Denmark Tax Agency Clarifies Deductions for Input VAT, Operating Expenses Regarding Alleged Subcontractor Services

The Danish Customs and Tax Administration Oct. 22 posted City Court Decision No. SKM2025.585.BR, clarifying deductions for input VAT and operating expenses regarding alleged subcontractor expenses. The taxpayer, a business owner, sought deductions for input VAT and operating expenses with respect to services allegedly provided by subcontractors. The Tax Agency denied the deductions and increased the taxpayer’s VAT liability and taxable income. Upon review, the City Court found that: 1) the tax authorities correctly denied the taxpayer a VAT deduction for the purchase of subcontracted services and that the taxpayer was therefore also not entitled to a tax deduction for ...