Requester 1 and Requester 2 each own a portion of an agricultural property. The requesters have owned the property since 1978, and ownership is divided 50/50. Requester 1 has provided his portion of the agricultural property free of charge to Requester 2. Requester 2 originally used the agricultural property for agricultural purposes within his own operation, but he later transferred the agricultural property to a lease arrangement. Requester 1 and 2 each intend to sell a portion of their share of the agricultural property when that portion is reclassified as urban land.The Tax Council can confirm that Requester 1 is not selling the property as a taxable person since Requester has provided the property free of charge to Requester 2.The Tax Council can also confirm that the sale of the property by Requester 2 is VAT-exempted according to section 13, paragraph 2 of the VAT Act, provided that Requester 2 has been invoiced VAT-taxable expenses during his ownership period until the transfer to the buyer, which Requester could not deduct due to the expenses being directly and immediately related to the VAT-exempted leasing.
Source: info.skat.dk
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