Denmark Tax Agency Clarifies VAT, Payroll Tax Exemptions for International Ship Voyages

The Danish Customs and Tax Administration Dec. 13 posted online Tax Council Binding Answer No. SKM2024.635.SR, clarifying VAT and payroll tax exemptions for international ship voyages. The taxpayer was engaged in commercial sailing with a Danish ship. Most of the taxpayer’s voyages were to transport paying anglers to a destination outside 12 nautical miles. The taxpayer sought clarification of its qualification for VAT-free fuel, and of its payroll tax obligations. Upon review, the Tax Council agreed with the Tax Agency’s recommendation, finding that: 1) sailing to the destination outside the Danish VAT area, constituted sailing in foreign traffic, because the ...