Denmark Tax Agency Clarifies VAT Treatment of Car Purchases by Sole Proprietorship

The Danish Customs and Tax Administration April 2 posted online City Court Decision No. SKM2025.180.BR, clarifying the VAT treatment of car purchases by a sole proprietorship. The taxpayer, a VAT-registered sole proprietorship providing private security services, purchased several cars and deducted input VAT on the purchases. Upon inspection, the Tax Agency and the Ministry of Taxation denied the taxpayer’s input VAT deduction and imposed acquisition VAT for the car purchases. On review, the City Court upheld the Ministry of Taxation’s decision, holding that: 1) the taxpayer didn’t demonstrate that the cars were purchased for use in the company’s supplies subject ...