Updated legislation: Pro rata calculation

The Danish Ministry of Taxation has issued an amendment to the VAT regulation (no. 2246 of November 20, 2021) that outlines changes to the calculation of VAT for businesses. The amendment specifies that a preliminary calculation of the amount of tax on a company’s purchases that can be included in the deductible VAT should be made based on the distribution of turnover in the previous accounting year. A preliminary deduction percentage should then be used for the entire accounting year. If the final deduction percentage for the previous accounting year is not available when the company files its first tax return for the current year, the company should use the deduction percentage from the year before. The final deduction percentage for the previous accounting year must be calculated and reported in the tax return for the period that includes the 6th month after the end of the accounting year. The adjustment to the VAT as a result of the final deduction percentage should also be made in the same tax return. The amendment takes effect on July 1, 2023.

Source: hoeringsportalen.dk

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