Security Deposit Requirement for VAT Compliance: Case Study on Car Resale in EU Countries

• According to section 11, paragraph 1, number 4 of the VAT Act, the Tax and Customs Administration could require a company to provide security when there was a risk of non-payment of taxes and duties related to the company’s supply of goods or services in Denmark
• The company in question resold cars purchased in other EU countries with reverse charge for VAT
• The National Tax Tribunal found that the Tax Authority’s demand for security was justified and that the condition of risk of loss was met
• The calculation of the security amount was disputed, as it was based on incomplete financial information
• The National Tax Tribunal referred the calculation of the security amount back to the Tax Authority for further review.

Source: info.skat.dk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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