Deduction of VAT in Denmark

Deduction of VAT in Denmark

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The general rule is that it is possible to deduct VAT on expenses related to the company's VAT-able activities in full.¹ However, on certain expenses VAT is only partly deductible or not deductible at all. This scheme illustrates the right to deduction of VAT for expenses that companies normally have. Moreover, generally it is only possible to deduct VAT on expenses where VAT has been correctly levied.

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Expenses in relation to accommodation and meals etc. 
Accommodation         X
Meals in connection with
accommodation, e.g. breakfast, separate invoiced
  X      
Meals in connection with
meetings, courses and similar held in the company's premises
        X
Food for the company's
owners and employees
X        
Free coffee and tea etc.
for employees
X        
Restaurant for business
purposes (both food and drinks)*
  X      
Cars and bridge tolls 
Toll, Øresund bridge         X
Toll, Great Belt bridge (Storebælt), passenger cars X        
Toll, Great Belt bridge (Storebælt), vans/trucks (vehicles with yellow license plates)**         X
Passenger cars, purchase
and operation expenses
X        
Passenger cars, leasing fee
(for leasing more than 6 months and 10 % for commercial purposes)
Deductible in accordancewith the specific VAT amount stated by the leasing company on the invoice
Parking fee, passenger cars
(leased or owned by the company)
X        
Vans ≤ 3 tons, purchase, no private usage          X
Vans ≤ 3 tons, purchase, also used for private purposes X        
Vans ≤ 3 tons, operation expenses         X
Vans ≤ 3 tons, leasing, also used for private purposes     X    
Trucks > 3 tons, no private usage (purchase, operating expenses and leasing)         X
Trucks > 3 tons, also used for private purposes (purchase, operating expensesand leasing)
Determined by an estimatebetween business purposes and private purposes
Telephone and internet (purchase and usage)
Mobile phones only used for
business purposes
        X
Mobile phones also used for
private purposes
Determined by an estimate
between business purposes and private purposes
Landline only used for business purposes         X
Landline installed at the premises of the employee, also used for private purposes , invoiced to the company       X  
Internet broadband Determined by an estimate
between business purposes and private purposes
 
Ipad only used for business purposes         X
Ipad also used for private purposes Determined by an estimate
between business purposes and private purposes
 Representation / promotion
Advertising expenses          X
Football tickets or similar entertainment, for selected customers X        
Flowers for decoration         X
Gifts, wine, flowers etc.
to business relations
X        
Promotional items with the
logo/company name(<100 DKK)
        X
Promotional items
with/without logo/company name(>100 DKK)
X        
Sample/demo of products regardless of value         X
Sponsorship expenses,
billboards and other advertising
        X
Meals   X      
In house meals in connection with meetings         X

© 2016 KPMG Acor Tax, a Danish limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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