administration Oct. 20 posted Western High Court Decision No. SKM2025.581.VLR, on deducting input VAT and operating costs in subcontractor arrangements. The taxpayer, a company, claimed input VAT deductions and operating cost expenses based on invoices for supplying materials, as well as two payments without invoices. The Tax Agency denied the deductions, stating the taxpayer failed to document that the invoiced deliveries had been performed. On appeal, the Western High Court upheld the Tax Agency’s decision, finding that: 1) the burden of proof was heightened due to a shared interest between the taxpayer and the subcontractor; ...