VAT lawyer

A VAT case often starts when the Danish Tax Agency asks a business to submit vouchers, invoices, bank statements or other documentation.

This may be because the agency considers that the business was not entitled to the input VAT deduction claimed, or because there is doubt about the VAT treatment of a particular transaction.

The consequences for the business can be significant. A denied deduction or reassessment may cover several tax periods and substantial amounts.

It is therefore important to have the case assessed carefully and at an early stage.

Many VAT cases involve questions from the Danish Tax Agency about a business's use of subcontractors.

For example, a subcontractor may not have accounted for its own VAT, may not have had registered employees or may later have encountered problems with the Danish Tax Agency.

In these cases, it is essential to distinguish the business's own circumstances from those of the supplier.

Problems or errors on the supplier's side do not in themselves automatically mean that the buyer must be denied an input VAT deduction. A specific assessment is required, including whether the service was actually supplied, whether the work was performed, whether the business paid and what the invoices, payment material and other documentation show.

It may also be relevant to consider the business's relationship with the supplier and what the business knew or should have known, where legally relevant.

Documentation is central in many VAT cases.

An invoice rarely stands alone. The Danish Tax Agency may also consider:

VAT becomes particularly complex when a business trades internationally or carries out transactions that do not follow an ordinary purchase and sale in Denmark.

This may raise questions about intra-EU trade, imports and exports, services purchased abroad, reverse charge and place of supply. There may also be questions about exempt activities, partial input VAT deductions and the purchase or sale of significant assets.

An incorrect VAT assessment can lead to a reassessment or an increase in VAT liability.

A VAT case may develop through several stages:

In some cases, a VAT audit may also lead to an assessment of possible criminal liability if the authorities believe that the conduct may have been intentional or grossly negligent.

Possible criminal liability may include a fine and, in more serious cases, imprisonment. Not every error or VAT reassessment leads to criminal liability; the question depends on a specific assessment of the facts, the individual's knowledge and the applicable standard of liability.

HAY LAW works with both VAT cases and criminal tax cases. We can therefore handle the matter as a whole if a VAT audit also develops into a possible criminal case.