VAT Deduction and Refund

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Generally, if your business is registered for VAT, you are eligible for VAT deduction. VAT deduction allows for businesses to reclaim the VAT they have paid on goods and services purchased for business use. Our deduction overview outlines some of the most common expenses for VAT deduction in Denmark.

Are you struggling with VAT deductions or refunds in other EU countries? Whether you have a foreign company/subsidiary, a branch, or a shared service center – you might benefit from an overview of VAT deductions for countries other than Denmark.

Martin Henri Leth With

Partner, VAT, Customs & Excise Duties

KPMG Acor Tax in Denmark

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What we do

We provide VAT deduction overviews for Denmark, EU and other countries. Send us a request with your desired deduction overviews, and we will get back to you with an offer.

We offer detailed deduction overviews in English (in line with the overview for Denmark below) for all countries within the EU as well as a wide range of countries outside of the EU, so you can more easily get an overview of which expenses qualify for VAT deductions in the respective country. The overview can also include your VAT accounts or Tax codes so it can be linked up to your ERP system.

Send us an inquiry with your desired request – and we will get back to you with an offer.

In some cases, it can be tricky to figure out which of your expenses are eligible for VAT deduction. Our deduction overview outlines some of the most common expenses and indicates which of the respective expenses qualify for VAT deduction in Denmark. Our VAT deduction overview is designed for fully VAT-liable companies.

Note: Eligibility for VAT deduction generally requires a comprehensive invoice that meets the conditions outlined in the VAT regulations.

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Housing utilities	Free residence, initial and operational expenditure.	25%	0%
Relocation expenses	Work-related relocation costs.	25%	100%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Meals – restaurant services	Restaurant services for business purposes (both drinks and food). This also includes Christmas dinners held at a restaurant, tea-building for employees, internal and external meeting etc.	25%	25%
Meals – Free food and beverages	Free food and beverages for employees e.g., tea, coffee, fruit etc.	25%	0%
Meals – in connection to overtime work	Expenses on purchased food and beverages in connection with overtime work is only 100% deductible by if the overtime work is ordered and unannounced and takes place on the company’s own premises. Otherwise, VAT cannot be deducted.	25%	100%
Meals – Meetings etc.	Food and beverages related to meetings, courses etc.	25%	100%
Hotel accommodation	Hotel rooms for employees	25%	100%
Accommodation – Meals	Meals at hotel e.g. breakfast	25%	25%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Furniture and equipment	Office expenses used for business purposes, for instance purchase of tables, chairs, coffee machines, soda vending machines, etc.	25%	100%
Subscriptions	Subscriptions to magazines, papers etc.	0%	0%
Workwear, uniforms, and sportswear used by employees	In order to be eligible for VAT deduction, certain conditions must be met. The workwear must belong to the company, and the visible part of the clothing must be marked with the company’s logo or name. Additionally, the employee is required to return the clothing to the company when their employment ends.	25%	100%
Home office equipment	This includes furniture, IT equipment etc. VAT is only 100% recoverable when the usage is 100% business-related. Otherwise, the reclaimable percent is based on best estimate based on the business/private use.	25%	100%/Best estimate
Internet	Internet that is used both for work related purposes and privately.	25%	Best estimate
Electronic devices	Phones, Ipads, tablets, computers etc., used for business purposes solely.	25%	100%
Electronic devices	Phones, Ipads, tablets, computers etc., used both for business and personal use. The VAT deduction percentage is calculated based on the business/private use.	25%	Best estimate
Office expenses	Printer, expenses in connection to the usage of printers such as printing paper etc.	25%	100%
Decorations	Flowers, art etc.	25%	100%
Screen glasses	VAT can be deducted by 100 % if the screen glasses are used solely for business purposes. If the screen glasses are also used privately, the VAT percentage must be determined based on an estimate.	25%	100%/Best estimate

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Gifts to employees	These include gifts like wine and flowers	25%	0%
Gifts to business connections, clients etc.	These include gifts like wine and flowers	25%	0%
Advertising	Advertising expenses	25%	100%
Promotional items	Promotional items with the company’s logo and/or the company’s name are fully deductible if the costs are lower than 100 DKK.	25%	100%
Promotional items	Promotional items with the company’s logo and/or the company’s name are not deductible if the costs are higher than 100 DKK.	25%	0%
Sponsorship expenses	This includes expenses for signs, brochures, and other marketing activities	25%	100%
Sample products	Sample or demo products, regardless of their value	25%	100%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Toll-Passenger cars/Vans/Trucks – White plated cars	Bridge toll at Storebælt	25%	0%
Toll-Passenger cars/Vans/Trucks – Yellow plated cars	Bridge toll at Storebælt	25%	100%
Toll-Passenger cars/Vans/Trucks – White and yellow plated cars	Bridge toll at Øresund (White plated and yellow plated cars)	25%	100%
Fuel or gas	Fuel for employees own car but used in relation to business meetings or travels.	25%	0%
Reimbursement of transport costs		0%	0%
Trucks ≤ 3 tons	Costs related to maintenance and repair expenses.	25%	100%
Trucks ≤ 3 tons – purchased for both private and work-related use		25%	0%
Trucks ≤ 3 tons - Purchased for work-related use only.		25%	100%
Trucks ≤ 3 tons - Leasing payment for both private and work-related use.		25%	33%
Trucks > 3 tons – purchased for both private and work-related use	Costs related to maintenance, repair expenses and leasing expenses.	25%	Best estimate
Trucks > 3 tons, solely used for work.	Costs related to purchase, maintenance, and leasing expenses.	25%	100%
Parking expenses	No VAT recoverability for employees' own car. On the other hand, VAT is fully deductible if it is only used as visitors' car parking.	25%	0%/100%
Passenger transportation	Air tickets, ferry tickets, bus tickets, taxi and subway are zero-rated.	0%	0%
Passenger cars - Company vehicle (white plated cars)	Costs related to purchase and maintenance.	25%	0%
Car rental	Long term (longer than 6 months) and minimum 10% of commercial use.	25%	Special deduction
Car rental	Short term rental (less than 6 months).	25%	0%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Entertainment – clients	Concerts, theatres etc.	25%	0%
Entertainment – Staff	Concerts, theatres etc.	25%	0%
Equipment - expenses	For instance, purchase/rent of chairs, tables etc., for events.	25%	100%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Fees for courses and education and expenses in relation hereof	Course attendance fee, books expenses etc. (*Deductible if it is strictly commercial and has vocational relevance)	25%	100%

Expense type

Description

Tax Rate %

Reclaimable Percentage
(0-100%) *

Fees for courses and education and expenses in relation hereof

Course attendance fee, books expenses etc.

(*Deductible if it is strictly commercial and has vocational relevance)

25%

100%

Expense type	Description	Tax Rate %	Reclaimable Percentage (0-100%) *
Company cars (White plated)	Establishment and operation of charging stations for electric cars without settlement. There is no deduction regardless of use in the company.	25%	0%
Trucks ≤ 3 tons	Establishment and operation of charging stations for electric cars without settlement. Expenses are fully deductible regardless of the type and use of the vehicle.  (yellow plated or dual plated cars)	25%	100%
Trucks > 3 tons	Establishment and operation of charging stations for electric cars without settlement. Expenses are eligible for VAT deduction is the truck is used solely for work purposes. If the truck is also used privately, the deduction percentage is calculated based on an estimate between the private and business use.	25%	100%/Best estimate
Establishment and operation of charging stations for sale of electricity	Sale of electricity is subject to VAT, and the establishment and operation of charging stations for the sale of electricity provide full deduction rights regardless of the type and use of the vehicle.	25%	100%

If your business has incurred expenses abroad, such as for passenger transportation, hotel accommodation, restaurant visits etc., your business is often eligible for a VAT refund for such expenses. The deadline for applying for a refund is 30. September the year after the expenses have been incurred. The rules of the relevant EU country determine whether you can receive a refund.

We have broad experience assisting companies with applying for VAT refunds both in and outside of EU. Whether your company has incurred expenses that are eligible for a VAT refund or whether you are looking to understand the rules of the relevant EU country, to determine whether you can receive a refund, send us an inquiry, and we will get back you with an offer.

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