A transfer agreement had been concluded between the appellant’s sole proprietorship and a company which the appellant owned and was a director of, regarding the company’s takeover of the company. The transfer agreement was canceled by the sole trader due to default with effect from 1 January 2015. The company had issued an invoice to the appellant for, among other things, hiring of staff in the period from 1 January to 30 June 2015, and the case concerned whether the company or the appellant was the correct bearer of the costs of the salary expense and thus liable to withhold A-tax and AM contribution, and whether the appellant was, in that case, responsible for payment of the missing amount. In addition, the case concerned whether the appellant had a deduction for purchase VAT from the invoice.
The High Court found it not proven that the company had paid A-tax and AM contribution for the staff, as the amounts had been deducted from the company’s tax account, and even though the invoice amount appeared in the intermediate account between the appellant and the company, the High Court accepted, for the reasons stated by the district court, that it was not documented that the invoice had been paid by the appellant. The High Court found it proven that all operations in the company, at least after 1 January 2015, took place in the appellant’s sole proprietorship, and that the appellant should therefore be considered the proper cost bearer of the salary expense and thus also liable to withhold according to section 46, subsection of the Withholding Tax Act. 1, and § 7 of the Labor Market Contribution Act. The High Court also agreed, for the reasons stated by the district court, that the appellant had not made good, that he had not been negligent in observing the provisions of the Withholding Tax Act, cf. Section 69, subsection of the Withholding Tax Act. 1. Finally, the high court agreed, for the reasons stated by the district court, that the appellant was not entitled to a deduction for the VAT from the invoice, cf. VAT Act section 37, subsection 1, cf. subsection 2, No. 1.
On that basis, the High Court upheld the judgment.
Source: skat.dk
