Danish VAT initiatives in response to COVID-19

COVID-19 has had a huge negative impact on the liquidity inflow of many enterprises with business activities in Denmark as a result of the extensive domestic ‘lock down’ at the beginning of March 2020. The lockdown, initiated by the Danish Government to reduce the risk of spreading COVID-19, forced several enterprises, stores, restaurants, and so on, to close down to limit Danish citizens’ ability to socialise in public areas and preventing them from going to work. To respond to the lack of liquidity, the Danish Parliament has, among other reimbursement initiatives, agreed on a couple of interim adjustments to the VAT legislation in Denmark.

Danish VAT returns 2020: Deadlines postponed

First, some deadlines applying to submission of VAT returns have been postponed. More specifically:

Danish VAT payments for 2019 converted into interest-free loans

Another legislative initiative currently being introduced in the Danish Parliament concerns VAT already paid in the second half of 2019. Under the relief provision, taxpayers can apply for repayment of the VAT they previously paid, with that amount being treated as an interest-free loan. Certain conditions will have to be met to qualify. If your client needs help applying for such a repayment, please feel free to contact us at BDO Denmark.

Louise Eide Hartung
ljs@bdo.dk

John Baarup Sørensen
jbs@bdo.dk