Denmark Tax Agency Clarifies VAT Treatment of Compensation Payment for Allowing Competitor to Lease Property

The Danish Customs and Tax Administration April 29 posted online Tax Council Binding Answer No. SKM2024.247.SR, clarifying the VAT treatment of a compensation payment for allowing a competitor to lease property space in a building. The taxpayer, a retail chain, allowed a competitor to lease a space in the same building as one of the taxpayer’s businesses in exchange for compensation. The Tax Agency decided that the compensation payment to the taxpayer from the competitor was subject to VAT because it constituted a consideration for a VAT-taxable supply of services. The Tax Council upheld the Tax Agency’s decision that the ...