Global VAT & Indirect Tax News

The Danish Customs and Tax Administration issued a Tax Council Binding Answer (No. SKM2026.87.SR) on Feb. 17, 2026, clarifying the VAT treatment of insurance activities and business transfers for Danish branches of nonresident insurance groups. The answer addresses joint VAT registration conditions, agency agreements between branches, and employee transfer VAT implications, providing much-needed guidance for taxpayers in Denmark’s insurance sector.

The Danish Business Authority has unveiled SAF‑T 2.0, a new standard for exchanging accounting data at the transaction level. From 1 January 2027 all registered digital accounting system providers must support SAF‑T 2.0, while companies using non‑registered systems must continue to generate SAF‑T 1.0 files and comply with the Bookkeeping Act. The update enhances data sharing with partners and authorities such as the Danish Tax Agency and supports future automation in reporting to public sector bodies.

The Danish Customs and Tax Administration issued a Tax Council Binding Answer (No. SKM2026.54.SR) on Jan. 28, 2026, clarifying VAT deduction rules for management services provided by a Danish subsidiary of an EU-established AIF manager to its group‑affiliated parent. The ruling indicates that the taxpayer cannot be confirmed to be entitled to a full VAT deduction for costs used for both taxable domestic services and financial services delivered to its nonresident parent.

Denmark’s Ministry of Finance announced a planned cut to the VAT on basic foodstuffs in 2028, with debate over whether the reduction should apply to all food or only fruit and vegetables. The proposal would require amendments to the VAT Act and could involve either a 20% reduced rate or a targeted zero‑rate for certain categories. Implementation is expected to be delayed due to technical complexity.

The Danish National Tax Court confirmed that extraordinary VAT reassessment is permissible when gross negligence is proven. In a case involving a Danish airline, the court upheld the tax authorities’ findings that the company used incorrect input VAT deduction percentages, failed mandatory year‑end adjustments, and understated its liability. The decision clarifies that repeated errors and prohibited energy‑tax deductions justify extraordinary reassessment.

Denmark has increased its Intrastat Dispatches threshold to DKK 11.8 million effective 1 January 2026, while the Arrivals threshold remains unchanged at DKK 42 million. The change requires businesses to report additional data in the electronic Intrastat form, including goods description, commodity code, delivery terms, transport mode, destination and origin countries, weight/quantity, and invoice value. Since January 2022, Intrastat also mandates the country of origin for dispatches and the VAT ID of the recipient.

Denmark’s Digital Bookkeeping Act entered its final rollout phase on 1 January 2026, extending mandatory certified digital bookkeeping to about 118,000 small and foreign entities with turnover above DKK 300,000. The country also cancelled the OIOUBL 3.0 e‑invoice format on 14 January 2026, with new specifications to be clarified on 24 February 2026.

The Danish government is debating a VAT cut on food, with Prime Minister Mette Frederiksen favoring a general reduction rather than eliminating VAT on fruit and vegetables. The Moderates propose scrapping VAT on fruit and vegetables, while the Liberals have not set a specific cut amount. The government says a full cut cannot be implemented by this year's elections due to technical reasons.