Reminder Fee as VAT-Taxable Consideration: Land Tax Court’s Partial Overturn of Tax Authority Decision

• The case involved whether a reminder fee charged by a company was subject to VAT as a payment for a service.
• The fee was not due to a breach of contract but was a result of the consumer’s choice of payment method.
• The fee was neither voluntary nor unexpected and was not difficult to value.
• The fee constituted the actual consideration for the service provided by the company.
• The fee was subject to VAT according to the VAT Act.
• The company’s business model relied heavily on income from fees, making up 74-80 percent of revenue.
• Sales VAT should be calculated as 20 percent of the fee revenue, not 25 percent as initially determined by the Tax Agency.
• The Tax Tribunal partially changed the Tax Agency’s decision.

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.